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'War on Cable’ Cited in Court

2/08/2008 7:00 PM Eastern

Comcast is telling a federal court that a key reason it lost a regulatory dispute at the Federal Communications Commission last year was chairman Kevin Martin’s ongoing “war on cable” to pressure the industry into selling channels on an a la carte basis.

Comcast went to court after the FCC refused to grant it a waiver from a set-top box equipment regulation that had been granted to other cable companies. Comcast wanted a waiver so it could deploy low-cost integrated boxes to hasten its transition to digital TV signals, which is about 60% finished.

“The FCC has enforced the integration ban solely against Comcast and other traditional cable companies as part of the agency’s widely reported 'war on cable’ over a la carte programming, and not as part of any rational or fair administration of regulatory policies,” Comcast said in a Feb. 1 brief filed in the U.S. Court of Appeals for the D.C. Circuit.

Comcast’s lawyers get to make their oral argument before a three-judge panel on April 8.

Martin has put intense pressure on cable to go a la carte, claiming it would save consumers money and restrict the flow of indecent content. The industry has resisted, saying the FCC shouldn’t dictate business models and that parents have plenty of tools to filter by channel and program rating.

Integrated boxes house channel-selection and signal-security features, and cost less than the boxes the FCC has forced Comcast to deploy. The new boxes need insertable CableCards, which contain the signal-security codes. In the FCC’s view, cable-operator reliance on CableCard-enabled boxes will allow consumers to obtain set-tops from other sources besides cable operators.

If successful in court, Comcast hopes it can save hundreds of millions of dollars by being able to distribute low-cost, integrated digital boxes, which can cost up to $100 less per unit than CableCard-enabled boxes, according to a court filing by the National Cable & Telecommunications Association.

The FCC denied the wavier for at least two reasons. The first was that if Comcast didn’t use CableCard boxes, a retail market wouldn’t develop. The second was that if Comcast used CableCards, third-party makers of set-tops could be confident of Comcast’s technical support.

“Both rationales are a sham,” Comcast told the court.

September