FCC Makes Cable Companies Obey Law! Activist Lawyer Faints In shock!

Oh my stars! After endless years of delay, the FCC has has denied the various waiver requests from Comcast and the National Cable Telecommunications Association to delay the implementation of the set-top box interoperability. My stars! The cable industry will actually be required to comply with a law passed in 1996! I am positively weak from shock. Now if only we could get the FCC to resolve the horizontal cable ownership that’s been pending since 1992.

More below . . . .

Some of you may remember back before 1992 when, to get cable (which had 30 channels at most and no special features beyond pay-tv), you had to rent a cable box from the cable company AND rent a seperate remote for an ADDITIONAL fee. Then, as if by magic, TVs started coming “cable ready” and we started to have “universal remotes” and the cable companies lost an easy $5/a month extra.

This did not happen by magic or as a function of technology changing on its own. We had the technology before 1992. But before 1992, cable companies did not have to let you attach other devices to the netowrk. They could just require you to get their special cable box ad charge you again for their special remote. And you just had to take it.

Then, in 1992, Congress passed the 1992 Cable Competition and Consumer Protection Act. The 1992 Cable Act required cable companies to open their standards for cable boxes and to allow people to attach cable boxes they bought elsewhere. Boom! The consumer electronic folks did their magic and a $5/month rental charge became something built into the box.

So in 1996, when Congress passed the 1996 Telecom Act and deregulated cable rates, they did include a pro-consumer provision (with a healthy lobbying boost from the consumer electronics industry) called the “set top box navigation devices” provision. Recognizing that “digital cable” and other nifty services were on the way, Congress mandated that “navigation devices” and other necessary devices for these digital services be interoperable and that consumers be able to buy versions of them from others.

So the FCC started a rulemaking proceeding. As explained in this article, the FCC finally settled on an interoperable little doo-hickey called “cable card.” Learning the lesson from the Microsoft “it’s-interoperable-if-you-can-reach-it-through-our-operating-system-
but-you-can’t-which-is-why-it-comes-bundled-with-it,” the FCC also created an “integration ban” that would prevent the cable guys from integrating the interoperable cablecard in a way that makes real interoperability impossible (see, the FCC can learn when it wants to).

Historic note: “Bundling” was a term in Colonial times for the practice of men and women courting one another to lie together in bed fully clothed for the purposes of mutual warmth while platonicly conversing. As with modern “bundling,” supporters of the practice claimed that screwing people was NOT the object of the exercise.

Although the FCC settled on rules in 2001, the cable company managed to drag the process out interminably. Finally, in 2005, the FCC informed the industry that this was it, they’d have enough time, stop dragging your feet, and comply with the cable card directive by 2005. The cable indstry which, as I have observed repeatedly, has traditionally led a charmed life at the FCC did their best to hide their giggles and pretend to go along with the joke. Unsurprisingly, as the 2007 deadline approached, many big cable companies and the NCTA filed requests for waiver on the grounds that 2 years could not possibly be long enough to comply with plugging an existing technology into their devices to make them interoperable. Apparently there is a shortage of those little screws you use to undo the bottom of the box.

Actually, they claimed to have security concerns. Security concerns, like “interference concerns” in spectrum, is a neat excuse because it’s all technical and stuff and the consequences of security failure are prety heinous. So claiming “security concerns” seemd like a good safe bet for the cable industry to go their usually compliant buddies at the FCC to get yet another “extension” of this 10-year Congressional mandate that FCC settled on five years ago.

But surprise! As observed in earlier entries like this one, Martin has no inclination to play nice with the cable industry. The FCC Media Bureau pretty much shocked everyone by saying that two years was really enough time to develop security you like, and other companies have created downloadable security you can rely on. so stop stalling and make the damn set top boxes interoperable.

Oh that I have lived to see the day! I can almost hear Brian Roberts shaking his head in beffudled bewilderment, like the scene in some movie where the underling suddenly rediscovers some spine and says “no” to evil boss’ order to destroy our brave and inspiring hero. “What? Why you miserable FCC! Don’t you understand you take orders from me! How dare you stand up to the cable industry!”

All kidding aside, what is significant about this latest escalation by the Martin FCC is that it relly hits the cable giants in the pocketbook — both as a matter of equipment redesign and as a matter of depriving cable subscribers of more delightful “bundling.” If the waiver denial holds (the industry can appeal to the full Commission or try to get a legislative fix), then we can expect interoperable (and therefore much cheaper) equipment in fairly short order.

By contrast, what the FCC has done so far, while possibly embarrassing (embracing a la carte), irritating (pushing “family tier” and indecency), or potentially beneficial to competitors (the recent preemption of local franchising), they haven’t directly cost the cable conlomerates (much) money. This has real impact. Of course, the impact would have been minimized the cable industry had complied with the freakin’ law Congress passed ten years ago, or even started genuinely cooperating with the FCC and the electronic industry five years ago, so I will not weep any tears for the poor cable cos and their self-made “regulatory burden.” Cable industry, I know it is always a shock when you discover that laws actually apply to you, and even more of a shock when the FCC enforces them. But be strong! You can get past this! In no time at all, I’m sure you’ll be finding exciting new ways to “bundle” with consumers. And remember, Martin still loves you on network neutrality.

Now if we can just get the FCC to close the pending rulemaking on setting a limit on the number of cable systems any one entity can own. You know, the one mandated by the 1992 Cable Act and remanded back to the FCC in 2001, with a further notice to “refresh the record” in 2005?

Hey, an activist lawyer can dream, can’t he?

Stay tuned . . . .

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