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FCC Awards, Denies More Box Waivers

Almost a month after the Federal Communications Commission (FCC) July 1 ban on set-tops with integrated security went into effect, yet another chapter was added to the saga this week when the agency's Media Bureau acted on another batch of operator waiver requests. (See Waiver Central and Countdown to 'Seven-Oh-Seven'.)

The Bureau awarded limited, one-year waivers to a group comprising two traditional MSOs and two cable overbuilders: James Cable LLC; Great Plains Cable Television Inc.; RCN Corp. ; and WideOpenWest (WOW). Those operators may continue to use certain set-tops models with integrated security through July 1, 2008, on the basis of their tenuous financial positions.

Charter Communications Inc. received a similar temporary waiver in May. (See MSOs Get Waiver on Set-Top Security.)

"In light of Petitioners' demonstrated financial hardships… and consistent with the Charter Order, we conclude that a limited, one-year grant of their waiver requests is justified," the Media Bureau explained, adding that those MSOs may also request an extension to the initial 12-month waiver term.

Among the group, RCN had been the most vocal, claiming in previously filed comments that the low-end Motorola Inc. (NYSE: MOT) DCT700, a box that uses integrated security, costs about $84 per unit, while the closest CableCARD-based equivalent, the DCH100, costs about $232 each. RCN had also claimed that models such as the DCT700 were essential to the operator's digital transition.

Following similar waivers awarded to Verizon Communications Inc. (NYSE: VZ) and dozens of other service providers just ahead of the July 1 ban, the FCC also granted waivers to seven telcos -- Colo Telephone Company, Griswold Cooperative Telephone Company, Coon Creek Telephone Company, Wellman Cooperative Telephone Association, Interstate Cablevision Company, NTS Communications Inc., and XIT Telecommunications & Technology Inc. -- on the basis that they now operate all-digital systems or pledge to by February 17, 2009.

JetBroadband VA LLC , an operator that serves parts of Virginia and West Virginia, scored a deferral until September 1, 2007. The company said it plans to migrate to a downloadable conditional access system and set-top platform under development by Beyond Broadband Technology LLC (BBT) . (See Small Cablers Plan Sub-$100 Set-Tops.)

JetBroadband is also on the hook to submit "detailed information… regarding the openness of BBT's standards" by August 3, 2007. BBT claims to have completed a successful alpha test late last month, with expectations it will enter full production by the fourth quarter of this year. (See BBT Exits Alpha .)

Denied!
The FCC Media Bureau also denied a two-year waiver request from ComSouth Telesys Inc., a Hawkinsville, Ga.-based operator of phone and cable services, and questioned the company's efforts to be ready in time for the deadline.

Among its arguments, ComSouth claimed its set-top vendor (Motorola) would not be able to deliver compliant boxes by the July 1, 2007, deadline, and not before early September 2007.

The Media Bureau countered that the operator "does not assert, however, that delivery of compliant boxes will take two years. Similarly, ComSouth did not provide any documentation to support its claim that it has made substantial efforts to comply with the integration ban."

The FCC did provide some wiggle room, granting ComSouth the ability to file an amended request for a waiver for low-cost, limited-capability boxes, or a waiver based on a commitment to go all-digital by Feb. 17, 2009.

Finally, the FCC Media Bureau denied a waiver request from Innovative Cable TV of the U.S. Virgin Islands, which sought continued deployment of the Motorola DCT1000 and the Motorola DCT2000 through December 31, 2009.

Innovative, which serves 15,251 subs on St. Thomas-St. John and 10,762 subs on St. Croix, argued that a waiver was necessary to enable transition to an all-digital network, adding it could replace about 19,000 analog boxes with digital models for about $2 million using integrated set-tops. Those costs would double using CableCARD-based models, the company said.

Moreover, the operator claimed a pending bankruptcy proceeding involving its parent companies preclude it from committing to an all-digital network by February 2009.

"While Innovative claims that it is unable to commit to deploying an all-digital network by February 17, 2009, because of the significant costs it will incur to make the digital transition, we have no evidence to conclude that these costs are any more substantial than those facing other operators that have committed to deploy all-digital networks on or before February 17, 2009," the FCC said in its ruling. The agency has given Innovative clearance to file an amended waiver, however.

— Jeff Baumgartner, Site Editor, Cable Digital News

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