FCC Asked To Reconsider Set-Top Waiver


A half-dozen public interest groups have petitioned the FCC to reconsider its decision granting a three-year waiver to Evolution of its rule requiring the separation of channel surfing and security functions in cable set-top boxes.

They argue that the waiver has opened the floodgates to similar requests, that together threaten to lock consumers into low-cost, low-function set-tops that would frustrate both consumers and the intent of Congress.

The FCC June 1 granted the waiver for the box with the stipulation that it had no bells and whistles like HD or Internet access capabilities.

Public Knowledge and others signing on to the petention pointed to the "flood" of similar waiver requests that followed as an attempt to get around the rule, which the FCC created to try and spur a market in retail boxes to compete with those supplied by cable.

The FCC also recently extended a hardship waiver of the rule by overbuilder RCN ) and extended the waiver to low-cost HD boxes for the first time

"If cable operators can offer "low cost" devices to their consumers that can handle a broad range of cable features, they can discourage the growth of non-integrated devices and other competing means of using cable service, ultimately limiting consumer choice and allowing them to raise prices and increase lock-in," said the groups in their petition. Filing the petition were Free Press, Media Access Project, New America Foundation, Open Technology Institute, Public Knowledge, and U.S. PIRG.

They argued that the ensuing waivers suggest the FCC was wrong in assuming the waiver would not undermine the rule, and that it also misapplied commission precedent by concluding that past waivers represented a standard for acceptable low-cost, limited-capability boxes, when instead the FCC had promised in its 2005 order to conduct a full inquiry on each waiver.

"As a result, the Commission limited its consideration to whether the boxes described by Evolution met the "standard" that it had not, in fact, adopted," they argued.

Separately, the Consumer Electronics Association has responded to that aforementioned "flood" of waiver requests -- from Cisco, Motorola, Pace, and Thompson -- with its own requests that the FCC not undermine the retail market the integration ban was meant to create and that it not expand the waiver policy by applying it to "increasingly feature-rich" set-tops.

CEA is a long-time supporter of the integration ban and the retail market it hoped would be goosed by the decision.

Cisco and Motorola filed their requests June 10, after Evolution Broadband got its waiver for two sub-$50 digital terminal adapters, or DTAs, that do not include the CableCards that provide the separate security function and instead integrated the security features. Pace and Thomson filed their waiver requests the following day.

Evolution Broadband, under the order approving its waiver, is allowed to provide the set-top units to any cable operator, marking the first time the FCC provided an exemption for a device rather than an operator's implementation of a device. The FCC 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.

The four vendors took that as the checkered flag and quickly followed suit.

CEA has asked the FCC not to be too liberal with those waivers, arguing that a competitive retail set-top box market does not yet exist. It also wants the FCC to initiate a rulemaking to create a downloadable conditional access (security) standard that can eventually replace the CableCard.

One of the cable industry's arguments against the integrated set-top ban in the first place was that a more elegant solution was the downloadable system they were already working on. But then FCC chairman Kevin Martin said that the cable industry needed the integrated-box rule to light a fire under that effort.

Responding to the petition, American Cable Association President Matthew Polka said the Evolution waiver should stand. He called it "pro-consumer in every respect," a phrase that should resonate with the new FCC and its avowedly pro-consumer chairman.

"Reversing it now would force consumers to use more expensive set-top boxes they don't need," said Polka in a statement, "and divert the scarce capital of small cable providers away from the Obama administration's mission of making broadband as fast and widespread as economically feasible," he said. 

--Todd Spangler contributed to this report.