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ACA: Consumers Need FCC Waiver For Low-Cost HD Boxes

According to published reports, the Federal Communications Commission at its April 21 public meeting will launch a rulemaking that will allow low-capacity cable systems to offer consumers low-cost, integrated HD set-top boxes in an effort to help these providers reclaim bandwidth and accelerate their roll out of faster broadband speeds and other advanced digital services.

The reports stated that the FCC's new rules would apply to cable systems with activated capacity of 552 MHz or less. For the first time, these providers could deploy HD boxes that do not rely on expensive CableCARD technology. The FCC's rulemaking is one of dozens the agency will take up during the balance of the year in connection with its National Broadband Plan.

"The FCC can jump-start the analog-to-digital transition for smaller, rural cable providers by making an HD version of these devices available for purchase and distribution by operators, laying the necessary groundwork for these operators to thereafter offer faster broadband speeds to consumers in the communities they serve," ACA President and CEO Matthew M. Polka said.

ACA has been urging the FCC to allow small cable companies to rely on low-cost, integrated HD set-top, explaining that such a step would quickly free up bandwidth that can be allocated to expand advanced service offerings to rural consumers, including more HD channels, improved broadband speeds and innovative VoIP telephony services.

On April 8, Ross J. Lieberman, ACA's Vice President of Government Affairs, and Jeremy M. Kissel, ACA's outside counsel with Cinnamon Mueller, spoke with Sherrese Smith, FCC Chairman Genachowski's Media Legal Advisor, on the need for prompt FCC action on this critical technology deployment issue for rural consumers.

Lieberman and Kissel emphasized that the availability of low-cost integrated HD set-top boxes would allow operators, as they transition their systems to all-digital, to expend valuable capital on set-top boxes that - unlike non-HD set-top boxes - will maintain their usefulness for many years to come.

In a March 31 letter to Genachowski, ACA explained that small cable providers have an urgent need to reclaim bandwidth occupied by analog channels and that the FCC can expedite the transition by allowing ACA member companies to rely on low-cost HD boxes instead of far more expensive integrated boxes equipped with CableCARD signal security technology.

About eight months ago, Evolution Broadband filed a petition for waiver of the FCC's CableCARD, separable signal security rules so it could build a low-cost, one-way, limited-functionality HD device that would be available for under $100. In the Genachowski letter , ACA asked the FCC to give the public the opportunity to comment on Evolution's request.

"The public interest benefits associated with transitioning a cable system from analog to digital are clear and compelling. A cable operator that can reclaim bandwidth by transitioning analog channels to digital can use the freed channel capacity to deploy advanced digital services, including additional HD programming, faster broadband speeds, and VoIP telephony services," Polka said.

In the Genachowski letter, ACA indicated that the current regulatory environment was failing to keep pace with marketplace realities. For example, while deployment of low-cost non-HD integrated boxes is permissible under FCC rules, ACA members are reluctant to invest in such devices because of their growing obsolescence in face of strong consumer demand for HD content; and ACA members are equally reluctant to invest in expensive CableCARD-enabled HD boxes because of obvious cost barriers.

Lastly, ACA noted that a decision to invest in expensive CableCard HD boxes would mean less capital to allocate to the DOCSIS 3.0 standard, which can reach broadband speeds approaching 100 Mbps through a technique called channel bonding.

ACA also explained that regulatory uncertainty stemming from FCC inaction on the Evolution waiver request has caused many ACA members to postpone key technology purchase decisions that would drive adoption of advanced communications services by millions of consumers in rural communities.

"The FCC's delay in publicly addressing this issue - one that has been pending at the FCC since last year - is negatively impacting the marketplace and consumers, particularly in smaller markets and rural areas served by small cable operators," Polka said.

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