FCC Grants Waivers on Four Set-Top Boxes

Rules that boxes by Motorola, Cisco, Pace and Thomson do not violate set-top integration ban
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In a victory for cable operators, the FCC has granted Motorola,
Cisco, Pace and Thomson waivers on its set-top integration ban for what they
pitched as one-way, low-cost limited-capability boxes. That means there are
four more boxes that can be installed without the need to go to the FCC for an
individual waiver.

The FCC said Tuesday that it had vetted the specs for the
quartet of waiver requests and found them to be "no more advanced"
than the Evolution Broadband boxes it previously waived. It granted the waiver,
saying Public Knowledge's assertion that software upgrades could conceivably
alter those capabilities "does not have merit." But it did say that
hardware modifications could alter them, so that any box that differed from the
specs submitted would require a separate waiver.

The FCC also recently extended a hardship waiver of the rule
by overbuilder RCN and extended the waiver to low-cost HD boxes for the first
time. The FCC instituted the ban on digital set-tops that integrate security
and channel surfing functions in an effort to spur a retail market. But it said
it would entertain waivers for low-cost boxes sans bells and whistles.

The National Cable & Telecommunications Association had
backed the FCC's decision to grant a three-year
waiver of the FCC's integrated set-top ban for Evolution Broadband
, saying
the FCC had long found those waivers to be in the public interest.

Almost immediately after Evolution got its waiver--a
decision in which the FCC also created a fast-track for similar waiver
requests--the four other box manufacturers followed suit

A half-dozen public interest groups led by Public Knowledge asked
the FCC to reconsider the Evolution waiver
, and warned of opening the
floodgates to more requests. That was because it was the FCC's first grant of
such a waiver for a category of boxes, rather than a single cable operator's
request for a specific box. That means that any cable operator can employ the
Evolution box, and now the other boxes, without seeking a waiver individually.

NCTA said in a filing in support of the Evolution decision
that "the commission specifically invited the filing of such requests and
established a streamlined process," adding that the competition will keep
prices low and won't threaten a retail market that is "developing around
devices with more advanced capabilities."

In granting Evolution the waiver, the FCC did invite others
to follow suit. "We recognize the potential competitive implications of
this outcome and will attempt to ensure that other manufacturers with similar
devices can enter and compete as quickly as possible," the commission
order said. The FCC said it would put the requests out for comment for only 10
days, then act on them, suggesting it would "expeditiously grant"
those waivers for similarly situated boxes.

"The ACA is pleased that the FCC is adopting policies that will allow small, independent cable providers to deploy low-cost digital set-top boxes to their customers," said American Cable Association President Matthew Polka. "The FCC's approach lowers the cost to offer digital television service to consumers and helps ACA members transition to all-digital networks and utilize old analog bandwidth to provide more HDTV channels, faster broadband access speeds, and feature-rich digital phone service."

“We are disappointed that the Media Bureau granted the waivers for low-end set-top boxes, which lock in advantages the cable companies already have while offering consumers set-top boxes with fewer features than they might otherwise get in an open market," said Public Knowledge President Gigi Sohn. "The larger issue is whether the Commission is doing what Congress required back in 1996, when the Telecom Act promised an open, competitive market for full-featured set-top boxes. That vision would have given consumers more choices and more features. It’s that goal to which the Commission should aspire, rather than continually lowering the bar through the waiver process.”

ACA wants the FCC to give the waiver-eligible boxes more features, pushing it to expand the general wiaver on a whole class of boxes to ones that can process HD signals. The FCC has already granted one such wavier. "We encourage the agency to now turn its attention to the pending waiver request for HD-capable, low-cost and low-functionality consumer devices that would permit more consumers to receive HD content at a low cost," said Polka.

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