Comcast Files Set-Top Suit vs. FCC

Cable Operator Challenges Federal Communications Commission’s Denial of Waiver

By John Eggerton -- Broadcasting & Cable, 11/1/2007 12:37:00 PM

Comcast filed suit against the Federal Communications Commission in federal court over its decision not to grant the cable operator a wavier of its set-top-box rule.

According to a copy of the filing, which included a request for expedited appeal, Comcast called the FCC decision "arbitrary and capricious, an abuse of agency discretion, discriminatory, contrary to law and relevant agency policies and unsupported by evidence," asking it to reverse the decision and grant the waiver.

In asking for the expedited hearing, the company pointed out that it took the FCC 503 days to rule on the waiver request rather than the 90 days the commission has in which to rule on requests for new and improved service.

Comcast added that the delay caused “irreparable harm” to the company and consumers, saying that it lost subscribers, its ability to compete has been “disadvantaged” and its ability to seek judicial action has been forestalled.

Consumers, it argued, lost access to low-cost boxes, while Comcast competitors including Verizon Communications’ FiOS TV, RCN and Qwest Communications International got waivers and can offer those low-cost set-tops.

The FCC set a July deadline for cable operators to separate the channel-surfing and channel-security functions of its digital set-tops to spur a retail market in the boxes in competition to the ones cable rents to customers. But the commission said it would also grant waivers on a case-by-case basis.

Comcast and other cable operators asked the FCC for a blanket waiver of the July 1 deadline so the industry could continue to supply several low-cost integrated boxes, as well as the ones with separate CableCARD security. The cable industry also wanted more time to develop and implement the downloadable security system that would be cheaper and easier than the current CableCARD hardware solution.

The commission did issue some waivers to other cable companies June 29, ahead of its July 1 deadline, but the agency had already delayed the deadline to give the industry time to work on the downloadable solution. FCC chairman Kevin Martin conceded that the online system was preferable but said it was time to set a hard deadline, combined with case-by-case wavier review.

Comcast labeled the FCC's set-top-waiver policy as arbitrary and capricious, pointing out that the commission provided waivers to other cable operators for low-cost integrated boxes but not Comcast. Now it is looking to prove its point in court.