FCC OKs 'Hardship' Waivers

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The action on CableCard boxes isn't over. The Federal Communications Commission's Media Bureau last week granted one-year waivers on its mandate banning installation of set-top boxes with built-in security to four cable operators: RCN, WideOpenWest, James Cable and Great Plains Cable Television.

The FCC granted exemptions for certain models of set-top boxes, citing the financial difficulties of each company.

“In light of petitioners' demonstrated financial hardships … we conclude that a limited, one-year grant of their waiver requests is justified” under FCC rules, the Media Bureau said.

The decision mirrored the FCC's rationale for granting an exemption to Charter Communications until July 1, 2008, for seven models of low-cost set-tops.

This was part of the FCC's second wave of rulings on the integrated set-top ban, which went into effect July 1.

The integrated set-top ban, which had been deferred twice, is intended to make a wide range of consumer-electronics devices — such as TiVo's digital video recorders — work better in cable networks by forcing operators to use the same CableCard standard for handling security functions in their own set-tops.

In a prepared statement, RCN said, “The commission recognizes that RCN's capital structure and resources are vastly different from the incumbent cable and telephone companies with whom we compete, and that without this waiver, the increased cost of basic set-top boxes to a company of RCN's size and limited capital resources would have crippled our ability to continue this important effort.” For the first quarter of 2007, RCN reported $153 million in revenue and a $22 million net loss from continuing operations. The cable overbuilder had $202 million in long-term debt as of March 31.

Also last week, the FCC granted waiver requests to seven phone companies because they already operate all-digital systems or have promised to do so by Feb. 17, 2009, when TV broadcasters are required to stop transmitting analog signals.

The Media Bureau also turned down requests by Innovative Cable TV, a cable operator in the U.S. Virgin Islands, and ComSouth, a small Hawkinsville, Ga.-based phone and cable company.

Finally, the FCC deferred enforcement of the ban until Sept. 1, 2007, for JetBroadband and requested additional information about the operator's proposal to use the downloadable-security system developed by Beyond Broadband Technology.

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