More MSOs Ask FCC For Set-Top Waivers

7/02/2000 8:00 PM Eastern

Washington-On the eve of new federal rules taking effect, two more cable operators sought relief from Federal Communications Commission policies designed to create a retail market for set-top boxes.

The latest waiver pleas-from Cox Communications Inc. and MediaOne Group Inc. (which is now owned by AT & T Corp.)-join previously filed requests at the FCC by AT & T Broadband, Charter Communications Inc. and Insight Communications Co. Inc.

In all, the MSOs are seeking waivers covering about 2.3 million basic subscribers and some 200,000 digital subscribers, ranging in duration from a few months to three years. All of them pledged to comply with FCC rules once upgrades have been finished.

Deborah Lathen, chief of the FCC's Cable Service Bureau, said last week that she had concerns that cable operators were not able to fully comply with the rules.

"I am very concerned because we made a commitment. Our commitment is to help move along the transition to the digital age, and we take very seriously the requirement, the dates we have set," Lathen told reporters.

Cox said its June 16 waiver request would cover about 187,000 basic subscribers and around 20,000 digital subscribers in six systems. MediaOne's June 13 request was for one system in Westchester, Calif., covering 21,000 basic subscribers and 5,000 digital subscribers.

Generally, the operators said, waivers were necessary because analog point-of-deployment modules that descramble programming are not being made, and their systems do not have sufficient bandwidth to duplicate analog programming in digital for descrambling by digital PODs.

Starting July 1, the FCC is requiring cable operators to provide requesting subscribers with PODs for use in set-tops purchased from retail outlets.

The mandate covers hybrid analog-digital boxes, but not analog converters. In 2005, cable operators are barred from leasing boxes that house both signal-security and channel-surfing functions.

Lathen said the agency had not decided whether to grant waivers or to take some kind of enforcement action against the MSOs.

"We are considering what actions we are going to take with respect to whether or not we're going to grant waivers and with respect to whether or not, if we didn't grant waivers, there would be any enforcement action," she added.

Lathen said the vast majority of cable operators would meet the July 1 deadline.

"In most instances, 99 percent of the systems are in compliance in a lot of the companies," she added. "It varies from company to company, but there is substantial compliance in a lot of the companies that have filed, and these are some of their older systems or systems that were acquisitions that needed to be upgraded."

The FCC requirements, adopted at the direction of Congress, were designed to open up the retail market for set-tops and to loosen cable's grip on subscriber gear.

In 1998, the agency determined that the best way to do so was by requiring the separation of signal-security functions by use of a POD from channel-selection functions that remain within the box.

Complaining that the cable industry had withheld key specifications for boxes that will interface with digital PODs, Circuit City Stores Inc. said two weeks ago that it will not have set-tops in its 600 stores anytime soon.

The cable industry disputed Circuit City, saying that the specifications can be downloaded from Cable Television Laboratories Inc.'s Web site.

Lathen said she held a meeting June 26 with the MSOs seeking waivers, the Consumer Electronics Association and Circuit City. She added that she asked the MSOs to furnish additional information about their waiver requests.

If granted, waivers would impact digital subscribers that also subscribe to scrambled analog services. Subscribers who purchased set-tops would not be able to use digital PODs to unscramble analog services. That can only happen until operators duplicate their analog fare in digital.

Thousands of basic subscribers are not affected because analog set-tops are not covered by FCC rules. But those basic subscribers would be affected to the extent that they upgraded to digital and also purchased scrambled analog programming.

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