Federal Communications Commission DA 09-1571
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
James Cable, LLC
Request for Waiver of Section 76.1204(a)(1) of 
the Commission’s Rules 
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CSR-7216-Z
MEMORANDUM OPINION AND ORDER AND ORDER ON RECONSIDERATION
Adopted:  July 21, 2009 Released:  July 21, 2009
By the Acting Chief, Media Bureau:
I. INTRODUCTION
1. James Cable, LLC (“James Cable” or “Petitioner”) filed with the Media Bureau a request 
for extension of waiver of the ban on integrated set-top boxes set forth in Section 76.1204(a)(1) of the 
Commission’s rules.1 For the reasons stated below, we grant James Cable’s request.
II. BACKGROUND
A. Section 629 of the Act
2. Congress directed the Commission to adopt regulations to assure the commercial 
availability of navigation devices more than ten years ago as part of the Telecommunications Act of 
1996.2 The Commission implemented this directive in 1998 through the adoption of the “integration 
ban,” which established a date after which cable operators no longer may place into service new 
navigation devices (e.g., set-top boxes) that perform both conditional access and other functions in a 
single integrated device.3 Originally, the Commission established January 1, 2005 as the deadline for 
  
1 47 C.F.R. § 76.1204(a)(1).  The separation of the security element from the basic navigation device required by 
this rule is referred to as the “integration ban.”  See James Cable, LLC et al Requests for Waiver of Section 
76.1204(a)(1) of the Commission’s Rules,  23 FCC Rcd 10592 (2008) (“July 2008 Financial Hardship Order”).
2 See Section 629(a) of the Communications Act of 1934, as amended, 47 U.S.C. § 549(a) (requiring the FCC “to 
adopt regulations to assure the commercial availability, to consumers of multichannel video programming and other 
services offered over multichannel video programming systems, of converter boxes, interactive communications 
equipment, and other equipment used by consumers to access multichannel video programming and other services 
offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not 
affiliated with any multichannel video programming distributor”); see also Telecommunications Act of 1996, Pub. 
L. No. 104-104, § 304, 110 Stat. 56, 125-126 (1996).
3 See Implementation of Section 304 of the Telecommunications Act of 1996:  Commercial Availability of 
Navigation Devices, 13 FCC Rcd 14775, 14803, ¶ 69 (1998) (“First Report and Order”) (adopting Section 76.1204 
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compliance with the integration ban.4 On two occasions, the National Cable and Telecommunications 
Association (“NCTA”), on behalf of all cable operators, sought – and obtained – extensions of that 
deadline.5 The Commission ultimately fixed July 1, 2007 as the deadline in order to afford cable 
operators additional time to determine the feasibility of developing a downloadable security function that 
would permit compliance with the Commission’s rules without incurring the cable operator and consumer 
costs associated with the separation of hardware.6
3. The purpose of the integration ban is to assure reliance by both cable operators and 
consumer electronics manufacturers on a common separated security solution.7 This “common reliance” 
is necessary to achieve the broader goal of Section 629 – i.e., to allow consumers the option of purchasing 
navigation devices from sources other than their MVPD.8 Although the cable industry has challenged the 
lawfulness of the integration ban on three separate occasions, in each of those cases the D.C. Circuit 
denied those petitions.9 In limited circumstances, however, operators may be eligible for waiver of the 
integration ban.10
     
of the Commission’s rules, subsection (a)(1) of which (1) required multichannel video programming distributors 
(“MVPDs”) to make available by July 1, 2000 a security element separate from the basic navigation device (i.e., the 
CableCARD), and, in its original form, (2) prohibited MVPDs covered by this subsection from “plac[ing] in service 
new navigation devices … that perform both conditional access and other functions in a single integrated device” 
after January 1, 2005); see also 47 C.F.R. § 76.1204(a)(1) (1998).  
4 First Report and Order, 13 FCC Rcd at 14803, ¶ 69.
5 In April 2003, the Commission extended the effective date of the integration ban until July 1, 2006.  See 
Implementation of Section 304 of the Telecommunications Act of 1996:  Commercial Availability of Navigation 
Devices, 18 FCC Rcd 7924, 7926, ¶ 4 (2003) (“Extension Order”).  Then, in 2005, the Commission further extended 
that date until July 1, 2007.  See Implementation of Section 304 of the Telecommunications Act of 1996:  
Commercial Availability of Navigation Devices, 20 FCC Rcd 6794, 6810, ¶ 31 (“2005 Deferral Order”).
6 2005 Deferral Order, 20 FCC Rcd at 6810, ¶ 31.
7 See Cablevision Systems Corporation’s Request for Waiver of Section 76.1204(a)(1) of the Commission’s Rules, 
22 FCC Rcd 220, 226, ¶ 19 (2007) (citing the 2005 Deferral Order, 20 FCC Rcd at 6809, ¶ 30) (explaining why the 
Commission “require[d] MVPDs and consumer electronics manufacturers to rely upon identical separated security 
with regard to hardware-based conditional access solutions”).
8 See S. REP. 104-230, at 181 (1996) (Conf. Rep.).  See also Bellsouth Interactive Media Services, LLC, 19 FCC 
Rcd 15607, 15608, ¶ 2 (2004).  As the Bureau noted, Congress characterized the transition to competition in 
navigation devices as an important goal, stating that “[c]ompetition in the manufacturing and distribution of 
consumer devices has always led to innovation, lower prices and higher quality.”  
9 Comcast Corp. v. FCC, 526 F.3d 763 (D.C. Cir. 2008); Charter Comm., Inc. v. FCC, 460 F.3d 31 (D.C. Cir. 
2006); General Instrument Corp. v. FCC, 213 F.3d 724 (D.C. Cir. 2000).  The Commission argued, and the D.C. 
Circuit agreed, that the integration ban was a reasonable means to meet Section 629’s directive.  Charter Comm., 
Inc. v. FCC, 460 F.3d 31, 41 (D.C. Cir. 2006) (“this court is bound to defer to the FCC's predictive judgment that, 
‘[a]bsent common reliance on an identical security function, we do not foresee the market developing in a manner 
consistent with our statutory obligation.’”). 
10 For example, Section 629(c) provides that the Commission shall grant a waiver of its regulations implementing 
Section 629(a) upon an appropriate showing that such waiver is necessary to assist the development or introduction 
of new or improved services.  47 U.S.C § 549(c).  Furthermore, petitioners who have shown good cause have 
received waivers of the integration ban pursuant to Sections 1.3 and 76.7 of the Commission’s rules.  See Great 
Plains Cable Television, Inc. et al Requests for Waiver of Section 76.1204(a)(1) of the Commission’s Rules, 22 FCC 
Rcd 13414, 13426-7, ¶¶ 39-40 (2007) (“2007 Financial Hardship Order”).
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III. DISCUSSION
4. In the 2007 Financial Hardship Order, the Bureau found that extraordinary financial 
hardships present good cause for limited waiver of the integration ban.11 In three separate orders,12 the 
Bureau has granted James Cable waiver of Section 76.1204(a)(1) of the Commission’s rules until June 23, 
2009 based on this precedent.13 In that series of orders granting waiver, the Bureau has encouraged the 
company to take steps to come into compliance with the integration ban, and committed to “work with 
Petitioner, [the Consumer Electronics Association], and set-top box manufacturers over the coming 
months to explore ways to bring these systems into compliance, consistent with their financial 
condition.”14 Nearly a year ago, James Cable filed a plan for compliance with the integration ban,15 but 
has subsequently filed information that indicates its financial condition has weakened in the months since 
the release of the July 2008 Financial Hardship Order.16 In light of the further deterioration of 
Petitioner’s financial condition, we conclude that a limited extension of waiver is justified under Sections 
1.3 and 76.7 of the Commission’s rules.  
5. On April 20, 2009, James Cable submitted updated financial information to demonstrate 
that it still remains in poor financial condition.17 In order to demonstrate its financial condition, James 
Cable submitted a Cash Flow Statement to demonstrate its negative cash flows for 2008, indicating that 
the company is spending more cash than it is earning.  James Cable’s Cash Flow Statement reveals that 
the company has invested more money in service and customer retention than it has received from 
operations and financing.18 Its cash flow from financing has increased dramatically in 2008 compared to 
2007, which illustrates that James Cable is even further in debt than it was in 2007.19
6. We have concluded that speculative claims that the integration ban may impose a 
financial burden on cable companies are not persuasive.20 As explained in the July 2008 Financial 
Hardship Order, however, James Cable has made a specific and unambiguous showing of extraordinary 
financial hardship, which the Bureau has found presents good cause for waiver of the integration ban 
rule.21 Furthermore, James Cable has demonstrated that the costs associated with the integration ban’s 
imposition continue to impose an undue hardship on financially distressed cable operators such as the 
  
11 2007 Financial Hardship Order, 22 FCC Rcd 13426-7, ¶¶ 39-40.
12 2007 Financial Hardship Order, 22 FCC Rcd 13426-7, ¶¶ 39-40; July 2008 Financial Hardship Order, 23 FCC 
Rcd at 10594-6, ¶¶ 4-9; James Cable, LLC Request for Waiver of Section 76.1204(a)(1) of the Commission’s Rules, 
24 FCC Rcd 2439, 2442, ¶ 6 (2009).
13 July 2008 Financial Hardship Order, 23 FCC Rcd at 10594-6, ¶¶ 4-9.
14 Id. at 10596, ¶ 9.
15 While the petitioner filed a plan to comply with the integration ban after January 31, 2009, the plan relied on 
extraordinary steps.  See James Cable Petition at 8.
16 James Cable’s Report of Updated Financial Information at Exhibit 1 (filed April 20, 2009).
17 Id.
18 Id.
19 Id.
20 See Comcast Corporation’s Request for Waiver of 47 C.F.R. § 76.1204(a)(1), CSR-7012-Z, CS Docket No. 97-80 
at 17-19 (April 19, 2006) (asserting that that the increased costs associated with the integration ban would slow 
Comcast’s transitions to all-digital platforms).
21 July 2008 Financial Hardship Order, 23 FCC Rcd at 10594-6, ¶¶ 4-9.
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Petitioner.22 Accordingly, we conclude that a limited waiver of the integration ban until July 1, 2010 
would be in the public interest, and that James Cable has met the standard for waiver under Sections 1.3 
and 76.7 of the Commission’s rules.  
IV. ORDERING CLAUSES
7. Accordingly, IT IS ORDERED that, pursuant to Sections 1.3 and 76.7 of the 
Commission’s rules, 47 C.F.R. §§ 1.3 & 76.7, waiver of Section 76.1204(a)(1) of the Commission’s rules, 
47 C.F.R. § 76.1204(a)(1), IS GRANTED to James Cable, LLC until July 1, 2010.
8. This action is taken pursuant to authority delegated by Section 0.283 of the 
Commission’s rules, 47 C.F.R. § 0.283.
FEDERAL COMMUNICATIONS COMMISSION
Robert H. Ratcliffe
Acting Chief, Media Bureau
  
22 Letter from Paul Hudson, Counsel, James Cable, LLC, to Marlene H. Dortch, Secretary, Federal Communications 
Commission at Exhibit 1 (January 23, 2009).