News

It's Official: Box Ban Delayed

4/24/2003 9:25 AM Eastern

In a move cheered by cable operators, the Federal Communications Commission
Friday pushed back the January 2005 ban on deployment of new integrated set-top
boxes.

The cable industry favored complete removal of the ban. That didn't
happen.

The FCC instead extended the deadline by 18 months, or until July 2006, and
put cable on notice that it had not completely abandoned the idea of imposing a
ban at some point.

In a unanimous decision, the FCC said the extension was warranted because
private negotiations between the cable and consumer-electronics industries had
made "significant progress" on standards aimed at allowing consumers to own
their own set-tops and digital-TV sets without the need for a set-top.

Cable boxes now running in consumer homes have built-in encryption and other
functions, such as channel navigation.

But in 1998, the FCC -- eager to encourage set-top-box distribution at retail
-- ordered security and navigation functions separated, with encryption provided
by a point-of-deployment card that could be inserted into a set-top.

That way, consumers could buy standard boxes from different makers at retail
and obtain POD cards from cable operator when they signed up for service.

The FCC's new order allows operators and set-top makers to continue using
integrated digital set-tops for 18 more months before they must switch to boxes
using the POD interface.

"Today's FCC action deferring the ban on operator-supplied integrated set-top
boxes is good news for cable customers because the requirement to separate
security in operator-supplied leased boxes would have imposed unnecessary costs
on cable customers with no benefit to them," National Cable &
Telecommunications Association general counsel Neal M. Goldberg said in a
prepared statement.

"Since customers return leased boxes when they move, these boxes do not need
to be portable, which was the primary reason for separating security from
nonsecurity functions in such devices," he added.

Karen Brown contributed to this report.

September