FCC Says Goodbye to Waivers and Hello to a New Rule for Digital Cable Technology

December 1, 2011 , , ,

For many years, consumers were able to save some money on
their cable bills by simply subscribing to a basic tier of programming.  For
additional programming, subscribers had to pay for a set-top box provided by the
cable company.  This worked fine when
cable companies transmitted the programming in an analog format.  But
times, and technology, are changing.  Now even the basic tier, like the
more expensive ones, is going digital, and that means consumers will have to
pay for a box even if they didn’t have one before.  In response to these events, the Federal
Communications Commission proposed a new rule.  Public Knowledge applauds the FCC for proposing
the rule in response to digital cable technology and protecting subscribers
from being hit too hard as a result of the digital transition. 

In the early 1990s, the FCC prohibited cable companies from
encrypting basic cable digital signals so subscribers with analog televisions
could view basic cable programming without a set-top box.  Because cable companies stopped transmitting
television programming through analog signals and now transmit programming
through digital signals, this rule is outdated. 
Most cable companies want to encrypt the basic cable packages to prevent
theft and improve customer service.  In
2009, as part of a move towards exclusively digital delivery, Cablevision
requested a waiver to encrypt its basic tier digital signals. This would allow
Cablevision to serve its subscribers remotely by simply activating an account
from the home office instead of having to send out a technician.  The FCC granted Cablevision’s waiver in
January 2010. 

Two concerns arose from the waiver, but the FCC is
addressing each concern:

First, PK was originally concerned that the FCC would not
propose a new rule to address the technological update.  In the past, a party (like Cablevision) could
request a waiver from a rule that was no longer relevant because of
technological updates.  The FCC granted
the waiver if the party had a reasonable purpose for the waiver.  The problem was that if one party needed a
waiver, it was inevitable that other parties also needed waivers.  The FCC granted waiver after waiver instead
of nipping the problem in the bud with a new rule that addressed the new

When Cablevision requested a waiver, it did so because the
old rule prohibiting encryption was outdated. 
PK commented that the FCC should propose a new rule because many other cable companies would
soon find themselves in the same position as Cablevision.  The FCC did just that, and cable companies
and other commenters can now offer input to make a useful, generally applicable
rule to encrypt digital signals.  This
rule-based approach to change is much more reasonable than trying to cope with
change through individual waivers. 

Second, PK is concerned about the small percentage of
subscribers that still have analog televisions. 
Previously, subscribers that didn’t want a digital converter box didn’t
pay for one, but now, subscribers will have to pay for a converter box.  These subscribers should still be able to
watch the television shows they receive as part of their basic cable package
even if they cannot afford digital converter boxes.  PK and Media Access Project jointly
filed comments supporting the FCC’s proposed rulemaking and suggested two minor adjustments to the rule to protect subscribers with
analog televisions.  We asked the FCC to broaden
the criteria used to determine who will qualify for assistance to obtain
converter boxes.  Broadening the
criteria will help cable companies predict which subscribers will need
assistance.  We also want to ensure that
subscribers do not experience “bill shock” by clarifying in the rule that
converter boxes are free for a specified period of time and that cable companies
notify the subscriber each month for three months before the subscriber will be
charged for the box.

With these minor adjustments, Public Knowledge fully
supports a rulemaking that will not only allow cable companies to develop and
promote new services while protecting low-income subscribers, but also will
create a new rule that addresses the current digital technology.