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 Federal  Communications  Commission  DA  01-  2475 
 Before  the 
 Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of: 
 Waitsfield  Cable  Company 
 Petition  for  Waiver  of  Section  76.630(  a) 
 Basic  Tier  Scrambling 


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 CSR  4394-  Z 


 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  October  23,  2001  Released:  October  25,  2001 
 By  the  Chief,  Cable  Services  Bureau: 
 I.  INTRODUCTION 
 1.  In  the  above-  captioned  proceeding,  Waitsfield  Cable  Company  (  Waitsfield),  filed  a 
 petition  for  special  relief  requesting  waiver  of  Section  76.630(  a)  of  the  Commissions  rules.  1  Section 
 76.630(  a)  provides  that  "[  c]  able  systems  shall  not  scramble  or  otherwise  encrypt  signals  carried  on  the 
 basic  service  tier.  2  The  instant  waiver  request  is  based  upon  petitioner's  contentions  that  its  computer-controlled 
 system  serves  a  resort  area  with  a  large  percentage  of  transient  subscribers  and  that,  without 
 scrambling  of  the  basic  service  tier,  subscribers  would  incur  increased  costs  and  inconvenience. 
 Waitsfields  petition  is  unopposed.  For  the  reasons  discussed  below,  Waitsfields  petition  is  granted. 


 II.  BACKGROUND 
 2.  In  the  Cable  Television  Consumer  Protection  and  Competition  Act  of  1992  (  1992  Cable 
 Act),  Congress  recognized  that  compatibility  problems  between  cable  service  and  consumer  electronics 
 equipment  were  limiting  and/  or  precluding  the  operation  of  premium  features  of  consumer  equipment  and 
 were  affecting  the  ability  of  consumer  equipment  to  receive  cable  programming.  3  Section  624A  of  the 
 Communications  Act  of  1934,  as  amended  (  the  Act),  Consumer  Electronics  Equipment  Compatibility, 
 was  added  by  Section  17  of  the  1992  Cable  Act.  4  Section  624A  required  the  Commission  to  issue 
 regulations  to  assure  compatibility  between  consumer  electronics  equipment  and  cable  systems. 


 3.  In  Implementation  of  Section  17  of  the  Cable  Television  Consumer  Protection  and 
 Competition  Act  of  1992    Compatibility  Between  Cable  Systems  and  Consumer  Electronics  Equipment, 
 the  Commission  implemented  the  requirements  of  Section  624A.  5  Section  76.630(  a)  requires  that  cable 


 1  Waitsfield  also  filed  two  supplements  to  its  petition,  dated  August  21  and  30,  2001. 


 2  47  C.  F.  R.    76.630(  a). 
 3  Pub.  L.  No.  102-  385,  106  Stat.  1460  (1992). 
 4  47  U.  S.  C.    624A. 
 5  9  FCC  Rcd  1981  (1994)  (  Compatibility  Report  and  Order). 
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 operators  refrain  from  scrambling  signals  carried  on  the  basic  tier  of  service.  6  The  Commission  determined 
 that  this  rule  would  significantly  advance  compatibility  by  ensuring  that  all  subscribers  are  able  to  receive 
 basic  tier  signals  in  the  clear  and  that  basic-  only  subscribers  with  cable-  ready  televisions  will  not  need 
 set-  top  devices.  7  Based  upon  the  Commissions  recognition  that  there  are  some  instances  in  which 
 operators  may  need  to  scramble  signals,  the  rule  provides  for  waivers  of  the  scrambling  prohibition  upon  a 
 showing  of  "either  a  substantial  problem  with  theft  of  basic  tier  service  or  a  strong  need  to  scramble  basic 
 signals  for  other  reasons."  8 


 III.  DISCUSSION 
 4.  Waitsfield  states  that  it  operates  a  computer-  controlled  addressable  cable  television  system 
 in  a  two-  season  resort  area  in  the  Green  Mountains  of  Vermont,  serving  approximately  3,000  subscribers.  9 
 The  system  is  configured  so  that  connection,  disconnection,  changes  of  tier  request  and  other  channel 
 modifications  may  be  accomplished  by  remote  entry  to  the  head-  end  control  computer  without  requiring  a 
 truck-  roll  to  the  subscribers  premises  by  a  service  technician.  10  Waitsfield  further  explains  that  without 
 scrambling  of  the  basic  tier,  the  system  would  not  be  able  to  disconnect  and  reconnect  subscribers  without 
 a  premises  visit.  Approximately  two-  thirds  of  the  bed  space  in  the  service  area  is  available  for  rental 
 during  either  the  winter  ski  season  or  the  summer  season  in  motels,  hotels,  inns,  and  condominiums,  or  in 
 single  family  homes  which  may  rent  out  as  a  single  unit  or  as  individual  rooms  within  the  home.  Waitsfield 
 contends  that  without  scrambling  of  the  basic  tier,  it  will  lose  the  ability  to  connect  or  upgrade  service  to 
 the  large  numbers  of  daily,  weekend,  or  weekly  subscribers  who  require  immediate  connection.  11 
 Waitsfield  states  that  it  experiences  a  disconnection  and  reconnection  rate  of  more  than  40%  of  its 
 subscriber  base  in  a  yearly  period,  12  and  that  encryption  allows  the  operator  to  change  service  without 
 billing  its  subscribers  for  service  visits.  Waitsfield  asserts  that  these  fees  would  exceed  $125,000  annually.  13  In  addition,  Waitsfield  contends  that  without  scrambling  of  the  basic  service,  the  additional 


 truck  rolls  will  require  the  hiring  of  additional  technicians,  thereby  further  increasing  costs  to  the  cable 
 operator  and  ultimately  to  subscribers.  14 


 5.  We  find  that  Waitsfields  contentions  regarding  the  cost  and  potential  inconvenience  to  a 
 small  and  transient  subscriber  base  justify  the  requested  waiver.  The  large  percentage  of  seasonal  rental 
 properties  in  the  area,  which  may  be  occupied  for  as  little  as  one  night,  require  the  operator  to  have  the 
 flexibility  to  connect  and  reconnect  subscribers  without  costly  and  potentially  inconvenient  truck  rolls. 


 6  47  C.  F.  R.    76.630(  a). 
 7  Compatibility  Report  and  Order,  9  FCC  Rcd  at  1991. 
 8  47  C.  F.  R.    76.630(  a). 
 9  Petition  at  1. 
 10  Id. 
 11  Id. 
 12  Id.  at  2. 
 13  August  21,  2001  Supplement  at  2. 
 14  Petition  at  2. 
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 IV.  ORDERING  CLAUSES 
 6.  Accordingly,  IT  IS  ORDERED  that  the  petition  filed  by  Waitsfield  Cable  Company 
 requesting  a  waiver  of  the  Commissions  rules  prohibiting  scrambling  of  channels  on  the  basic  service  tier 
 IS  GRANTED. 


 7.  This  action  is  taken  pursuant  to  delegated  authority  by  Section  0.321  of  the  Commission's 
 rules.  15 


 FEDERAL  COMMUNICATIONS  COMMISSION 


 W.  Kenneth  Ferree 
 Chief,  Cable  Services  Bureau 


 15  47  C.  F.  R.  0.321. 
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