The Federal Communications Commission (FCC) has released a major new decision that will enable all cable operators to purchase and use certain one-way, limited-function integrated set-top boxes. Deployment of these new devices with integrated conditional access has been prohibited since mid-2007 by the “integration ban.”
Through June 1, 2012, operators can now place into service new Evolution Broadband DMS-10021 one-way set-top boxes, which do not support interactive program guides, video-on-demand, or pay-per-view, or include high definition (HD) or dual digital tuners or video recording functionality. The FCC also established an expedited process for other set-top manufacturers to obtain industry-wide waivers for similar devices that they certify are no more advanced than the DMS-1002. Evolution currently offers its devices for approximately $50, and they can be implemented to operate in both Motorola and Scientific Atlanta systems.
The FCC also granted a separate waiver to Cable One for a single rural system in Tennessee to use a one-way device that includes HD output, on the condition that Cable One commits to transitioning the system to all-digital within one year and completing certain customer notification and inventory requirements. Cable One also stated that it would offer the first device free and additional boxes for $1 per month for five years.
Other operators willing to transition one or more systems to digital may be able to get similar relief, and if you are interested in exploring that option we urge you to contact us as soon as possible.
In Section 629 of the Communications Act, adopted in 1996, Congress ordered the FCC to “assure” the development of a retail market for navigation devices. The goal of the law at the time was to develop a retail alternative to standard cable set-top boxes. This program eventually led to the development of the CableCARD, which can be inserted in retail devices such as HD TiVos built under a license from CableLabs to be used in digital cable systems in lieu of a set-top box.
The FCC adopted the integration ban in 1998 to force cable operators to use the same CableCARD in their own new devices as a means of ensuring that CableCARDs worked properly in their systems.
In 2005 (before the integration ban eventually became effective in 2007), the FCC under former Chairman Powell stated that it would be inclined to grant waivers to cable operators to continue to use low-cost, limited-capability integrated boxes to enable them to transition to all-digital systems. The FCC thus invited operators to seek waivers for devices that did not include HD, DVR or broadband capability. However, under Chairman Martin, the Commission denied requests for waivers for two-way devices, claiming that two-way capability was an “advanced” feature not eligible for the “limited function” waiver.
In the Evolution Order, the Commission decided that Evolution’s DMS-1002 does meet the criteria for a limited-function waiver under the 2005 Order. In the Cable One Order, the Commission went a step further and stated that HD output should no longer be considered an advanced capability.2 However, at least so far, the FCC has not extended the Cable One HD relief to all operators, but would instead limit that relief to operators that file their own waiver request.
In the Evolution Order, the FCC disagreed with the Consumer Electronics Association’s (CEA) assertion that the relief would undermine the goal of “common reliance” by cable operators on the same conditional access (CA) technology used by retail CableCARD devices, since the Evolution boxes use a CA that is not available in separable CableCARD form. The FCC held that even with the new waiver, there would be sufficient common reliance because its rules still require operators to continue to use CableCARDs in their new advanced function set-top boxes (i.e., HD/DVRs) and to make them available for retail devices.
These new orders reflect a change in the Commission’s tenor with respect to the integration ban. While it is unlikely that the ban will be completely eliminated in the near term, the Commission may be ripe for considering other requests for more limited relief, such as permission to use refurbished integrated devices.
We have assisted numerous cable operators in obtaining waivers from the integration ban and would be pleased to assist you with your consideration of these new opportunities.
1The FCC waiver refers to model numbers DMS-1002 and DMS-1002-CA. The CA refers to conditional access, and the other model was a device without conditional access that Evolution had developed for operators that did not have waivers from the integration ban and therefore could only use integrated devices without CA to broadcast in the clear. Now that the FCC has permitted all operators to use the 1002-CA, we assume that most will prefer that model to the 1002.
2The FCC also waived the requirement that these HD devices include an IEEE 1394 output.