STELAR! Congress Dumps CableCARD Rule

Nov. 26, 2014
The U.S. House of Representatives voted last week to pass H.R. 5728, the Satellite Television Extension and Localism Reauthorization Act of ...
The U.S. House of Representatives voted last week to pass H.R. 5728, the Satellite Television Extension and Localism Reauthorization Act of 2014 (STELAR). One day later, the Senate followed suit, hotlining the bill, which means that it was passed by way of a unanimous consent agreement.

"Senate Commerce Committee Chairman Jay Rockefeller (D-WV) and Ranking Member John Thune (R-SD), working in a cooperative, bipartisan fashion, deserve high praise for gaining Senate passage of this bill," wrote American Cable Association President Matthew Polka. "ACA urges President Barack Obama to sign this bill into law immediately."

The legislation aims, among other things, to reform federal CableCARD regulations. Currently, these rules, also known as the integration ban, require that cable operators deploy set-top boxes that contain a separate security module. In other words, security cannot simply be integrated into the box nor provided via software or firmware.

Congressman Gene Green (D-TX), who co-authored the provision that would repeal this rule, said the integration ban has cost American consumers more than $1 billion over the past seven years. "(The bill) requires commonsense policies that will promote true competition in the cable set-top box market," he said.

The ACA noted that the integration ban has been particularly burdensome on smaller cable operators while at the same time has failed to create a retail STB market on any scale. "By requiring the FCC to establish a working group to consider next generation alternatives to CableCARDs, the provision represents a consumer-friendly compromise between the interests of cable operators and consumer electronics manufacturers," Polka said. Specifically, the working group must make recommendations nine months after enactment as the ban will be lifted one year after enactment.

The NCTA also applauded passage of STELAR. "We are especially pleased that the legislation also sunsets the FCC's integration ban rule - an unnecessary technology mandate that violates the principles of competitive neutrality and forces cable customers leasing set-top boxes to bear added costs and higher energy use for no additional benefit."

"Eliminating the FCC's Integration ban is an important recognition that today's competitive video providers and their customers shouldn't be held back by expensive technology mandates that offer no consumer benefit," the NCTA also said.

Charter Communications (NASDAQ:CHTR) weighed in as well, saying the "consumer oriented reforms contained within STELAR will help modernize current law and promote better service for consumers." And Comcast (NASDAQ:CMCSA) commended congressional leadership for "acting in a timely fashion to shape the bipartisan STELAR, which has real benefits for consumers and competition, including phasing out the integration ban."

The legislation also reforms retransmission consent rules. It prevents separately owned broadcast stations in local markets from coordinating retransmission consent negotiations. The ACA said the provision essentially expands an anti-collusion rule adopted by the FCC in March that was limited to joint negotiations involving two top-four stations in the same market.