In Kevin Maney’s recent USA Today article he cites that the FCC 1968 Carterfone Decision could serve as a good example for the cable industry on how regulation can produce innovation and price competition. That ruling paved the way for any person to pull in radio transmissions & connect them to a regular telephone network - allowing a person to get on a radio, patch into a Carterfone on land, connect the phone line & complete a call. According to Maney, the ruling ‘unbundled’ the telephone system & opened the door for competition in the market.

The FCC’s integration ban is unsuited to the increasingly competitive converged world of video communication services. According to the FCC, the purpose of the ban was to create a competitive market for cable set-top boxes, so people could buy their own set-tops instead of having to rent them from a cable company. In actuality, the recent denial of cable's waiver requests would mean that, starting in July, consumers would be paying another $2 to $3 per month.

Although Cox has complied with the law and has done everything the FCC has requested in implementing the Congressional mandate to facilitate a retail market for devices that can access cable services without requiring a set-top box provided by a cable operator, we feel that forcing the cable industry to do things this way will drive up costs, which will then be passed along to customers and delay forthcoming technologies, instead of encouraging companies to invest in new downloadable security that will speed the transition at much lower costs.

If the ban goes forward and sticks, it will severely hinder innovation in digital cable services and digital cable ready equipment. The integration ban is not necessary. The existing law already requires cable companies to deploy CableCARDs, and that CableCARD-dependent equipment is already used by over 200,000 current cable customers, and the number is growing.

The cable industry is working on two initiatives that will bring the benefits the FCC is seeking to promote:

1. We are working to set standards for two-way interactive devices so that customers can buy CableCARD-enabled TVs and other devices that will operate on our networks AND allow interactivity for the enjoyment of the program guide, VOD and other advanced features.

2. We are working to develop a downloadable security option that would download security protocols directly to devices purchased at retail.

In addition, the cable industry is currently working with Consumer Electronic manufacturers to accommodate retail purchased devices that are equipped to work with CableCARDS. For example, if a consumer buys a CableCARD-enabled HDTV and they’re not interested in VOD or other interactive services, they can still get a CableCARD from us and enjoy one-way digital TV.

The reality is that the FCC’s ban on integrated security does not correspond with their goal of developing a robust market for low-end cable boxes for less-affluent customers to purchase cheaply. In actuality, it will do more harm than good for all consumers.