WASHINGTON Comcast Corp (CMCSA.O) 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.
However, Comcast's argument got a lukewarm response from at least one of the three judges.
Judge Laurence Silberman questioned whether the court was required to defer to the FCC's judgment on the specifics of determining which waiver requests should be granted.
Silberman also said he was sympathetic to an argument made by the FCC's lawyer, who told the judges that Comcast should have asked the agency to revoke the waivers granted to the other cable operators.
The judges gave no indication how soon they would rule in the case.
The new FCC rule was issued to create a more open retail market for more cable-ready televisions and set-top boxes. The security feature had previously been built into cable set-top boxes, requiring most cable viewers to rent or buy the boxes from their cable providers.
(Reporting by Peter Kaplan; editing by Gerald E. McCormick)