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May 13, 1999


Re: Commercial Availability of Navigation Devices, CS Docket No. 97-80

Although I support most aspects of this decision on reconsideration of our Report and Order on Commercial Availability of Navigational Devices, I dissent from Section B of this decision. I continue to disagree with the assumption that this agency must prevent multichannel video providers (MVPDs) from offering set-top boxes that integrate security with other functions in a set-top box (as opposed to a separable "point of deployment" or "POD" element) in order to "assure commercial availability" of set-top boxes.

As I explained in my dissent to the Report and Order, I do not find this level of market engineering necessary to fulfill the goal of Section 629 nor do I find it to be sound public policy. I will not repeat the discussion in my prior statement, but only note the following:

Section 629 did not direct the FCC to incent consumers to go out to buy set-top boxes. The mission here was to make sure that boxes were available and that consumers had a choice. We accomplished that objective by ensuring that manufacturers have the ability to produce boxes that can be easily used with the video system, much as phones can easily be used with the existing network. It goes well beyond the statutory objective to decide that government's role is not merely to assure availability but also success for manufacturers and retailers.

The decision to prohibit integrated boxes may deter innovation. The record of this proceeding shows that potential competitors to incumbent cable providers have been developing integrated boxes with unique functionalities as a way of competing. It is contrary to Section 629 and to good public policy to inhibit this development.

It is also contrary to good public policy to remove from the market one potentially cost-effective choice for consumers. It would be more practical to allow operators to deploy integrated boxes that may well be less costly and provide greater security for the system. The benefits of allowing operators to use such equipment would redound to consumers, giving them more equipment options at potentially lower prices.

Finally, I note that the ban is likely to skew present business decisions of operators about when they should buy new set-top boxes, how many they should buy and what plans they should make for deploying digital technology. MVPDs, particularly smaller systems and other non-exempt operators such as wireless cable operators, will be forced to make these decisions so as to avoid the potential for stranded investment, not on the basis of what might be best for their customers. I see no reason to put these operators in such an untenable position.

For all these reasons, I respectfully dissent from this portion of the decision.