Comcast Loses Set-Top Converter Box Appeal

WASHINGTON (CN) - The D.C. Circuit shot down Comcast's third challenge to the Federal Communication Commission's policy for converter boxes that consumers use to access subscription programming.

The ruling rejects the cable company's request for a waiver stating that recent FCC converter-box regulations do not apply to some of its low-cost converter boxes.

Until recently, consumers leased their converter boxes directly from the video provider in a "bundled" service. Converter boxes provide two main functions: security and navigation. Congress tried to create a competitive market for these services by passing the Telecommunications Act of 1996, which required the FCC to adopt regulations that would open up the market for converter boxes functions.

In 1998, the FCC responded with a rule mandating the separation of the "security element" of converter boxes from the "basic navigation device."

Video providers introduced the "CableCARD," a credit card-sized security gadget that plugs in to the converter box. The FCC also told video providers to stop selling or leasing converter boxes containing both security and navigation features.

Comcast appealed the FCC's refusal to waive the integration ban for three of its lowest-cost integrated boxes. The agency had agreed to entertain waivers for low-cost boxes with limited capabilities, but said Comcast's boxes contain too many features, such as personal video recording and broadband Internet access, to qualify as "limited-capability."

The appellate judges said the agency's explanation for the denial was "quite reasonable."

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