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FCC Just Says Sort of on CableCARDs

The FCC is finally kind of putting its foot down on the long-delayed implementation of CableCARDs. The commission's Media Bureau on Jan. 10 told Comcast to quit stalling, while Cablevision and a little telco/cabler in Bend, Ore. got another pass.

Comcast had requested a permanent waiver on CableCARD deployment; the FCC said "no dice." Cablevision's request for a limited waiver was granted, and one by BendBroadband was conditionally granted.

CableCARDs are the product of an order issued by the FCC eight years ago that ordered cable companies to separate the scrambling function from their set-top box, thereby allowing retailers to peddle cable boxes. The cards are SD-like devices that contain the scrambling technology. The order is known as the "integration ban." The current deadline is July 1, 2007.

Cablevision got a partial pass because it started taking scrambling out of the box five years ago. However, it's doing so with it's own proprietary "SmartCard," which doesn't meet FCC requirements. Cablevision has until July 1, 2009 to replace SmartCards.

BendBroadband in Oregon convinced the commission that it was going all digital by 2008 and therefore shouldn't be compelled to cycle through two types of set-tops in two years.

The cable industry has managed to delay the implementation of CableCARDs for 10 years, contending that the scheme will cost them a bundle; which of course must be passed on to customers. The cable lobby and its supporters said the integration ban is tantamount to a set-top tax.

"The denial of cable's waiver requests would mean that, starting in July, consumers would be paying a new $600 million tax, costing cable customers another $2 to $3 per month," said Brian Dietz, vice president of communications for the National Cable and Telecommunications Association.

Neil Ritchie, executive director of the League of Rural Voters and Lillian Rodríguez-López, president of Hispanic Federation weighed in on the side of the cable lobby. Rodríguez-López is also co-chair of Broadband Everywhere, an information campaign group funded primarily by the cable lobby.

The purpose of the integration ban was to create a competitive market for cable set-top boxes, which are currently proprietary to each cable operator. Following the ruling on the waivers, FCC Chairman Kevin Martin said that Congress ordered the ban in 1996 so people could buy their own set-tops instead of having to rent them from a cable company. More than a decade and two failed court challenges later, he said, the industry was still dragging it's heels.

"Faced with a deadline of July 1, 2007, many cable operators have requested a third extension," he said. "This inaction has served to hinder innovation, deter competition and harm consumers."

Martin likened the situation to the days when people had to rent black rotary phones from the phone company.

"As we all know," he said, "a competitive market for phones resulted in significant innovation, lower prices, and extensive consumer choice. The market for televisions and set-top boxes holds the same potential."

In recent years, the cable industry's waiver requests increasingly focused on scrambling functions that could be downloaded through the cable system. However, that check's been in the mail for quite a while; and it would still require the deployment of new cable boxes. The Media Bureau, in addition to the waiver rulings, said the cable operators who wanted to implement downloadable scrambling by the deadline were welcome to do so.

Martin said he would have liked to "establish a timeframe for cable operators to develop and deploy downloadable security with adequate assurance that this timeframe would actually be met."