News Articles

FCC Should Let Bygones Be Bygones

1/26/2007 07:00:00 PM Eastern

Author Information
May is president of the Maryland-based Free State Foundation.

At the Consumer Electronics Show in January, FCC Chairman Kevin Martin
took a hard line on waiver petitions filed by cable operators seeking a delay
of the July 2007 date by which they must stop providing set-top equipment that
integrates both security and navigation functions.

In Washington, the FCC's Media Bureau denied Comcast's waiver request.
The National Cable & Telecommunications Association has also petitioned the
FCC to waive the integration ban for all cable operators until the deployment
of downloadable security, or December 2009 (whichever comes first).

The Communications Act says the FCC "shall waive" the ban upon "an
appropriate showing." More than an appropriate showing exists to grant relief
from a rule developed during a bygone monopolistic era.

In 1996, Congress authorized the FCC to adopt rules enabling
consumer-electronics manufacturers to make "plug-and-play" equipment that would
work with any content provider's service. In 1998, the agency required cable
operators to develop a physical device—now called a CableCARD—containing
the security functions that could be inserted in independent manufacturers'
equipment. Cable operators now support more than 500 models of digital
cable-ready devices.

Unfortunately, the FCC went further, prohibiting cable companies from
integrating both security and non-security functions in one device, even while
acknowledging that the changing market made it "a particularly perilous time
for the adoption of regulations." Since 1998, things have moved even quicker.
Now it's clear the costs of implementing the ban exceed any consumer benefits.

Cable operators—and Verizon, an important new entrant in the
marketplace, which has its own waiver petition pending—estimate compliance
will add $2-$3 monthly to the set-top–box rental fee. Downloadable security
enabling content providers and consumer electronics manufacturers to rely on an
identical security function is on the horizon. Why implement a costly edict
likely to slow it down?

With the broadband marketplace's competitiveness, the FCC need not fear
that service providers will alienate consumers by foisting set-top boxes on
them they don't want. This is not the analog world of the telephone monopoly of
the '70s, when the FCC required the Bell System to separate customer premises
equipment from transmission services. Then, the Bell System had the ability to
discriminate, and one ubiquitous network made it far easier and cheaper to
devise a standard equipment interface.

The integration ban is regulatory overkill. The commission should
postpone a rule that might have meant something in 1998 but is
counterproductive in 2007.

Author Information
May is president of the Maryland-based Free State Foundation.