Comcast asks court to reverse FCC set-top box rule

By Peter Kaplan

WASHINGTON (Reuters) - Comcast Corp (CMCSA.O: Quote, Profile, Research, Stock Buzz) urged a U.S. appeals court on Tuesday to overturn a decision by federal regulators, who refused to a waive a rule designed to open up the market for cable TV set-top boxes.

At issue is an Federal Communications Commission rule that went into effect last July. It required Comcast and other operators to separate the security function in cable TV from set-top boxes provided by operators -- allowing viewers to buy or rent set-top boxes from other manufacturers.

A lawyer for Comcast told a panel of three judges with the U.S. Court of Appeals for the District of Columbia that the FCC was wrong in denying Comcast's request for a waiver from the new rule.

The FCC decision singled out Comcast for rejection while the agency granted waivers to some other multichannel television providers, Comcast lawyer David Murray said.

"We're left out in the cold. And it's not a fair result. It's not a logical result," Murray said at the hearing.

The FCC's decision is also unfair because the agency had offered to waive the rule for Comcast if the company agreed to let customers buy cable channels individually, he said. That unrelated a la carte programming concession has been long sought by FCC Kevin Martin as a way of allowing customers to pay for and receive only the channels they want.

In asking the FCC for a waiver, Comcast said it wanted to continue selling entry level set-top boxes that do not have cable card slots as an easier way of preparing customers for switching television delivery to a digital signal from analog in early 2009.

Comcast also offers more advanced set-top boxes with card slots, such as for high-definition digital video recorders.