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The CableCARD Follies

Just sharing a couple of recent tidbits related to the ongoing saga created by the Federal Communications Commission (FCC) ban on integrated set-top security that went into effect last July, because, well, we try to follow that sort of thing 'round here. (See Countdown to 'Seven-Oh-Seven'.)

Reuters reports that Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s attempt to reverse the FCC's repeated denials of a waiver request for some low-end, entry-level set-tops has finally reached the courthouse. (See Comcast Takes CableCARD Battle to Court .)

Comcast is arguing that the denials are unfair, because the FCC granted waivers to other providers and the agency had offered to forgo the rule if the MSO agreed to à la carte concessions. (See Verizon & Others Get Their Waivers and Son of 'Waiver Central' .)

There's no telling yet when the court will make its decision, but it appears that Comcast is not off to a great start. According to the report, the MSO's "argument got a lukewarm response" from Judge Laurence Silberman, one of three judges hearing the case. He "questioned whether the court was required to defer to the FCC's judgment on the specifics of determining which waiver requests should be granted," according to Reuters.

Meanwhile, in Puerto Rico...
While the largest MSO in the U.S. continues to battle for its coveted waiver, a much smaller one in Puerto Rico is still trying to get one, too.

Choice Cable TV did obtain a waiver for the bare-bones DCT700, but it also wants one for higher-end HD-DVRs with integrated security. According to recent ex parte notices filed with the FCC, the operator argues that its customers, which have a median household income of less than $13,000, can afford to rent HD or DVR boxes so long as the devices are less expensive "refurbished" devices. One problem? A market for refurbished CableCARD-based set-tops doesn't exist yet and won't exist for quite some time.

Michael Adams, the COO of Adams Cable Equipment, a Olathe, Kan.-based firm that refurbishes set-tops and sells other used gear to small and rural U.S. operators as well as some in Central and South America, echoed the situation in a filing made on March 31.

"The integration ban has brought an abrupt end to the availability of refurbished set-top boxes for Puerto Rican cable operators that have depended upon them," Adams wrote. "We do not expect to be able to offer refurbished CableCARD devices on a regular basis for several years."

But hold on. Isn't the integration ban supposed to drive a retail market for set-tops? According to Choice Cable, that hasn't happened yet.

"CE manufacturers do not sell any CableCARD products at retail in Choice's service area," the operator claimed, noting that an employee contacted Sears and RadioShack in Ponce (the largest city in the operator's service area) and learned that not a single CableCARD-based device (TV or set-top) was available for purchase. However, two CableCARD-capable TVs were available at a CompUSA store, so long as the customer was willing to travel about 100 miles to the San Juan area.

Given the sorry consumer adoption of one-way "Plug & Play" TVs, there's little chance that anyone would be willing to travel 100 feet for one, let alone 100 miles. But that's just a (somewhat) educated guess. (See CableCARD Update III .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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