Advisability of Seeking a Waiver from an FCC Rule Requiring Unbundling of Decoder/Converter Box Security Components
Some cable operators and other multichannel video programming distributors (“MVPDs”) may wish to act now to petition the Federal Communications Commission for a waiver from a new rule that governs their provisioning of digital navigation devices that descramble scrambled analog signals (i.e., hybrid digital-analog decoder/converter boxes). The new rule, 47 C.F.R. § 76.1204, takes effect July 1, 2000 and requires MVPDs to make hybrid navigation device security components available to consumers separately from other hybrid navigation device components. The rule is causing hardship to many MVPDs deploying hybrid navigation devices because it requires MVPDs to provide separate analog security components for navigation devices, despite the lack of a commercially practicable standard for such components.
Many operators deploying hybrid navigation devices plan to effectively comply with the rule by double-running their scrambled analog signals in the digital tier. However, in markets where there is insufficient bandwidth, operators may find that strategy to be commercially impracticable. Two of the largest cable operators have filed for waivers from the rule for some of their systems until they complete system rebuilds that will generate sufficient bandwidth for double-running of the scrambled analog tier, and other cable operators are expected to follow suit. The National Cable Television Association has also advised its members adversely affected by the rule to petition the FCC for a waiver.
Cable operators should assess their own situations to determine if requesting a waiver of the rule is prudent. While there is no deadline to petition the FCC for a waiver, the benefits of filing a petition will be greatest prior to the effective date of the new rule. Potential penalties for violation of the navigation devices rule include FCC forfeiture penalties of up to $27,500 per day if a violation is determined to be willful. In addition, local franchising authorities could seek to capitalize on the appearance of operator noncompliance with an FCC rule.
We have prepared navigation devices rule waiver petitions and can assist operators in deciding whether filing such a petition is prudent and, if so, in preparing it.