ACE Asks FCC for a Bigger Set-Top Waiver

Adams Cable Equipment (ACE) on Friday filed a petition with the FCC that urged the agency to expand a waiver that  would clear the supplier to buy and sell up to 200,000 refurbished set-tops with integrated security.

In July, the FCC granted ACE a condition-filled waiver that allowed it to sell the 50,000 set-tops it had in inventory to MSOs and consumers, essentially giving it some relief from the FCC ban on set-tops with integrated security that took effect in July 2007. Prior to that waiver, relief had only been available to Baja Broadband, a cable operator in the Southwest, that has since been sold to TDS Telecom.

In the petition filed Friday, ACE asked the FCC to reconsider the 50,000 set-top limit, arguing that extending it by 150,000 more boxes would be in the public interest while presenting no threat to common reliance on devices that use removable CableCARD security.

“Given that the Bureau concluded that consumers would benefit from access to 50,000 low-cost set-top boxes, then it follows that consumer benefit could at least quadruple if the Bureau extends ACE’s waiver to permit it to resell an additional 150,000 refurbished set-top boxes,” ACE said. “The Bureau’s reason for capping the number of set-top boxes permissible under the waiver was to assure that its objective of assuring common reliance on CableCARDs is not undermined. But permitting the sale of 200,000 set-top boxes to cable operators under the waiver would not even put the slightest dent in common reliance.”

Earlier this month, the ten-largest incumbent cable operators reported that they had deployed 42 million MSO-supplied set-tops with CableCARDs since the ban took effect.

“Expanding the waiver to 200,000 devices would not change this calculus at all, but could greatly enhance the value of the waiver to consumers,” ACE said.

ACE estimates that expanding the cap would pave the way for lower-cost boxes, estimating that a refurbished DVR that currently retails for $299, could be cut to $199 or less, while the lowest-end set-top of the lot could sell for just $29.

"By artificially constraining the supply of retail set-top boxes, under the economics of supply and demand, the Waiver Order increases the cost of refurbished retail set-top boxes for consumers. The fact that otherwise valuable set-top boxes are being thrown away only hurts consumers, and the environment, without any countervailing benefit," ACE concluded.