DTAs Get FCC's Blessing

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The Federal Communications Commission last week granted a three-year waiver to Evolution Broadband for two low-cost set-top boxes that do not include CableCards — a blanket exemption to the agency's so-called “integration ban” that could pave the way for cable operators to deploy much less expensive set-tops.

The devices from Evolution Broadband covered under the waiver cost between $45 and $55, according to the company's waiver petition, and are one-way “limited-capability devices” that provide integrated security, referred to in the industry as digital terminal adapters (DTAs). The boxes convert digital signals to analog format and don't provide advanced functions like digital video recording.

Under the waiver, Evolution Broadband is allowed to provide the set-top units to any cable operator. The FCC reached the decision May 28 and issued the order June 2.

“It's pretty clear — it's an unlimited waiver,” John Egan Sr., chairman of Evolution Broadband, said in an interview. “It's something the industry should have done years ago.”

The FCC, in its order, noted the waiver was the first granted for a low-cost device rather than for a specific cable operator's deployment of such a device. The agency said it “will attempt to ensure that other manufacturers with similar devices can enter and compete as quickly as possible” by acting expeditiously on waiver requests for similar low-cost DTAs.

American Cable Association president and CEO Matt Polka applauded the agency's order.

“The FCC's action will allow small cable operators to take their systems all-digital at a much faster pace because now they can deploy set-top boxes that will cost about $50 instead of several hundred dollars each,” Polka said in a statement.

The decision comes after the FCC's May 28 ruling that Cable One, in a single market in Tennessee, would be allowed to deploy a low-cost set-top box capable of displaying HD signals. Cable One said that without a waiver, it would need to rely on a CableCard-based HD box with a wholesale price of $400 to $500.

The FCC's policy of forcing MSOs to use CableCards in their own set-tops, known as “common reliance,” is supposed to ensure that the removable cards work in any retail products that conform to the CableLabs-developed standard.

Egan said that given Evolution Broadband's waiver and the Cable One decision, it seems clear that an HD-capable box should not be considered an “advanced service” under the CableCard rules — meaning HD-based DTAs could be exempt from the integration ban as well.

The company has developed a sub-$100 device that provides MPEG-2 or MPEG-4 HD support, for which it plans to file for a waiver, Egan added. “It's a game changer,” he said.

Evolution Broadband, based in Centennial, Colo., filed for the waiver request in May 2008. The vendor was represented in the matter by Chicago-based law firm Cinnamon Mueller.

Meanwhile, Comcast has been deploying low-function DTAs from vendors including Motorola and Pace without any security features enabled, thereby sidestepping the FCC's separable-security rule. The MSO is eliminating 40 to 50 analog channels, freeing up to 300 Megahertz of spectrum, by giving basic cable subs who won't upgrade to a digital tier free DTAs.