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Despite reports of setbacks, Panasonic is still aiming to have its Tru2way TVs on store shelves by the holidays.

(Credit: Panasonic)

Panasonic has confirmed to CNET that it still intends to deliver Tru2way TVs to the market before the end of 2008. A company representative e-mailed us with the following statement:

Panasonic's Tru2way-enabled VIERA HDTV is in the certification process at CableLabs. Panasonic expects to deliver Tru2way-enabled VIERA HDTVs to the market in time for the holiday season.

Of course, the company's expectation does not equal a guarantee that we'll see the product on store shelves before the end of the year. But it does represent an affirmation that Panasonic is actively working to address the alleged issues that cropped up during the CableLabs certification process. That's certainly a contrast from the "no comment" we received Thursday.

Previous Tru2way coverage:
The rocky road to Tru2way
Can Tru2way succeed where CableCard failed?
Sony commits to Tru2way

(Credit: CableLabs)

Update: Subsequent to the publication of this story, Panasonic has released a more detailed statement on the status of its Tru2way TVs.

CableLabs' Tru2way got a big boost last month when Sony signed on with a pledge to design and deliver TVs that incorporate the standard, bolstering an already impressive list of backers. The Web was flooded with optimistic reports of a post-cable box Valhalla where you could simply buy a Tru2way TV, screw in your coaxial cable, and have plug-and-play access to your 1,000-channel universe. Before those miracle TVs hit the market, however, they need to be certified by CableLabs--and there are rumors that the initial trials aren't going well. According to IP Democracy, the initial certification tests for Panasonic Tru2way TVs were unsuccessful--to say the least. The post cites "folks close to Tru2way" as calling the Panasonic tests a "'disaster of spectacular proportions'" that resulted in "'dozens and dozens' of bugs."

In an attempt to verify those dire--but anonymous--quotes, we contacted Panasonic and CableLabs for their responses. ... Read More

The city of Los Angeles' lawsuit against Time Warner Cable has prompted a neighboring community to look at suing the cable provider.

Now the city of Costa Mesa, Calif., is also considering suing Time Warner, claiming that its residents have gotten poor service, too. Complaints had gotten so out of hand, that earlier this year the city council called a public hearing to question a Time Warner representative about the issue.

Even though service has improved over the past few months, the city's attorney said that residents have experienced similar issues as those outlined in the Los Angeles complaint, according to the Daily Pilot, the local newspaper's Web site.

Late last week, the city attorney for Los Angeles filed a suit against Time Warner alleging the company broke multiple laws by providing poor service to its citizens. The city is seeking to collect tens of millions of dollars in fines.

The suit is linked to problems Time Warner experienced after it took over cable systems from bankrupt cable operator Adelphia. Time Warner also picked up some systems through a swap with Comcast, its co-buyer in the Adelphia transaction.

Time Warner increased its subscribers in the Los Angeles region from 350,000 to 1.9 million literally overnight. The company was overwhelmed as it migrated e-mail accounts, resolved billing issues, and transitioned other video and broadband systems to its own systems. The result was allegedly poor service and a doubling in complaints.

Specifically, the suit alleges the company failed to live up to its part of the franchise cable agreement, which requires the company to answer subscribers' calls within 30 seconds and begin repairs of service interruptions within 24 hours of notification in 90 percent of its service calls. The suit claims that less than 60 percent of calls for service were answered on time and that broadband and TV "was so intermittent and inferior in quality that it was not much better than no service at all."

Time Warner says that it's working to improve customer service in the region, but it disagrees with the suit's allegations.

"We're proud of the service we provide to the L.A. area," a spokesman wrote in an e-mail. "We've made great strides in customer service, evidenced by the fact that call volumes are now lower than pre-acquisition levels, despite being apporximately five times larger."

Improving customer service is a big deal for cable operators, especially as they face increased competition from phone companies. Time Warner is one of many companies with several initiatives in the works to improve its service. But will it be too late? Many customers are already ditching Time Warner in the L.A. area and switching to satellite providers. AT&T also provides its U-verse TV and broadband service in parts of the area, which could give some residents another choice.

Some customers of Time Warner Cable in Beaumont, Texas, may soon end up paying more for their Internet access than other customers.

In a test of metered Internet access that's set to begin Thursday, subscribers who go over their limit for uploading and downloading material will be charged $1 per gigabyte, according to an Associated Press story, citing a Time Warner Cable executive.

The trial run for the metered Web use was expected. The company had said in January that it would test the new pricing model in Beaumont as a way to limit the use of peer-to-peer applications on its network. Cable companies and P2P services have long clashed over bandwidth demands, especially for the transfer of large video files.

The tiered pricing will work this way, for the Internet portion of subscription packages that also include phone or video use: At the low end, users will pay $29.95 per month for service at a speed of 768 kilobits per second, with a 5GB monthly cap. At the high end, users will pay $54.90 per month for service at 15 megabits per second, with a 40GB cap.

"We think it's the fairest way to finance the needed investment in the infrastructure," Kevin Leddy, Time Warner Cable's executive vice president of advanced technology, said in Monday's AP story. He said that just 5 percent of the company's subscribers take up half of the capacity on local cable lines.

Time Warner Cable has 90,000 customers in the trial area, but the test pricing structure will affect only new subscribers. The gigabyte surcharges go into effect after the first two months of service.

Reaction to the start of the test was swift--and often harsh.

"Is Time Warner Cable crazy?" writes Stacey Higginbotham at GigaOm, who says she is a customer of the company. "(H)ere's where I question Time Warner Cable's sanity: By offering tiered service at 15 Mbps it's promising me faster speeds that I will have limited opportunity to use, potentially driving me into the arms of another provider. Additionally, the cable guys are in a fight to the death with the telephone companies, who are unlikely to resort to such plans because they don't have the same limitations when delivering last-mile services."

If the industry press is to be believed, Tuesday's announcement that Sony would be producing TVs with Tru2way compatibility was a watershed event--the electronics world equivalent of the Magna Carta or the Treaty of Versailles. But let's step back a bit and examine what this really means.

Tru2way is a digital cable technology developed by CableLabs that's designed to be built directly into TVs, eliminating the need for an outboard set-top box. In theory, you'd be able to buy a Tru2way-compatible TV, bring it home, connect it to your coaxial cable, and instantly be able to receive your entire lineup of digital cable and high-def channels--including all the interactive video-on-demand and pay-per-view channels that currently require a cable box.

(Credit: CableLabs)

If this sounds familiar, it's because many of the same promises were made several years ago with a technology called CableCard. TVs that shipped with a CableCard slot were called "Digital Cable Ready" (DCR); they required a smart card, provided by your local cable operator, to receive digital and HD channels. The problem with CableCard was that it was an interim solution that satisfied nobody. Everyone--cable companies, hardware manufacturers, government regulators, and consumers--found CableCard technology lacking. Among the problems:

• CableCard was effectively a one-way technology, so it was incompatible with any interactive services, including video-on-demand and pay-per-view services that customers have grown to like, and cable companies depend on as a major revenue stream.
• CableCard was incompatible with Switched Digital Video (SDV) technology, which more cable providers are--or will soon be--utilizing to deliver more HD channels despite bandwidth limitations. As a result, CableCard devices such as the TiVo HD DVR need an outboard tuner (basically, a second cable box) to receive those channels, which often include the newest and most desirable HD stations.
• The CableCard installation and setup still required the cable companies to "roll a truck" to the customer's home--so it didn't save the company any time or money versus a cable box setup.
• Original CableCard setups were limited to just one tuner, so dual-tuner applications--such as picture in picture and the ability to record one show while watching another--were unavailable. (This issue was addressed with dual slots on the TiVo HD, as well as the multi-stream "M-card," which allowed for dual tuning--it was rarely deployed by cable operators.)
• CableCard setups are notoriously finicky, and often require one or more follow-up visits from the cable technician.
• The electronic programming guide (EPG) interface on most CableCard TVs was either bare bones or nonexistent. That was bad for users who've grown used to increasingly sophisticated EPGs (on TiVo and satellite DVRs). It also frustrated cable providers who were used to controlling that interface on their own boxes, where--for better or worse--they could add advertisements, customized graphics, and other "branding" that so excites multimillion dollar corporations.
• TVs with CableCard support often charged a slight premium over their non-CableCard counterparts--meaning that consumers were often paying more, but (as evidenced by the laundry list of issues above) getting less.

Not surprisingly, there was an immediate clamor for "CableCard 2.0" to address all of those issues. And that's effectively what Tru2way is: the next-gen CableCard, without the physical card. (You may have heard it mentioned during its years of development, when it was alternately referred to as "OpenCable" or "Open Cable Application Platform (OCAP)".) And--on paper, at least--it seems as if CableLabs and its partners finally got it right this time.

Tru2way is designed from the ground up to be interactive, customizable (for the cable provider), and plug-and-play. Switched digital video, video-on-demand, pay-per-view, HD channels, dual-tuner support--it should all work without a hitch, and deliver an identical experience on your local cable system, no matter which Tru2way TV you're buying.

There are plenty of other potential advantages. Tru2way TVs should be able to offer additional functionality, such as built-in DVRs. (A handful of CableCard DVR/TV combos were released, but they never took off, thanks largely to the problems outlined above.) And including the tuner inside the TV would offer the potential for better picture quality, since a TV signal native to the TV would no longer be reliant on the so-so video processing found on most set-top boxes.

Beyond the TV, Tru2way functionality could be built in to third-party DVRs (TiVo is already said to be working on a "Series4" DVR that utilizes the technology) and accessories. Among the other possibilities: a Tru2way Slingbox with a built-in tuner; an adapter that turns the Xbox 360 or PS3 into a cable-ready DVR; true home theater PCs; and portable TV viewers (such as the Comcast/Panasonic player shown in January).

So what's not to like? Nothing--except that none of this yet exists in the real world. Until you can actually buy one of these Tru2way products at Best Buy, Circuit City, or Amazon.com, it's all theoretical.

Sony joins Panasonic, Samsung, and RCA on the Tru2way roadmap, but whether any of these companies will actually deliver a real world Tru2way product before the end of the year remains to be seen. And even if they do, there are plenty of other questions. How much will cable companies charge you for the privilege of connecting a Tru2way product to their pipe? (Our guess: exactly the same fee they charge for renting the box you have now.)

And why will companies like TiVo bother developing Tru2way boxes if the consumer will be forced to use the drab cable company interface versus the far superior TiVo UI? Just imagine, for instance, if a future Apple TV offers Tru2way compatibility, but instead of its slick Apple home screen, you're stuck with a Comcast/Time Warner/Cox EPG the minute you toggle to live TV. For most users, that would eliminate the whole reason for upgrading in the first place.

Color us skeptical
The bottom line is this: Tru2way certainly looks to offer the potential for cable customers to return to the simple, halcyon days of "cable ready" TVs--just one wire, just one remote. But until we see the products hit stores in the real world, and see how--or if--they work as advertised on cable systems around the country, color us skeptical. In the meantime, we'll be waiting patiently in the downstairs rec room, sitting on hold with tech support, trying to get the CableCard PC up and running.

What do you think: Will Tru2way make for a better cable TV experience? Or will it be the latest consumer electronics scheme to overpromise and underdeliver?

Update (5/29/2008): Be sure to read the detailed comment below from reader MegaZone (who runs the Gizmolovers website). He offers some important corrections and expansions to my CableCard/Tru2way analysis.

Sony signed an agreement with the country's six largest cable companies Tuesday to develop a TV that will receive cable services without the need for a set-top box.

The Japanese electronics giant will make an LCD set based on the Tru2way cable platform introduced in January at CES by Comcast. Tru2way allows interactive cable services to be integrated directly into devices.

Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision, and Bright House Networks have all agreed to develop the technology behind Tru2way.

Sony's not the first consumer electronics company to announce a device based on the platform, however. At CES, Panasonic announced two high-definition televisions and a portable digital video recorder that use Tru2Way.

And last month Samsung, the world's largest producer of HDTVs, announced its own Tru2way TV and high-definition DVR.

(Credit: Verizon)

On Tuesday, the Franchise and Concession Review Committee (FCRC) of New York voted unanimously to approve Verizon's proposal to provide Fios TV service in all five boroughs. The vote moves the service closer to becoming an option for customers in New York to choose over cable or satellite TV.

"If we are successful in the last steps of the approval process, we will deliver on our promise to begin offering Fios TV in parts of each of the five boroughs later this year," Monica Azare, Verizon senior vice president for New York and Connecticut, said in a press release. ... Read More

Breaking up is hard to do. But in the case of Time Warner, it's simply the right thing to do.

News of the company splitting comes as no surprise. The cable piece of the business has been operating as a separate company for a while now. And investors have been clamoring for the company to make it official. Time Warner corporate announced plans for the split a month ago.

But now the full details of the split have been revealed. And the blogosphere is full of commentary on what a great deal it is for Time Warner corporate, namely the $9.25 billion dividend paid to its shareholders. But what about Time Warner Cable? How will the deal affect that part of the business?

In short, it might be the best thing that's ever happened to Time Warner Cable. Even though it's taking on additional debt to fund the one-time dividend payout to shareholders, which is on top of the $13.5 billion of debt it owed as of the end of the first quarter, it's still a smart move, said Sanford C. Bernstein & Co. analyst Craig Moffett.

"They are taking on the additional debt because they can," he said. "Their cash flow prospects are sufficiently strong to warrant an aggressive capital structure that was underleveraged as part of the bigger company."

As for the long term, Moffett believes being an independently run and traded public company gives it more flexibility and control. It also allows the company to ditch the weight of businesses like AOL that were an overall drag on its financials. In fact, Moffett believes Time Warner Cable has a better valuation without Time Warner Corporate than with it.

"The notion of any synergies between Time Warner corporate and Time Warner Cable were debunked a long time ago," he said. "But cable has always been the strongest part of the portfolio, and Time Warner Cable will likely benefit from the additional freedom."

Time Warner Cable is going to need that freedom to invest and maneuver through a new era in cable. The battle with the phone companies has only just begun. Cable companies, such as Time Warner, have proven they can compete in the broadband arena. They're giving the phone companies a run for their money on voice services. And now Time Warner Cable and other cable operators, such as Comcast, are gearing up to compete in the wireless market, too.

But getting into wireless won't be easy. It's going to take money. And it's going to take savvy executives who can strike meaningful and workable partnerships and execute on those plans. A major part of Time Warner's or any cable operator's success in wireless will be determined by whether these companies can figure out how to integrate services and products they already own into a wireless infrastructure.

Time Warner has already begun laying the groundwork. Most recently, it said it would invest $500 million to help Sprint Nextel and Clearwire build a nationwide 4G wireless network using WiMax. The company also owns a significant amount of wireless spectrum as part of the consortium SpectrumCo., which bid on and won licenses that blanket nearly 99 percent of the country in the 2006 Federal Communications Commission's Advanced Wireless Spectrum auction.

So far, Time Warner and the other cable operators haven't had a good track record in the execution piece. In fact, the 2005 joint venture with Sprint Nextel, called Pivot, has largely been a failure. Two and a half years after it was announced, Time Warner and Comcast have ducked out of the deal.

That said, I think cable and, in particular, Time Warner Cable have a shot at the wireless market. After all, who could have imagined 15 years ago that people would get home phone service from the same companies that also sell them MTV and HBO?

Time Warner has agreed to separate from its cable division, the company said Wednesday.

As part of the separation, Time Warner Cable has declared a one-time dividend of about $10.9 billion to stockholders, $9.25 billion of which will go to Time Warner.

"Separating the two companies...will help their management teams focus on realizing the full potential of the respective businesses and will provide investors with greater choice in how they own this portfolio of assets," Time Warner CEO Jeff Bewkes said in a release. "We're bullish on Time Warner Cable's prospects, but its strategic goals and capital needs are increasingly different from those of our other businesses."

The companies had announced plans for the split last month.