FCC Bans Proprietary Set-Top Boxes

Comcast and other cable companies must provide, by July 1, set-top boxes based on the CableCARD smartcard rather than proprietary set-top boxes that consumers now use to receive cable signals.

That’s the word from the FCC as the media bureau on Wednesday denied Comcast’s request for a waiver on a ban not to offer integrated set-top boxes, which the FCC has contended stifle competition and consumer choice. Cable operators must deploy CableCARD-enabled devices, something that makes them unhappy because they stand to lose millions of dollars in revenue from renting proprietary set-top boxes to subscribers.

The FCC did grant Cablevision’s request for a two-year wavier and conditionally granted the waiver request of Bend Cable, a small operator in Bend, Ore.

The FCC has moved its deadlines for CableCARD integration twice times over the past few years, in hopes that cable companies would develop downloadable security alternatives to the smartcard, but those hopes never came to fruition.

On Wednesday, the FCC paved the way for consumers to eventually purchase, one time only, devices that will work with any cable operator’s signals. Cable companies have protested this move, as they make several dollars on every set-top device in someone’s home. Consumers with three of four of these boxes pay up to $20 more for cable service every month. That adds up to millions of extra dollars annually for operators.

Comcast said it would appeal the decision.

“We are very disappointed in this regrettable FCC Media Bureau decision,” said David Cohen, executive vice president for Comcast, in a prepared statement. “This amounts to an FCC tax of hundreds of millions of dollars on consumers with no countervailing benefits. We will seek full commission review immediately.”

The National Cable & Telecommunications Association said it was “incomprehensible” that the FCC would deny the waiver requests as government officials make the transition from analog to digital signals a priority.

Consumer and technology groups have blasted the original versions of the CableCARD, which have only enabled one-way, rather than two-way, communications. Newer versions seemed to have addressed that problem.

The decision further affects manufacturers such as Motorola Inc., Cisco Systems Inc., and Scientific-Atlanta, many of whom had supported Comcast’s request for a waiver on set-top box requirements.

Cisco Systems Inc. www.cisco.com  

Comcast www.comcast.com  

FCC www.fcc.gov  

Motorola Inc. www.motorola.com

Scientific-Atlanta www.sciatl.com

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