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Federal Communications Commission
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

September 14, 2000

News Media Contact:
Michael Perko 202-418-7200
Email: mperko@fcc.gov


Washington, DC Today the Federal Communications Commission adopted a Further Notice of Proposed Rulemaking ("Further Notice") and Declaratory Ruling ("Order") in its navigation devices proceeding.

In Section 629 of the Communications Act, Congress directed the FCC to adopt rules that would allow consumers to obtain "navigation devices," such as cable set-top boxes, remote control units and other equipment, from commercial sources other than their cable providers. In 1998, the Commission adopted navigation device rules with the intent of improving consumer choice by fostering a competitive retail market for this equipment and said that it would monitor the development of the commercial availability of navigation devices and commence a proceeding in the year 2000 to review the effectiveness of the rules and consider any necessary changes. The Further Notice adopted today initiates this review.

In various proceedings before the Commission, interested parties have argued that a copy protection licensing agreement under development by CableLabs, the Dynamic Feedback Arrangement Scrambling Technique ("DFAST") license, violates the Commission's navigation devices rules. Specifically, these parties asserted that the DFAST license requires that a copy protection encryption system be located in host navigation devices in violation of the security separation requirement of the Commission's navigation devices rules. The Commission's rules require that a cable operator's conditional access, or security, functions be located in a separate point of deployment ("POD") device.

In order to give guidance to interested parties and to prevent delay in the transition from analog-based technology to digital-based technology, the Commission determined in today's Order that this controversy was best resolved in the form of a narrow declaratory ruling, and concluded that some measure of anti-copying encryption technology located within a host navigation device is consistent with the Commission's navigation devices rules.

Summary of the Further Notice of Proposed Rulemaking:

In the Further Notice adopted today, the Commission sought comment on the following issues:

  • Whether the interface specifications developed by CableLabs allow consumer electronics manufacturers to build equipment that provides consumers a viable alternative to the equipment provided by their cable operator.

  • The effect operator provision of integrated equipment has had on achieving a competitive market and whether the 2005 date for the phase-out of integrated boxes remains appropriate.

  • Obstacles or barriers preventing or deterring the development of a retail market for navigation devices.

  • What actions, if any, should the Commission initiate to achieve the statutory objective of competition in the navigation devices market.

Summary of the Declaratory Ruling:

In today's Order, the Commission addressed the narrow issue of whether technology licenses requiring copy protection measures to be located within commercially available equipment are consistent with the Commission's navigation devices rules. The Order noted that the Commission's initial navigation devices Order expressly contemplated the inclusion of copy protection measures in navigation host devices and that such measures would not violate the security separation requirement. Today's Order reiterated that some measure of anti-copying encryption technology is consistent with the intent of the rules because such measures protect a gap where digital data would otherwise be available "in the clear" and subject to unrestricted digital copying.

With this controversy resolved, the Commission directed industry participants to finalize negotiations necessary to bring to fruition the goals of Section 629 and requested that industry participants submit, within 30 days of the release of the Order, a report on the status of the DFAST license, including a final version of a completed DFAST license agreement.

Although today's ruling clarified that the inclusion of some amount of copy protection within a host device does not violate the navigation devices rules, the Commission did not determine whether specific copy protection terms or technology were consistent with the rules. The Commission also concluded that no evidence was presented that reasonable home copying would be impeded by the inclusion of copy protection within host devices.

Action by the Commission September 14, 2000, by Further Notice of Proposed Rulemaking and Declaratory Ruling (CS Docket # 97-80, FCC 00-341).

- FCC -

Cable Services Bureau contact: Thomas Horan at (202) 418-7200.
TTY: (202) 418-7172