State Laws/Franchising

Comcast: Denial of Box Waiver Flawed

2/02/2007 7:04 PM Eastern

Comcast last week blasted the Federal Communications Commission’s denial of its requested waiver to the agency’s integrated set-top box ban as “fatally flawed” and asked for a full commission review to reverse the decision.

The U.S.’s biggest cable operator said it took “the highly unusual step” of appealing to the FCC’s five commissioners after the agency’s Media Bureau on Jan. 10 turned down its request to have three low-end digital boxes exempt from the ban on set-tops with integrated security features, set to take effect July 1.

“Given the importance of this issue to Comcast and its customers — and the rest of the cable industry — timely action is of the essence,” the company said in its Jan. 30 letter.

The operator said the Media Bureau ruling was based on “a distorted reading of previous guidance by the full commission, while adding some new and irrational standards for waiver … fabricated out of whole cloth.”

On April 19, 2006, Comcast requested a waiver of the integration ban as applied to Motorola’s DCT-700, Scientific Atlanta’s Explorer 940, and Pace Micro’s Chicago set-top boxes — “precisely the types of boxes for which the commission said it would consider waivers.”

Digital set-tops with separate security, in the form of CableCards, would be at least twice as expensive, according to Comcast. The Media Bureau, on Jan. 10, said the boxes in question don’t meet the definition of “low-cost, limited capability” devices because they include two-way functionality to access services like video on demand.

Comcast responded that this interpretation “misconstrues” the FCC’s 2005 integration ban order.

“In decades of experience with the commission, Comcast has never found itself placed in such a difficult position, forced to incur (and to pass along to its customers) substantial costs that are counterbalanced by no public benefit,” the company said.

Separately, last week, American Cable Association CEO Matthew Polka called the ban “a huge imposition of cost.” (See story, page 34.)

Another burr under Comcast’s saddle: The FCC’s Media Bureau issued the waiver denial 266 days after the operator filed its request. Comcast pointed out the Telecom Act of 1996 requires the FCC to act on such requests within 90 days.

At the Consumer Electronics Show in Las Vegas last month, FCC chairman Kevin Martin said it was “time for us to move forward” on the issue of separable set-top security.

“I think the [FCC] should be saying no to some of the largest carriers,” he said at the conference. “Comcast has a waiver in front of us where they are asking just for a further delay without any kind of a date certain on when they will be able to develop downloadable security. I think it’s time for us to move forward.”

—Ted Hearn contributed to this article.

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