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ACA Backs Cable ONE Hi-Def Box Plan

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
12/2/2008
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The American Cable Association (ACA) , a pressure group that represents more than 1,000 small and mid-sized MSOs, is throwing its political weight behind Cable ONE Inc. 's plan to pursue an all-digital migration led by simple, one-way boxes capable of outputting high-definition television (HDTV) signals.

The ACA formalized its support via a filing with the Federal Communications Commission (FCC) last Friday (Nov. 28) that urges the Commission to approve a set-top waiver request Cable ONE placed in late October for its Dyersburg, Tenn., cable system.

The spectrum freed up by those devices, the ACA claimed, will serve the public interest because it would enable Cable ONE (and potentially other, similar MSOs) to go all-digital affordably, and to use that newfound digital spectrum to broaden their HD programming lineups or offer speedier Docsis 3.0-based Internet services.

"Unfortunately, for many of ACA's members, the digital set-top boxes that are required under existing rules are just too expensive to deploy," said ACA president and CEO Matthew M. Polka, referring to an FCC set-top security mandate that went into effect last July. (See Countdown to 'Seven-Oh-Seven' and Boxing Up 'Seven-Oh-Seven' .)

"The use of HD ADDs [HD-capable all-digital devices] gives cable operators a cost-effective way to transition to an all-digital network. Cable ONE's Dyersburg system faces this challenge, and we urge the Commission to grant the waiver it needs to best serve Cable ONE's customers," he added.

As first reported by Cable Digital News, Cable ONE is seeking a waiver for a new breed of low-cost, one-way HD ADDs with embedded security for use in the operator's system in Dyersburg. If the waiver is granted, the operator has pledged to migrate the system to all-digital within one year of obtaining the waiver, and to use freed up capacity to offer a minimum of 50 HD networks to customers at no additional service charge beyond what's being paid for the service tier currently containing the analog or standard-definition version of those networks. (See Cable ONE Seeks Hi-Def DTA Waiver .)

In June, before filing its official waiver request, Cable ONE urged the FCC to consider updating its set-top waiver rules to allow operators to use simple, one-way, digital-to-analog converters capable of supporting HD services. The MSO, which serves about 700,000 basic subs, argued that such a device should be allowed under the waiver rules because HD no longer qualifies as an "advanced" service. (See CEA Attacks Cable One HD Plan and HD No Longer an 'Advanced' Service?)

Although HD ADDs are not yet generally available, Cable ONE maintains that Evolution Broadband LLC and other vendors can produce the equipment in volume for as little as $50 per unit.

If the waiver is approved, it could pave the way for Cable ONE and other MSOs to get more bang out of their limited capacity systems (i.e., those with 550 MHz of spectrum) and product hi-def lineups that can exceed, or at least rival, those offered by DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH)

The CEA's riposte
As expected, the Consumer Electronics Association (CEA) isn't letting this waiver request proceed without a fight.

In a filing of its own, the CEA argued that the "mere 'increased availability' of an existing service, high-definition programming, does not necessitate a waiver." The Association added that the FCC has a sound basis for excluding HD devices from "limited-functionality" waivers because previously granted waivers are "transitional expedients granted in the context of the digital transition." (See Son of 'Waiver Central' .)

Furthermore, the CEA said Cable ONE "appears to be requesting a permanent waiver," which is not permitted under the original FCC order.

The CEA also contends that Cable ONE's waiver request "undermines" the FCC's attempt at building a retail market for two-way devices that separate out the security function via the CableCARD.

"For cable operators like Cable ONE now to deploy new set-top boxes with proprietary integrated security would be a great leap backwards for the Commission and for the goal of competitive availability," the CEA said.

Cable ONE addressed that issue in its waiver request, noting that the MSO would continue to support removable CableCARDs and all compatible electronic devices (digital set-tops and TVs) purchased by consumers at retail outlets and on all "high-functionality" (i.e., two-way) devices offered for lease by Cable ONE.

— Jeff Baumgartner, Site Editor, Cable Digital News

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