FCC Record, Volume 25, No. 17, Pages 13916 to 14803, October 4 - October 22, 2010 Page: 14,659

                                
II.    BACKGROUND
2.     In the Telecommunications Act of 1996, Congress added Section 629 to the
Communications Act.2 That section directs the Commission to adopt regulations to assure the commercial
availability of navigation devices used by consumers to access services from multichannel video
programming distributors ("MVPDs"). Section 629 covers "equipment used by consumers to access
multichannel video programming and other services offered over multichannel video programming
systems."3 Congress, in enacting the section, pointed to the vigorous retail market for customer premises
equipment used with the public switched-telephone network and sought to create a similarly vigorous
market for devices used with MVPD services.4
3.     In 1998, the Commission adopted the First Report and Order to implement Section 629.5
The order required MVPDs to make available a conditional access element separate from the basic
navigation or host device, in order to permit unaffiliated manufacturers and retailers to manufacture and
market host devices while allowing MVPDs to retain control over their system security.6 The technical
details of this conditional access element were to be worked out in industry negotiations. In 2003, the
Commission adopted, with certain modifications, standards on which the National Cable and
Telecommunications Association ("NCTA") and the Consumer Electronics Association ("CEA") had
agreed in a Memorandum of Understanding ("MOU").7 The MOU prescribed the technical standards for
one-way (from cable system to customer device) CableCARD compatibility. The CableCARD is a
security device provided by an MVPD, which can be installed in a retail navigation device bought by a
consumer in the retail market to allow the consumer's television to display MVPD-encrypted video
programming. To ensure adequate support by MVPDs for CableCARDs, the Commission prohibited
MVPDs from integrating the security function into set-top boxes they lease to consumers, thus forcing
MVPDs to rely on CableCARDs as well.' This "integration ban" was initially set to go into effect on
January 1, 2005,9 but that date was later extended to July 1, 2007.1 Although the cable industry has
2 See Telecommunications Act of 1996, Pub. L. No. 104-104,  304, 110 Stat. 56, 125-126 (1996); 47 U.S.C.  549.
3 47 U.S.C.  549(a).
4 H.R. REP. No. 104-204, at 112-3 (1995).
s Implementation of Section 304 of the Telecommunications Act of 1996: Commercial Availability of Navigation
Devices, 13 FCC Rcd 14775 (1998) ("First Report and Order").
6 Id. at 14808,   80; 47 C.F.R.  76.1204(a)(1).
7 See Implementation of Section 304 of the Telecommunications Act of 1996: Commercial Availability of
Navigation Devices; Compatibility Between Cable Systems and Consumer Electronics Equipment, 18 FCC Red
20885, at 20926-20944, Appendix B (2003) ("Plug and Play Order"). See also Implementation of Section 304 of
the Telecommunications Act of 1996: Commercial Availability of Navigation Devices; Compatibility Between Cable
Systems and Consumer Electronics Equipment, 18 FCC Rcd 518, 531-609, Appendix B (2003).
8 Implementation of Section 304 of the Telecommunications Act of 1996: Commercial Availability ofNavigation
Devices, 20 FCC Rcd 6794, 6794, 1 2 (2005) ("[C]ommon reliance by cable operators on the same security
technology ... that consumer electronics manufacturers must employ in developing competitive navigation devices
will help attain the goals of Section 629 of the [Telecommunications] Act.").
9 Id.
10 In April 2003, the Commission extended the effective date of the integration ban until July 1, 2006. See
Implementation of Section 304 of the Telecommunications Act of 1996: Commercial Availability of Navigation
Devices, 18 FCC Rcd 7924, 7926,   4 (2003). Then, in 2005, the Commission further extended that date until July
(continued....)

14659

Federal Communications Commission

FCC 10-181