The Federal Communications Commission proposed to fine Time Warner Cable and Cox Communications for moving some channels from their broadcast lineups to switched digital video groups — rendering that programming inaccessible to non-operator-supplied devices like TiVo recorders.
In notices issued last Wednesday, the agency's Enforcement Bureau said Time Warner Cable Oceanic's Oahu and Kauai systems and Cox's Fairfax County, Va., system last fall “apparently willfully violated” federal rules requiring providers to make all video programming available to third-party consumer electronics that use CableCards.
The bureau proposed to fine Time Warner Cable $40,000 and Cox $20,000 for the violations and to require both MSOs to issue refunds to any affected customers.
“Time Warner Cable does not agree with the [notices] and will be responding accordingly to the Enforcement Bureau,” the company said in a statement.
Cox issued its own statement, saying it “disagrees with the FCC's ruling, and will defend our use of switched-digital technology in responding to the Notice of Apparent Liability. Our deployment of switched digital to maximize the power of our broadband network has greatly benefited our Northern Virginia customers, where we've introduced more than 50 new channels — including 24 high-definition offerings — enabled by this technology.”
Switched digital video systems transmit linear TV channels from a headend only when a subscriber in a given service group requests it. That allows a cable system to deliver more programming in the same amount of bandwidth, on the assumption that only a subset of those channels will be requested at any given time.
But to request and receive those channels, a customer must have a two-way-capable device compatible with the specific switched digital video protocols used in that cable system. By introducing switched digital video, the FCC's Enforcement Bureau said, TWC and Cox “impaired the usefulness of competitive commercially available navigation devices.”
Separately, CableLabs and individual cable operators have worked with TiVo and other manufacturers to develop simple adapters that would allow unidirectional CableCard-based DVRs and TV sets to access switched digital video programming. MSOs plan to distribute these to customers with CableCards in systems with switched digital video, according to the National Cable & Telecommunications Association.
Oceanic's Oahu and Kauai systems moved 62 linear channels to switched digital video on Nov. 6, 2007. Cox in Fairfax County moved the Latino tier and 14 other linear channels from the broadcast lineup on Oct. 16, 2007.
Both Time Warner Cable and Cox said they were justified in moving certain channels from the broadcast tier to delivery via switched digital video because programming-accessibility laws cover only unidirectional services.
The FCC's Enforcement Bureau rejected those arguments.
If either Time Warner Cable or Cox “believed it had a legitimate reason to exclude two-way programming from the virtual channel table provided to customers with CableCard-equipped [devices], then the company should have sought a waiver of the relevant rules,” the bureau said in its orders.