TWC, FCC Settle Switching Spat

Time Warner Cable Inc. (NYSE: TWC) will make a $25,000 "voluntary contribution" as part of a settlement negotiated with the Federal Communications Commission (FCC) over earlier allegations that the MSO had not given local franchise authorities (LFAs) in Hawaii adequate notice that it was moving some channels to a "switched" tier.

The FCC hit TWC's Oceanic division with a $7,500 fine for that in August 2008, arguing in a "Notice of Apparent Liability for Forfeiture" that the introduction of switched digital video (SDV) constitutes a "change in service" that requires 30-day advanced written notice to the relevant LFA. The FCC also wasn't thrilled to hear complaints that customers who use one-way digital TVs with CableCARDs would need to get a set-top to gain access to channels that are moved to an SDV tier. The cable industry, however, has since remedied that with a device called the Tuning Adapter. (See FCC Dings TWC Over SDV , NCTA Sees Solution to Switching Snag, TWC Test Drives Tuning Adapters, and CableLabs Stamps SDV Tuning Adapters .)

Under a Consent Decree issued today, the FCC's Enforcement Bureau agreed to terminate its investigation into the matter unless any "new material evidence" later emerges.

In turn, Time Warner Cable agreed to a whole bunch of stuff on top of the $25,000 cash contribution. It also said it would withdraw a petition seeking to reconsider the original LFA-related FCC order and to provide advanced written notice to each LFA where its use of SDV causes so-called unidirectional cable products (UDCPs) to lose access to some programming without additional equipment (set-tops or Tuning Adapters, for example).

TWC claims to have also developed a new set of procedures (including revised letter templates created by the MSO's law department) that will ensure that it notifies all affected subs and all relevant LFAs at least 30 days in advance of introducing SDV technology. By the way, Time Warner Cable, one of SDV's champions, recently announced it would use the technology in New York City, its largest cable market. (See Time Warner Cable Relights Its SDV Fire .)

As part of the settlement, Time Warner Cable is also on the hook to file a compliance report with the FCC on Oct. 1, 2010.

Today's Consent Decree between the MSO and the FCC's Enforcement Bureau could further lift a chill on future SDV adoption. In June, the FCC "vacated" a separate SDV-related ruling that would've fined TWC and Cox Communications Inc. some $60,000 over allegations that they "willfully" prevented unidirectional CableCARD-based devices from accessing channels that were moved to a SDV tier. (See FCC Reverses SDV Ruling, FCC Levies More SDV-Related Fines , and SDV Fines Dropped? )

— Jeff Baumgartner, Site Editor, Cable Digital News

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