Bill Seeks To End 'Unnecessary and Costly' Set-Top Security Ban

But Proposed Bill From Reps. Robert Latta and Gene Green Would Preserve FCC’s Ability To Regulate Set-Top Boxes In The Future

Rep. Robert Latta (R-Ohio) and Rep. Gene Green (D-TX) on Thursday introduced legislation that aims to “remove the unnecessary and costly” set-top security integration ban that took effect more than six years ago, presenting an estimate that the FCC mandate has cost cable operators and consumers more than $1 billion.  

The bill aims to eliminate the ban while also maintaining the FCC’s ability to regulate set-top boxes in the future. The FCC declined to comment.

“By one estimate, the prohibition has cost cable operators and consumers more than $1 billion since it went into effect in 2007,” Latta said, in a statement. “In today’s ultra competitive video marketplace, cable operators have no incentive to make it more difficult for their customers to use their preferred devices to access their video programming services.”  

“I appreciate Rep Latta's leadership on this issue and am proud to introduce this legislation with him,” Green added. “The bill will unleash new innovative solutions by ridding the rule books of an antiquated tech mandate. At the same time, the bill is a surgical approach that preserves FCC authority in the retail set top box market.”

Designed to spur the development of a retail set-top market, the integrated set-top security ban took effect in July 2007. Most U.S. operators responded by deploying set-tops paired with removable CableCARD security modules.

While blame has been directed at both cable operators and the consumer electronics industry, the CableCARD regime has not spawned a sizable retail market for cable set-tops and cable-ready TVs that can use the security module. TiVo has long relied on the CableCARD in its DVRs, viewing it as a differentiator because it allows the company to offer a platform that supports both subscription cable TV services and over-the-top video via the same platform. Of recent note, Samsung has developed a CableCARD-based device that is nearing a retail launch.

TiVo has previously feared that the elimination of the ban would put it and its products at a significant disadvantage.

Google, Best Buy and other members of the AllVid Tech Company Alliance and the Consumer Electronics Association have urged the FCC to pursue rules that would bring about a successor to the CableCARD that would apply to all MVPDs, not just cable operators. The FCC has yet to act on a new proposed AllVid rulemaking effort.

The NCTA, which has repeatedly called on the FCC to end the set-top ban, and the American Cable Association both cheered the introduction of the bill.

“We applaud Reps. Latta and Green for introducing this important legislation,” said NCTA President & CEO Michael Powell, in a statement. “This targeted and bipartisan bill will retire an outdated FCC rule – known as the integration ban – that burdens cable consumers and operators with needless costs, wastes energy and violates principles of competitive neutrality.  This is common sense legislation that recognizes the significant harms imposed by the integration ban, which since 2007 has forced consumers with leased set top boxes to bear over $1 billion in unnecessary costs.  We look forward to working with Members of Congress on this important issue.”

“The American Cable Association strongly endorses House legislation introduced today by Rep. Bob Latta of Ohio and Rep. Gene Green of Texas, which will eliminate a regulation that has proved to be costly, burdensome and, by the FCC’s own admission, ineffective in creating a retail market for cable STBs,” said ACA president and CEO Matthew Polka, in a statement. “From ACA’s perspective, the FCC’s STB integration ban (which required the separation of channel-tuning and signal-scrambling encryption functions in STBs) was especially harmful to small cable operators, who were forced to rely on expensive CableCARD-enabled boxes that were disproportionately more costly than for larger cable operators.  Moreover, no such integration ban mandate applied to ACA Members’ direct broadcast satellite competitors.”

Although the bill aims to give MSOs clearance to deploy boxes with integrated security, “it would not eliminate the requirement that cable operators continue to provide their subscribers that use, for example, TiVo DVR devices with all necessary CableCARD technical support,” Polka added.

Matt Zinn, senior vice president and general counsel, secretary and chief privacy officer at TiVo, released a statement of disappointment that "Congress will be considering legislation that has been so grossly mischaracterized. The regulations that the Latta-Green bill would gut are neither “outdated” nor “costly.” Every day, these important rules – agreed to 15 years ago by Congress and the FCC in the Telecom Act – help consumers across the country, many in underserved areas, gain affordable access to emerging technology and products.  Common reliance and the integration ban remain critical for retail.

"The Latta-Green bill is bad for consumers," Zinn's statement continued. "Anyone who supports competition and innovation, should oppose this bill.  It represents a retreat from a long-standing, highly-successful national policy of giving consumers a retail alternative. It will eliminate competition to the industry’s own devices and force consumers to pay ever-higher rates to the cable industry to use their boxes. We’re disappointed that the cable industry has chosen this route rather than work with consumer electronics companies, such as TiVo, to forge an industry developed technology to replace CableCARD. TiVo reaffirms its commitment to work with the industry on a successor standard that provides consumers with increased choice in video devices from companies other than their cable provider."