2:00 PM -- The Federal Communications Commission (FCC) has granted an interim waiver that will let cable operators, for the first time, lease out HD set-top boxes without the Institute of Electrical and Electronics Engineers Inc. (IEEE) 1394 "Firewire" interface for digital video.

The waiver, which is good until the Commission completes its review of the current set-top box interface rule, essentially gives MSOs a choice when it comes to the interface for leased HD boxes: They can continue to use Firewire or start to use boxes that instead use only IP connectivity.

Firewire now has one foot firmly planted in the grave, but it could be some time before the entire body follows. According to the FCC waiver issued today, MSOs still must provide boxes with a "functional" IEEE 1394 interface to any sub who requests one (so, all 18 of you are still in good shape).

But the battle at the FCC isn't over, as it mulls new set-top rules that will help determine Firewire's final fate. The Commission is expected to vote on such rules before the end of the year. (See FCC Floats 'Simple' Gateway, CableCARD Rules

Intel Corp. (Nasdaq: INTC), Motorola Inc. (NYSE: MOT), and TiVo Inc. (Nasdaq: TIVO) were among those that wanted the waiver, claiming that mandated Firewire support adds unnecessary costs for a feature that MSOs rarely utilize, and that the allowance for only an IP connector would reduce the price of MSO-supplied set-tops. They likewise argued that IP has become the de facto method for transferring digital content between consumer devices. CableLabs has already approved DTCP-IP to protect video delivered on home networks. (See Intel Wants In on Set-Top Waiver Action and CableLabs, CEA Agree on DTCP-IP.)

The limited waiver isn't great news for Texas Instruments Inc. (NYSE: TXN) (which has Firewire business to protect) and the 1394 Trade Association, as both opposed the waiver petitions and suggested that consideration of the waivers might prejudge any future rule changes coming from the FCC. TI has also argued that the cost of the Firewire interface is a drop in the bucket versus the overall costs of set-top boxes, and that adoption of the technology has been slowed because most MSO-provided boxes block some capabilities of the interface. (See Blame It on Turkey Day .)

But the FCC didn't buy that, concluding that "IP connections will serve the same purpose that the IEEE 1394 interface requirement is intended to achieve – encourage connectivity between cable operator-leased set-top boxes and retail consumer electronics devices and computers."

— Jeff Baumgartner, Site Editor, Light Reading Cable