"The FCC should be applauded for recognizing that modification of current set-top box regulations is an essential step toward achieving the goal of affordable broadband access for all Americans, especially those located in the most economically challenging areas to serve. ACA strongly endorses the position that cable operators and their subscribers should be able to obtain low-cost set-top boxes that can display HD signals," American Cable Association President and CEO Matthew M. Polka said.
The FCC has tentatively concluded that all cable operators should be allowed to offer consumers integrated HD-capable set-tops in lieu of similar CableCARD boxes, which can be six to eight times as expensive to purchase at wholesale as boxes with integrated security and channel selection features. Alternatively, the FCC has indicated it might limit relief just to cable systems with 550 MHz of capacity or less.
The FCC is expected to vote on new policies later in the year. In July 2007, the agency forced cable operators to rely exclusively on CableCARD boxes, which differ from integrated boxes in that they read signal-security instructional codes from a small, insertable card issued to consumers by the operator. Since that time, the entire cable industry, both large and small operators, have deployed high-functionality CableCARD boxes to their consumers and have supported CableCARD devices purchased at retail by their subscribers.
In comments filed on June 14, ACA stressed that properly calibrated set-top policies would yield important benefits for consumers, particularly for those served by small cable operators. Reliance on HD-capable boxes costing about $50 each would be a more affordable option for cable operators and consumers. It would also allow ACA members to migrate quickly channels from analog to digital transmission and free up spectrum needed to roll out more HD channels, new VoIP communications services and faster broadband Internet access service.
ACA noted that if the FCC provided greater flexibility from existing policy of near-exclusive reliance on CableCARD boxes, it would not have an impact on the sale of set-top boxes at the consumer retail level. This is so because no retail market for low-functionality set-top boxes exists.
ACA explained that integrated HD-boxes meeting a potential FCC CableCARD waiver standard would not compete with advanced CableCARD-enabled devices sold at retail. Firms like TiVo and Moxi offer consumers high-functionality devices equipped with DVR service and access to an array of Web-based content, including movie services, photo diaries and video clips. These advanced boxes sold at retail are far more expensive and sophisticated than any of the streamlined HD-boxes contemplated for an exemption under the FCC's CableCARD rules, and thus wouldn't impact consumer interest in the high-functionality boxes available at retail outlets.
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