Concerning CableCARD's Place After the EchoStar Case

At FSF's June 4 lunch seminar, "If I Were FCC Chairman..." panel discussion included the future of FCC video device regulation. The panel was divided on the FCC's much-criticized "AllVid" proposal for more expansively regulating video devices. But the panel was essentially united on their displeasure with the current CableCARD regulatory regime for cable set-top boxes. 

The EchoStar v. FCC decision by the D.C. Circuit this past January was also brought up in the seminar panel's discussion. My FSF Perspectives paper, "A Recent Appeals Court Ruling on Ancillary Power Limits Could Curb Regulatory Overreach," addressed that case and its potential impact on AllVid. But the case has immediate impact on CableCARD, as discussed during the seminar.

FSF's Fifth Annual Conference also featured a wide-ranging debate and discussion on FCC regulation of video devices. The insights offered by FCC Media Bureau Chief were especially helpful regarding the status of video device regulation at the FCC. What follows is an excerpt from the transcript for the Annual Conference panel "The Right Regulatory Approaches for Video Service Providers."

The AllVid proposal is still out there. We've continued to watch the developments in the marketplace. And there have been a lot of developments since we've made that proposal. I'd like to hope and think that maybe the proposal would help to spur some of those developments. 

One thing that's happened is it's clear that whole home solutions are something that consumers increasingly want. They just don't want one box in each room separately. They want a system in which they can record in this room and watch in that room, and so forth. One thing we did last year was to impose the requirement that boxes have an IP output. Whatever the status of that first box in the home, we wanted to make sure that there was a retail marketplace for all the other boxes that would be connected to it. And that would be enabled by having an IP output on the first box. 

Whether that rule survives the EchoStar decision is an open question. We know that our CableCARD regime took a real hit in that decision. One of the things we're thinking about is what we do in terms of reinstating some or any of those rules. And, we're thinking very much about what will be the replacement for the CableCARD regime in an IP world. It's not designed for an IP world. 

The AllVid solution was proposed at a time when we were farther from an IP world than we are today. So we're open for suggestions as to exactly how we ought to treat the whole set-top box issue when cable has gone IP. 

An April 18 Order by Bureau Chief Lake granting Charter Communications a waiver from the FCC's set-top box integration ban shed further light on the impact of EchoStar on CableCARD. The FCC's Media Bureau's waiver would allow Charter to initiate an open-standard, downloadable security solution that supports third party retail devices. In paragraph 9 of its Order, the Media Bureau explained:

We find good cause to grant Charter a limited two-year waiver of Section 76.1204(a)(1) subject to conditions. We recognize that, in vacating the Second Report and Order, the EchoStar decision eliminated the requirement that cable operators continue to support CableCARD as a means of complying with the integration ban. Charter does not need a waiver in order to implement a downloadable security system as long as such system complies with the integration ban. Prior to the EchoStar decision, the Commission's CableCARD rules furthered Section 629 by ensuring that consumers could purchase CableCARD retail devices with the knowledge that such devices would work on their cable operators’ digital cable system. After the EchoStar decision, we recognize that there is the potential for a fractured cable set-top box market should different cable operators adopt differing non-CableCARD separated-security standards. In the past, the Commission has encouraged the development of an industry-wide downloadable separate security standard to further the purposes of Section 629. We believe granting Charter's waiver under the circumstances presented in this proceeding will increase the chance of an industry-wide standard developing... Therefore, Charter’s expansion of the market for devices operating this particular downloadable system should help "assure the commercial availability" of navigation devices, as Section 629 directs.

EchoStar may not have brought about the elimination of the integration ban. That's something that FSF President Randolph May and I have urged on several occasions. Expect to hear more on this in the future.