Lawyers Still Sussing Out Effects of D.C. Circuit Ruling Tossing 2003 Plug-and-Play Order
Industry and FCC attorneys are still figuring out how a D.C. Circuit ruling last week that overturned a commission order on cable set-top boxes will affect industry and policy, industry attorneys said. In granting Dish Network’s challenge (CD Jan 17 p12), a panel of three judges threw out the FCC’s 2003 plug-and-play order, saying the commission lacked ancillary authority to require certain encoding practices by satellite TV providers. The 2003 order laid out several technical CableCARD rules and encoding requirements, and was one of a series of three CableCARD orders the commission has adopted since 1998. The other two were untouched by the court. Lawyers we spoke to had a variety of views about how the decision fits with other judicial tests of FCC authority and how it affects industry obligations under FCC’s remaining CableCARD rules.
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The case, which stemmed from a 2002 Memorandum of Understanding (MOU) among cable operators, programmers and consumer electronics manufacturers that was largely adopted by the FCC, is so idiosyncratic it defies attempts to generalize it, a cable attorney said. “There are about six or seven points of divergence from just about any case you are likely to see,” the attorney said. “It is a bad case to generalize from. ... It is going to have a lot of consequences, but as far as what it means from a judicial review of the FCC standpoint, I don’t think it’s a very good touchstone."
Still, it’s hard not to read a preview of the D.C. Circuit’s review of the FCC’s open Internet rules into the decision, said Randolph May, president of the Free State Foundation. “There were certain sentences of that opinion that if I didn’t know better, I would have thought they were being written with the Commission’s net neutrality order that’s on appeal in mind,” he said.
The decision does raise questions about which FCC CableCARD rules are still effective, including a 2010 CableCARD order, wrote Davis Wright attorney Paul Glist in a client advisory (http://xrl.us/bobdwc). “By vacating the Plug and Play order, the court also vacated a large number of rules governing labeling, testing, support and output,” he wrote. The 2010 order “applied additional rules to MVPDs that are subject to the (now vacated) Plug and Play rule,” such as home networking output, self installation, multistream-CableCARD and switched digital video rules, he wrote.
By tossing some CableCARD rules, the decision may prompt a renewed push to get the FCC to adopt AllVid rules, said John Bergmayer, a staff attorney with Public Knowledge. “I think there’s a potential for a bigger push for a more comprehensive solution because we're just sort of creaking along with the current regime,” he said. May drew an opposite conclusion. “What I take away from the decision is it’s time for the commission to sunset these regulations and shut down its AllVid navigation device inquiry and just understand that the marketplace ... has already outrun the need for regulation,” he said.
Meanwhile, the FCC will probably seek a rehearing at the D.C. Circuit, the cable attorney said. The FCC is carefully reviewing the court’s opinion, an agency official said. Moreover, the underlying MOU allows for the parties to walk away if the effective rules differ from the agreement, the attorney said. “With this ruling, the rules are no longer what’s agreed,” the attorney said. That could free the various industries to dissolve the MOU, allowing programmers to change the way they encode programming and potentially prevent the ability of digital video recorders to copy telecasts, the attorney said.