Video services

Comcast Takes CableCARD Battle to Court

Comcast Corp. (Nasdaq: CMCSA, CMCSK) came through on its threat to sue the Federal Communications Commission (FCC) after the agency repeatedly refused to grant the MSO a waiver on certain digital set-top models with integrated security. (See Countdown to 'Seven-Oh-Seven'.)

In a suit filed yesterday with the U.S. Court of Appeals for the District of Columbia circuit, the MSO is seeking expedited review of its appeal.

According to the court documents, Comcast is proposing that initial submissions be made by Nov. 28, with final briefs on Feb. 8. After that, Comcast is calling on the clerk to schedule the case for oral arguments "on the first available date."

The FCC first denied Comcast's request in January, then repeated the decision in early September, at which point Comcast said it would take the case to court. (See FCC Denies Comcast Again .)

In the suit, Comcast alleges that the FCC dragged its feet in acting on the waiver request and treated the MSO unfairly, based on waiver requests the agency did grant to more than a hundred other MVPDs (multichannel video program distributors) just ahead of the July 2007 deadline. The FCC granted most of those waivers on the condition that the service providers migrate to all-digital platforms by February 2009. (See Son of 'Waiver Central' and Verizon & Others Get Their Waivers.)

Comcast cited a statutory provision that requires the FCC to waive certain regulations within 90 days, adding that the agency did not act on the waiver until 503 days after Comcast filed its initial request on April 19, 2006. It sought waivers on three low-end models: the Motorola Inc. (NYSE: MOT) DCT700, Scientific Atlanta Explorer 940, and Pace Micro Technology "Chicago" DC501p.

Those models do support high-definition television and digital video recorders, but they are two-way and therefore capable of delivering video-on-demand services. In denying Comcast, the FCC held that those boxes did not satisfy the requirements of devices defined in an earlier 2005 order.

However, the FCC granted waivers to other providers "for identical and substantially similar equipment," Comcast argues in the suit.

At least two FCC commissioners, Robert McDowell and Jonathan Adelstein, appear to agree. They voted to deny Comcast's waiver request, but they issued a joint statement that the waiver process focused "on the operator who requested the waiver, rather than the box."

Comcast also claims the denied waiver has caused it to lose subscribers and damaged its ability to compete for new ones.

"In an intensely competitive environment, analog subscribers are at the greatest risk of switching to Comcast's competitors as they look for an improved offering," the MSO notes in the court documents.

The complaint refers to the DCT700 as a "gateway" to the digital cable environment that eventually can lead customers to purchase and order higher levels of digital services and applications, including HDTV and DVRs.

Comcast, like other MSOs, also bemoaned the relatively high costs of lower-end, CableCARD-capable set-tops. It claimed that the lowest-cost CableCARD-enabled box it can buy for its Motorola conditional access footprint is roughly double the cost of the DCT700. The cheapest CableCARD box for Scientific Atlanta systems, Comcast disclosed, is roughly four times that of the DCT700.

— Jeff Baumgartner, Site Editor, Cable Digital News

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