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

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television programming through analog signals and now transmit programming through digital signals, this rule is outdated.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 technology. 

When Cablevision requested a waiver, it did so because the old rule prohibiting encryption was outdated.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. 

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