News

NCTA To FCC: End Set-Top Integration Ban

6/15/2010 10:34 AM Eastern

The National Cable & Telecommunications Association has offered up its short-term fixes to the CableCARD regime, including the suggestion that the Federal Communications Commission stop requiring any more cards to be deployed for a system the agency wants to phase out.

In comments to the FCC in its inquiry into set-top boxes, NCTA said it was time to end the integration ban.

The FCC mandated that cable operators separate the security and channel-surfing functions in set-tops as a way to spur a retail market in the boxes. Both the commission and cable operators are in agreement that a robust market has not resulted from the ban.

NCTA said the industry has deployed about 20 million of the CableCARD devices since the FCC's July 2007 mandate, and that is enough.

"[T]the integration ban has imposed more than a billion dollars in costs on cable operators and consumers, yet there is no compelling evidence of any correlation between CableCARD use in leased devices and the adoption of retail CableCARD devices or other consumer benefits," said NCTA. "But even if there were such evidence, there is certainly no evidence that consumers would receive a commensurate incremental benefit from continued imposition of the integration ban on devices over and above the 20 million CableCARD devices cable operators have already deployed."

NCTA is not suggesting "abandoning" support for those existing 20 million boxes, but that since the FCC has never said that it was necessary for all leased devices to include the cards -- and the 10 largest operators have deployed those 20 million -- it is better to stop now "rather than unnecessarily forcing consumers to bear millions more in costs in the name of supporting a regime that in any event the Commission wants to replace."

The comments were made in light of FCC's proposal to replace the current set-top regime with a universal device capable of integrating traditional and online video, but in the meantime make tweaks to the CableCARD system to improve it.

The cable industry has long argued that the ban on integrated surfing and security forced them to deal with the old technology of CableCARD security hardware while it was in the midst of developing a downloadable security system that would be cheaper, easier, and more elegant. The result, they said, was unnecessary costs to the digital set-tops they lease to subscribers without providing any tangible benefit to consumers.

The FCC, under then-chairman Kevin Martin, concluded that while it recognized the advantages of downloadable security and encouraged it, it could not be sure the industry would deliver on the promises of that technology in a timely fashion.

September