STATEMENT OF
CHAIRMAN JULIUS GENACHOWSKI
Re: Implementation of Section 304 of the Telecommunications Act of 1996: Commercial 
Availability of Navigation Devices, CS Docket No. 97-80, Compatibility Between Cable 
Systems and Consumer Electronics Equipment, PP Docket No. 00-67.
In this order, we take concrete steps to boost competition in the retail market for cable 
set-top boxes and benefit consumers of pay TV services.  
We’re under a congressional directive to spur competition in this market, and the 
Commission previously selected the CableCARD as its main vehicle to do so.  But under our 
existing rules, it’s been more difficult for consumers to use set-top boxes bought at retail than to 
use boxes leased from the cable operator.  And indeed only a tiny fraction of cable subscribers 
have chosen to buy a set-top box.  Consumers who buy a set-top box often find it difficult and 
time-consuming to get a cableCARD installed in the device, while leased boxes come with the 
cableCARD preinstalled.  
There is also poor pricing transparency of cableCARDs because the cost of the card is 
often bundled with other equipment and service fees.  As a result, consumers often don’t know 
what cableCARDs cost -- making it difficult to make an informed decision whether to buy or 
lease a box.  Consumers have no assurance that their monthly cable bill will be reduced if they 
buy rather than lease a box.  And consumers who surmount all of these hurdles and buy a box 
anyway may find, to their dismay, that they can’t access all channels if their cable operator 
converts to an all-digital system.  
So, as the National Broadband Plan recognized, the current CableCARD approach isn’t 
working.  Today we take steps to improve it.  The rules we adopt today require comparable 
treatment of retail and leased devices.  They will also ensure that consumers who buy set-top 
boxes get the equipment credit and services to which they are entitled, creating a level playing 
field.  We’re also streamlining the process for getting set-top boxes to market by eliminating 
unnecessary delays and costs associated with set-top box testing and certification.    
We hope and expect that these steps will lead to greater innovation and consumer choice 
and lower prices in consumer equipment. 
Our ultimate goal in this area is to unleash maximum innovation through the TV.  We’ve 
seen significantly less innovation – fewer new devices, applications and services -- on the digital 
TV platform than on the computer or mobile platforms.  Greater innovation can not only drive 
job creation and economic growth, it can help boost broadband adoption, since TVs are in over 
90% of people’s homes, while computers are in about 76%.  
A key element of unleashing innovation through the TV is increased interoperability 
between a consumer’s pay-TV programming stream and the consumer’s broadband stream of 
data – so that innovators can design applications that integrate pay-TV programming and other 
Internet content.   As the National Broadband Plan described, this could be made possible by a 
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gateway device to the consumer’s home that would preserve the integrity of the pay stream, 
while spurring greater innovation around it in new devices and services. 
Our work on the National Broadband Plan suggests that gateway devices and 
interoperability are keys to unleashing competition and innovation in the retail market with all of 
the attendant benefits of enhanced consumer choice, increased broadband investment, and 
greater economic growth.  
We’re of course cognizant of new developments linking the TV and Internet, and will 
study those as part of our process to determine how we can most effectively spur innovation in 
this important market.  
Today’s adoption of improvements to the CableCARD regime is an important step 
toward the goal of increased competition and customer choice for TV set-top boxes.
I thank the staff for their excellent work on this item.