FCC Grants Three Set-Top Waivers

The Federal Communications Commission, on the eve of the cable industry’s biggest show, granted Charter Communications and two smaller operators temporary waivers of the ban on set-top boxes with integrated security features that takes effect July 1.

The FCC’s Media Bureau granted Charter’s waiver request for seven set-top-box models until July 1, 2008. The bureau said it “found that the severe financial difficulties that Charter faces justified waiver.” Charter has had five consecutive years of negative free cash flow, and the MSO has more than $20 billion in outstanding debt obligations, according to its waiver request.

In addition, the FCC said, Charter may file a request for an extension of the waiver in July 2008 to allow the agency to review the company’s financial status at that time “to determine whether further waiver is warranted.”

The agency also granted conditional waivers of the ban to GCI, a telecommunications and cable provider in Anchorage, Alaska; and OneSource Communications, a telephone and cable company in Keller, Texas. The FCC said those operators’ “commitments to migrate their systems to all-digital on or before Feb. 17, 2009, justified grant of the waivers.”

However, it denied OneSource’s request for a waiver with respect to Motorola’s DCT3416 (opens in new tab) model because it found the operator’s arguments that the high-end model was critical to its ability to migrate to all-digital “unconvincing.”

The FCC still has not ruled on more than one-dozen other waiver requests. Barring a reprieve in the form of one of these waivers, operators as of July 1 will be required to deploy only digital-cable boxes that have removable security. For now, that means set-top boxes with CableCARD devices.

The FCC has selectively granted waivers, using various rationales. It approved the wavier requested by Cablevision Systems, which uses a removable smart card in its set-top boxes to provide conditional-access security features. Also given a pass was BendBroadband, which, like GCI and OneSource, committed to eliminating analog-video transmission by the beginning of 2009.

In January, the Media Bureau turned down Comcast’s request for a waiver on three low-end set-top boxes. Comcast subsequently appealed to the FCC’s five commissioners to review the ruling.