Video services

NCTA, Comcast Push for Blanket Exemption

Representatives from the National Cable & Telecommunications Association (NCTA) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) are urging the Federal Communications Commission (FCC) to expand a proposed exemption for high-definition-capable Digital Terminal Adapter (DTA) boxes with embedded security to all cable systems, and not merely to more bandwidth-strapped properties with 552MHz or less of activated channel capacity.

According to an ex parte document filed yesterday, NCTA general counsel Neal Goldberg, Comcast chief policy advisor James Coltharp, and Jonathan Friedman, a lawyer with Willkie Farr and Gallagher LLP (representing Comcast), pled their case in a meeting with several FCC officials, including FCC Media Bureau chief William Lake.

The meeting came in response to reports earlier this week that the FCC is considering a new rule that would allow some systems (those with 552MHz or less of bandwidth) to use HD-DTAs and sidestep a rule that bans cable operators from buying set-tops with embedded security. The FCC is expected to address the HD-DTA exemption as a component of a broader Notice of Proposed Rulemaking (NPRM) that's designed to "fix" some shortcomings of the current CableCARD regime. The FCC is slated to present the NPRM on Wednesday, April 21. (See FCC Chews on HD-DTA Exemption and FCC Floats 'Simple' Gateway, CableCARD Rules .)

The FCC has granted several waivers for standard-def DTAs, and operators such as Comcast have already deployed millions of them for analog-reclamation projects. (See Comcast's $1B Bandwidth Plan .)

However, the Commission has issued only one -- for a small system operated by Cable One Inc. -- that allows the use of hi-def DTAs. DTAs are relatively simple one-way digital-to-analog converter boxes, but a new type under development would enable the rendering of hi-def video signals. (See Cable ONE Looks to Pump Up HD-DTA Volumes and ACA Wants Action on Evolution's HD Box Waiver .)

Smaller operators argue that they need these inexpensive HD-DTAs (Cable ONE wants unit prices to be sub-$50) to perform all-digital transitions and free up capacity for more HDTV programming and services like Docsis 3.0. Short of a waiver, MSOs are required to buy and deploy more expensive HDTV boxes outfitted with CableCARD slots and security modules. (See A $50 Hi-Def DTA?)

In their argument to the FCC, the NCTA and Comcast tried to link the importance of DTAs with the goals the Commission has outlined in its proposed National Broadband Plan, because use of the devices can help operators clear out room for high-speed broadband services.

More specifically, they held that limiting the HD-DTA exemption would "impede cable's digitization efforts, and thereby undercut the Commission's broadband objectives."

They also played up Cable ONE's original argument for its HD-DTA waiver -- that HDTV services should no longer be considered "advanced" as they evolve to become "commonplace" and competitive table stakes for cable operators of all sizes. (See HD No Longer an 'Advanced' Service?)

"In light of these marketplace developments, it no longer makes sense to limit relief from the integration ban to one-way SD devices," the filling added. "Such relief should be extended to one-way devices with HD capability as well, and applied to all cable operators, not just small operators."

Limiting the exemption to 552MHz systems, they added, would prevent all cable customers from taking advantage of this new low-cost HD box option. On that note, they said "small-capacity" cable systems make up just 8 percent of the US cable universe, and an even smaller percentage of all cable subscribers.

They also tried to address a concern that the Consumer Electronics Association (CEA) has about HD-DTAs and DTA waivers in general -- that they undermine the "common reliance" required for the development of a vibrant, open retail market for set-tops, TVs, and other cable-ready digital video devices. (See CEA Attacks Cable One HD Plan.)

An HD-DTA exemption "would create no impediments to the retail marketplace," the cable crew argued, noting that there is no retail marketplace for DTAs. Technically, that's true -- retailers don't carry them. However, it's easy to find Comcast DTAs for sale by consumers on eBay Inc. (Nasdaq: EBAY), even if those boxes are actually the property of the MSO.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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