Effective Date and Imposes Stringent Reporting

Requirements

Washington, DC – In its ongoing effort to promote competition and assure the

commercial availability of cable-ready DTV equipment, the Federal Communications

Commission (FCC) today adopted a Second Report and Order in the Commercial Availability of

Navigation Devices proceeding.

The Order maintains the ban on cable operator deployment of integrated set-top boxes,

but defers the effective date of the ban by 12 months from July 2006 to July 2007. The 12-

month deferral is intended to afford cable operators additional time to investigate and develop a

downloadable security solution that will allow common reliance by cable operators and

consumer electronics manufacturers on an identical software security function without the

additional costs of physical separation inherent in the CableCard solution.

The Commission also imposed several reporting requirements to ensure that progress

continues to be made toward the statutory goals of Section 629. Specifically, the Order requires:

Downloadable Security Progress

By December 1, 2005, the cable industry must report to the FCC:

• Whether development and deployment of downloadable security is feasible.

If feasible, a timeline for deployment and state that it will use downloadable security in

its own devices.

Draft licensing terms for the downloadable software solution.

Two-Way Plug-and-Play Negotiations

By August 1, 2005 and every 60 days thereafter:

• NCTA and CEA must file joint status reports and hold joint status meetings with FCC on

progress on the negotiation of a bidirectional “plug and play” agreement and software-based

security agreement.

COMMISSIONER JONATHAN S. ADELSTEIN

In the Matter of Implementation of Section 304 of the Telecommunications Act of 1996,

Commercial Availability of Navigation Devices, CS Docket No. 97-80, Second Report & Order

(FCC 05-76)

Today’s decision was a difficult one. The Commission, along with the cable and

consumer electronics industries, continues to wrestle with how best to realize the clear

Congressional goal of assuring the commercial availability of navigation devices. The

Commission long ago decided that cable operators should be prohibited as of a date certain from

integrating navigation and security functionalities, in order to promote the competition envisioned

by the Telecommunications Act of 1996. Today’s action marks the third time we have extended

the date of the integration ban, which would have gone into effect in July, 2006. Cable interests

would have preferred that we eliminate the ban entirely; consumer electronics interests would

have preferred that we keep the ban in place and on schedule.

Given past delays, and even more importantly, the lack of any real alternative to leasing a

set-top box for cable subscribers who want access to the latest digital technologies, I was very

hesitant to support any further adjustment to the integration ban, absent a compelling reason to do

so. While a close call, I believe today’s decision provides a justification for a modest extension.

We make a strong case for the continued existence of the ban, but decide to postpone it, for one

year only, to give the players involved a chance to determine whether a downloadable security

solution is feasible, and if so, when it could be implemented. This technology would have costs

savings, compared to the alternative of physical separation of navigation and security

functionalities, for the benefit of consumers. At the same time, in this item, we require periodic

and various reports to ensure that cable operators live up to existing requirements (e.g., one-way

“plug-and-play” rules), and that the industries make decent progress toward future goals (e.g.,

two-way functionalities, software security solution). I thank my colleagues for their cooperation

in bolstering some of these reporting requirements. I will be keeping a close eye on the

information as it comes in.

I look forward to progress in all of these areas to promote competition and innovation,

and, ultimately, greater choice for consumers, as Congress intended.