ACA Rips FCC's Set-Top Waiver Actions

Small-Cable-Operator Trade Group Unhappy with Industrywide Rejection, Verizon Approval

By Todd Spangler -- Multichannel News, 7/2/2007 3:11:00 PM

The Federal Communications Commission appears to be “out of touch” with consumers in underserved regions by denying many small cable operators waivers to the integrated set-top ban while approving one for Verizon Communications, American Cable Association CEO Matt Polka said in a prepared statement Monday.

The FCC’s Media Bureau Friday evening turned down the National Cable & Telecommunications Association’s request for an industrywide exemption from the rule as well as those from 10 individual cable operators. The ban, which went into effect Sunday, prohibits most operators from deploying set tops with integrated security features.

The agency also approved a broad waiver for multichannel-video providers that currently have all-digital networks or are promising to convert to all-digital transmission by February 2009 -- a group of more than 120 companies including Verizon and other telcos, as well as some cable operators.

“At a time when consumer prices are rising, it is inexplicable that the FCC Media Bureau would deny small cable operators’ waiver requests and force their subscribers to pay $2 to $3 or more per month for new cable boxes,” Polka said. He was referring to NCTA estimates of how much set-top lease fees for CableCARD-enabled boxes might increase compared with those with integrated security.

Polka’s statement continued, “Policymakers at the FCC appear out of touch with consumers in underserved areas whose cable companies are already trying to manage the costs of upgrading their facilities to provide advanced voice, video and data services, and to prepare for the digital transition.”

In the orders issued Friday, the FCC left only a little bit of breathing room for smaller operators, indicating that it would defer enforcement of the July 1 deadline for small cable operators that “can demonstrate that they have placed orders for set-top boxes that comply but that their orders will not be fulfilled in time for them to comply with the deadline.”

The NCTA did not have an immediate comment on the FCC decisions. Reached Monday, NCTA director of media relations Joy Sims said the association was “evaluating all of the FCC's late-Friday actions right now.”

Last month, NCTA CEO Kyle McSlarrow, speaking at the Society of Cable Telecommunications Engineers’ Cable-Tec Expo 2007, said that granting Verizon a waiver while requiring cable operators to meet the rule would be “patently unfair” at this late stage.

Polka, in his statement Monday, also decried the FCC’s approval of a waiver for Verizon, the second-largest telephone company in the United States.

“Unfortunately, under the FCC Media Bureau’s decisions, once again, big companies like Verizon are the winners, and smaller-market cable companies and their consumers are the losers,” Polka said. “ACA urges Congress to increase its oversight over the FCC for the benefit of all consumers, particularly those residing in smaller markets.”

Verizon issued a statement Friday night that said: “With today's waiver, Verizon will be able to continue its focus on deploying its competitive FiOS TV service and developing additional innovative features made possible by its unique technological approach.”