FCC Delays Cable Set-Top Box

By TWICE Staff -- TWICE, 5/5/2003

WASHINGTON - The Federal Communications Commission (FCC) has pushed back to July 2006, a deadline to stop the distribution of digital cable TV receiving equipment with integrated conditional access security systems.

The deadline was originally meant to spur competition in the development of digital cable equipment that would be based on a unified standard, enabling sales of cable TV converter boxes at retail stores across the country. By separating out the conditional access security system, consumers would be able to purchase a set-top box anywhere in the country with the assurance it would operate on their cable system.

Cable operators would then distribute conditional access security cards - called point of deployment cards (PODs) - that would plug into a cable set-top box or cable-ready TV set to enable a cable operator to control access to the programming package to which a user has subscribed.

The commission decided to push back the original Jan. 1, 2005 deadline to provide the cable and consumer electronics industries adequate time to work out a bi-directional digital cable interoperability system, and to help cable operators and consumer electronics manufacturers commit to their pending business-cycle commitments.

The two parties reached an agreement on a unidirectional cable interoperability system last December, but that did not cover interactivity or some forms of pay-per-view and video-on-demand access.

In its ruling, the FCC stated: "This eighteen-month extension should provide adequate time for the parties to complete their ongoing negotiations and for the Commission to make a more knowledgeable decision as to any further changes in the compliance date."

The FCC is currently receiving public comment on "whether the 2005 date for the phase-out of integrated boxes remains appropriate, on what, if any, incentives the requirement creates for the development of a commercial retail market for navigation devices, and on the economic impacts and costs associated with the requirement."

By Jan. 1, 2005, the Commission will complete a reassessment of the state of the navigation devices market and determine whether the designated time frame remains appropriate or whether the ban on integrated devices will no longer be necessary.

Neal M. Goldberg, National Cable & Telecommunications Association general counsel, hailed the decision to defer the ban on operator-supplied integrated set-top boxes, calling it "good news for cable customers. The requirement to separate security in operator-supplied leased boxes would have imposed unnecessary costs on cable customers with no benefit to them. Since customers return leased boxes when they move, these boxes do not need to be portable, which was the primary reason for separating security from non-security functions in such devices."

Commenting on the related matter concerning the FCC's pending decision on a plug-and-play systems, the Consumer Electronics Association (CEA) and the Consumer Electronics Retailers Coalition (CERC) called for "the approval and expeditious implementation" of a plug-and-play system, "including an outright ban on the `down resolution' of HDTV content" over those systems.

"The CERC and CEA continue to urge the FCC to grant expeditious approval and implementation of the measures in this proceeding in order to serve consumers, enable competition and move the DTV and high definition television (HDTV) transitions forward," the filing states.