FCC Gets More CableCARD Exemption Requests, Even after Ban

On Tuesday, WideOpenWest updated a February 28 request. The cable operator wants a break on Scientific-Atlanta Explorer 2100, 2200, 3100 and 3200 boxes, claiming they have limited functionality, qualifying for exemptions under FCC rules. Pointing to a May exemption given to Charter for such low-end boxes, WideOpenWest said no non-CableCARD devices it wants to keep using have digital video recorders or high- definition TV output jacks or permit broadband access. FCC Chairman Kevin Martin has suggested publicly that the agency will not exempt high-end boxes. Also last week, WideOpenWest clarified financial statements filed June 24 with the FCC, citing “slight” discrepancies in free cash flow projections. “In all events, the estimated negative free cash flow over the seven-year period beginning with WOW’s 2003 fiscal year approaches” $100 million, it said. On May 4, Charter got a reprieve from CableCARD rules until July 1 due to financial hardship. WideOpenWest wants one on that basis, too.

On Monday, the FCC got a letter from Great Plains that certified the accuracy of a June 22 supplement to its request. The letter was dated June 29. Also on Monday, Pembroke Advanced Communications sought a waiver of open interface requirements until vendors of Internet Protocol TV (IPTV) gear meet national standards. Under section 76.1204(b) of the Communications Act, video providers conditional access interfaces used on devices such as set-top boxes must reflect standards in wide use. But standards are impractical because IPTV is a new technology, said Pembroke. “There are currently no new national standards for the conditional access interface, so IPTV cannot meet a national standard,” it said.

IPTV providers need no CableCARD waivers because they use downloadable conditional access not based in set-top boxes, said Pembroke. A June 29 Verizon filing said that company uses a “hybrid QAM/IP service,” allowing it a deadline delay until July 1, 2008, granted companies using such technologies. The bureau said only integrated set-tops work with the QAM/IP systems. Verizon was among more than 100 companies getting CableCARD implementation delays until Feb. 17, 2009, as long as they end analog operations before then. The Bell will go digital by that date, said an ex parte filing on a June 29 meeting between an executive and Martin’s media adviser. “By eliminating its analog simulcast, Verizon will free up bandwidth that can be used for additional digital programming, and in particular to increase Verizon’s HD offering,” it said.

Comcast cited Verizon’s last-minute filing and the agency’s handling of it in slamming the bureau for what it called an inconsistent policy in giving CableCARD exemptions. The cable operator asked why Verizon got a waiver under the all-digital rubric when the Bell had not committed to do so before June 29, when the bureau unveiled the waivers. “The treatment of the Verizon waiver request also raises serious questions about the integrity of the waiver process,” said Comcast’s Tuesday filing. “Curiously, Verizon finally made that commitment in an ex parte filed with the Commission on June 29, 2007, the very same day it received its waiver grant.” Verizon said it had been discussing its request for some time with 8th-floor officials. “The FCC’s interest in granting waivers based on commitments to going all-digital have been obvious since the first such waiver was granted on January 10, 2007,” said a Verizon spokesman. “We have had an ongoing dialog, as reflected in the record, since the May 4th granting of another waiver based on going all-digital.”

Comcast blasted the bureau for employing “inconsistent and irreconcilable rationales” in giving waivers and deadline extensions to more than 130 video providers so far. “The waiver orders issued on June 29, 2007, underscore the arbitrariness and capriciousness of the current waiver process,” said Comcast, saying each waiver order was “based on distinctions that are divergent and not credible.” The filing seems to lay out arguments Comcast could use in suing the FCC should the full commission uphold a bureau denial of Comcast’s waiver request, said Stifel Nicolaus analyst David Kaut. FCC officials said a week ago that an order circulated by Martin denying relief to Comcast was not slated for speedy action (CED June 28 p2).

Martin may have the 2 votes he need to deny Comcast’s request and perhaps more, with a final tally to occur this month, said sources. An FCC official said a vote may be taken this week. Comcast may take the FCC to court should the Commission issue a denial. “It seems like that is a pretty clear signal that Comcast plans to appeal any Commission denial,” said Kaut. “The Verizon and related orders on June 29 just add more fuel to their arguments that they are being treated unfairly and being discriminated against, with the arbitrary and capricious language being boilerplate for litigation.” - Jonathan Make