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Cox, TWC SDV Refunds Deferred

The Federal Communications Commission (FCC) 's Enforcement Bureau has stayed the effective date for refunds Cox Communications Inc. and Time Warner Cable Inc. (NYSE: TWC) are due to pay to customers who were affected by deployments of switched digital video (SDV) in parts of Hawaii and Virginia.

In an order issued Tuesday, the FCC said it would delay the effective date of those refund requirements indefinitely "in order to fully consider the merits of the Petitions for Reconsideration" submitted by both Cox and TWC.

The whole issue stems from allegations that TWC's systems in Kauai and Oahu, Hawaii, and Cox's system in Fairfax County, Va., "willfully" prevented some unidirectional CableCARD-based devices from accessing channels that were moved to a switched tier, and for failing to provide those devices with the appropriate "virtual channel tables."

The FCC argued that Cox and TWC customers that use one-way CableCARD products were hamstrung because they were unable to access and view SDV channels without requiring those subs to rent out interactive digital set-tops. As a result, the FCC hit the MSOs for fines totaling $60,000 -- $20,000 for each alleged violation. The Commission also required the operators to refund affected customers based on when the MSOs deployed SDV in those systems. (See FCC Levies More SDV-Related Fines .) Last fall, the FCC also slapped TWC's Oceanic division in Hawaii with a $7,500 fine, claiming the MSO failed to give local franchise authorities adequate notice that a number of channels were being moved to a switched tier. (See FCC Dings TWC Over SDV .)

The cable industry is trying to remedy the SDV problem with the Tuning Adapter, a device that enables one-way CableCARD products, which include some digital TVs and TiVo Inc. (Nasdaq: TIVO)-made DVR models, to tune and display channels delivered in an MSO's switched tier. (See CableLabs Stamps SDV Tuning Adapters .) Newer tru2way boxes and TVs are designed to access SDV programming as well as other interactive cable applications, such as video-on-demand (VoD), without any special help. (See Tru2Way in Atlanta, EchoStar Slings Its First Tru2way Set-Top, Cox Puts NDS at Heart of Tru2way Plan , and Denver, Chicago First to Get Tru2way TVs.)

Although the stay issued this week does not affect the fine-related portion of the original SDV-related notices, it does give Cox and Time Warner Cable a reprieve from having to dole out customer refunds while the FCC mulls things over. The FCC's Enforcement Bureau has not indicated when it expects to draw any final conclusions on those petitions, which were originally filed with the Commission on Feb. 18, 2009.

— Jeff Baumgartner, Site Editor, Cable Digital News

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