September 21, 2006 4:00 AM PDT
Perspective: Heading off a potential FCC debacleSee all Perspectives
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The pace of technological developments has only accelerated since 1998. In March 2005, the FCC extended the integration ban implementation date to July 2007. Now the FCC again is considering requests by cable operators to extend the date. But since the last extension, the landscape has changed even more dramatically.
Verizon Communications and other telephone companies are rushing into the video business. Meanwhile, the two direct-broadcast satellite service operators have done an about-face and are now supporting equipment containing mainly proprietary features. And Congress finally has set a firm February 2009 date for the transition to all-digital broadcast television transmission.
With the changed landscape, this is a case crying out for regulatory relief. Downloadable security should be deliverable within the next few years, but not by July 2007. Implementing the integration ban in the meantime would be very costly to consumers with no real benefits.
Both the cable industry and Verizon estimate that the re-engineering required to enable their leased equipment to work with separate security devices will increase the cost for each box by $72 to $95, adding another $2 to $3 to monthly lease charges.
With a firm digital-TV transition date, it is counterproductive to deter consumers from switching by raising their price. Congress has authorized a fund to subsidize the purchase of non-multichannel video program converter boxes in anticipation of the analog-broadcasting cut-off.
But much less funding will be needed if more consumers already have the capability to receive digital transmissions using digital set-tops supplied by multichannel video program distributors. Moreover, requiring cable companies and Verizon to implement physical separation in the coming months would divert technical resources away from the task of implementing a downloadable security solution as quickly as possible.
Competitors should not be treated in a disparate fashion. Even though direct-broadcast satellite service operators--which account for more than 25 percent of all multichannel video program distributors' subscribers--have moved almost completely to proprietary set-top boxes, they remain exempt from the ban.
Fortunately, Congress recognized in 1996 that developments might well outrun any FCC mandates. It said the agency must waive any regulation if "necessary to assist the development or introduction of a new or improved multichannel video programming or other service offered over multichannel video-programming systems, technology or products."
While agencies have considerable inherent authority to waive regulations, Congress usually doesn't include such express waiver authority in particular statutory provisions, unless to make a point.
In the interest of consumers, the FCC should act quickly to extend the integration ban's implementation date for all multichannel video program distributors while closely monitoring the technological developments in a dynamic marketplace.
Randolph J. May is president of the Free State Foundation, a Maryland-based think tank. The views expressed here are his own.
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