FCC Grants Limited CableCARD Waivers to Charter, 2 Others

The Bureau said Millennium and GCI persuaded it to issue the waivers because they showed the action would make it easier for them to turn on all-digital networks. Millennium’s waiver was limited to Motorola’s DCT-700 device, after the Bureau turned down the company’s request it also apply to the DCT-3416. The Bureau said the 2nd device didn’t qualify because it “provides more sophisticated services such as DVR capabilities, an all-digital dual tuner and HD capability.” GCI got a waiver for the DCT-700 as well as the DCT-1000 and DCT-2000.

The 2 small cable operators must take a number of steps to comply with the waivers, said the Bureau. They must give customers adequate notice of their digital switchover and ensure they have enough of the low-cost boxes to meet demand. Both companies’ waiver requests were similar to one made by Bend Cable, which does business as BendBroadband that the Bureau granted Jan. 10 (CD Jan 11 p1), the same day FCC Chmn. Martin spoke at CES. The chairman is scheduled to address the NCTA show in Las Vegas late today (Mon.). “As noted in the BendBroadband order, we believe that a commitment to transition to an all-digital network prior to the end of 2008… would produce clear, non-speculative public interest benefits,” said the Millennium order. The GCI order said: “As GCI points out, the transition to an all-digital network requires every analog device in a cable subscriber’s home to have a converter box.”

The Charter order focused on the company’s financial difficulties, though the Bureau declined to give the cable operator a waiver on the basis that the some set-top boxes qualify as “limited capability” devices. “We acknowledge Charter’s commitment to upgrade its systems is costly, and that this commitment has left Charter in an extraordinary financial situation,” said the order: “Charter asserts that in rural areas the digital transition costs more per subscriber because of higher distribution costs and a greater ratio of headends per subscriber. We find that Charter adequately has demonstrated that this has left the company with very limited resources.” The company can apply to extend the waiver if it can show continued financial hardship, said the Bureau.

Martin is likely to speak about the waivers at NCTA, after he told CES earlier this year that he would be sympathetic to requests from companies moving to all-digital operations. Hours after he spoke to CES, the Bureau denied Comcast’s waiver. An NCTA spokesman said the group is “optimistic” that other waivers will be granted, adding: “If it happens to come Monday, that would be even greater news… We feel we've made a strong case that the integration ban is an unnecessary and expensive mandate for cable operators and consumers.” The timing of Fri’s waiver is “not a coincidence,” said another industry source: “It allows the chairman to point out to the cable industry that he does not, as the industry has repeatedly said, have it in for them -- but that the Bureau will grant a waiver when it’s justified by specific circumstances, as it did with Charter.” RCN also cheered the waivers, saying it’s “glad to see that the Media Bureau is finally starting to move on the long-pending waiver requests since the July 1 deadline is fast approaching” and that the company hopes to get one, too. “We certainly hope that a operator doesn’t have to show that it is in dire financial straits to warrant a waiver.”

Also released Fri. by the FCC: The text of a notice of proposed rulemaking (NPRM) asking whether cable operators should be required to carry some stations’ DTV signals in analog (CD Special Bulletin April 26 p2). The rulemaking contains a DTV must-carry proposal that appears to be worded in a less-neutral way than some commissioners had sought.

A proposal in the dual-carriage NPRM would ensure that stations opting for must-carry status would be guaranteed to reach all cable subscribers after the DTV cutoff. The Commission asked for comments on whether it should mandate a cable operator choose between carrying digital signals in analog to analog cable subscribers or have all-digital signals. Cable operators could carry only digital signals “provided that all subscribers have the necessary equipment to view the broadcast content,” said the notice. Such gear could include a set-top box. “In the absence of such a requirement, analog cable subscribers (currently about 50% of all cable subscribers, or 32 million households), would no longer be able to view the commercial must-carry stations or non-commercial stations after Feb. 17, 2009,” added the notice.

The NPRM asked whether cable operators should be required to give customers a box for each TV set connected to cable that lacks a digital tuner. The Commission previously said cable operators didn’t have to provide the devices, it said: “That decision, however, was premised on factual considerations that will not apply in a post-transition environment.” The FCC asked whether cable operators should be required to carry all of a TV station’s content information “bits,” saying: “We seek comment on whether we should require that all primary video and program-related content bits transmitted by the broadcaster be carried to avoid material degradation… How [are] cable operators to distinguish between bits with content and so-called ‘null bits,’ and [could] material degradation result from failure to carry these empty bits.” The rulemaking asked how to measure whether cable operators are carrying all required bits.