Federal Communications Commission DA 08-1575
1
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Puerto Rico Cable Acquisition Corp. d/b/a Choice
Cable T.V.
Requests for Waiver of Section 76.1204(a)(1) of 
the Commission’s Rules
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CSR-7201-Z
MEMORANDUM OPINION AND ORDER
Adopted:  July 1, 2008 Released:  July 1, 2008
By the Chief, Media Bureau:
I. INTRODUCTION
1. Puerto Rico Cable Acquisition Corp. d/b/a Choice Cable T.V. (“Choice”) seeks waiver of the 
ban on integrated set-top boxes set forth in Section 76.1204(a)(1) of the Commission’s rules1 to allow it to 
place into service integrated digital cable set-top boxes.  The Bureau has already granted Choice a limited 
waiver of the ban on integrated set-top boxes for certain set-top box models,2 finding that the fact that 
Choice transitioned to an all-digital system demonstrated good cause for such a waiver under Sections 1.3 
and 76.7 of the Commission’s rules.3 As set forth below, we grant Choice’s request for a waiver of 
Section 76.1204(a)(1) of the Commission’s rules.
II. BACKGROUND
2. Congress directed the Commission to adopt regulations to assure the commercial 
availability of navigation devices more than ten years ago as part of the Telecommunications Act of 
1996.4 The Commission implemented this directive in 1998 through the adoption of the “integration 
  
1 47 C.F.R. § 76.1204(a)(1). 
2 Consolidated Requests for Waiver of Section 76.1204(a)(1) of the Commission's Rules, 22 FCC Rcd 11780 (2007) 
(“Choice Order”); Guam Cablevision Request for Waiver of Section 76.1204(a)(1) of the Commission's Rules, LLC, 
22 FCC Rcd 11747 (2007) (“GCL Order”).
3 See 47 C.F.R. §§ 1.3, 76.7; Choice Order, 22 FCC Rcd at 11803-11804, ¶¶ 60-61; GCL Order, 22 FCC Rcd at 
11752, ¶¶ 13-14.  
4 See Section 629(a) of the Communications Act of 1934, as amended, 47 U.S.C. § 549(a) (requiring the FCC “to 
adopt regulations to assure the commercial availability, to consumers of multichannel video programming and other 
services offered over multichannel video programming systems, of converter boxes, interactive communications 
equipment, and other equipment used by consumers to access multichannel video programming and other services 
offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not 
affiliated with any multichannel video programming distributor”); see also Telecommunications Act of 1996, Pub. 
L. No. 104-104, § 304, 110 Stat. 56, 125-126 (1996).
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ban,” which established a date after which cable operators no longer may place into service new 
navigation devices (e.g., set-top boxes) that perform both conditional access and other functions in a 
single integrated device.5 Originally, the Commission established January 1, 2005 as the deadline for 
compliance with the integration ban.6 On two occasions, the National Cable and Telecommunications 
Association (“NCTA”), on behalf of all cable operators, sought – and obtained – extensions of that 
deadline.7 The Commission ultimately fixed July 1, 2007 as the deadline in order to afford cable 
operators additional time to determine the feasibility of developing a downloadable security function that 
would permit compliance with the Commission’s rules without incurring the cable operator and consumer 
costs associated with the separation of hardware.8
3. The purpose of the integration ban is to assure reliance by both cable operators and 
consumer electronics manufacturers on a common separated security solution.9 This “common reliance” 
is necessary to achieve the broader goal of Section 629 – i.e., to allow consumers the option of purchasing 
navigation devices from sources other than their MVPD.10 Although the cable industry has challenged 
the lawfulness of the integration ban on three separate occasions, in each of those cases the D.C. Circuit 
  
5 See Implementation of Section 304 of the Telecommunications Act of 1996:  Commercial Availability of Navigation 
Devices, 13 FCC Rcd 14775, 14803, ¶ 69 (1998) (“First Report and Order”) (adopting Section 76.1204 of the 
Commission’s rules, subsection (a)(1) of which (1) required multichannel video programming distributors 
(“MVPDs”) to make available by July 1, 2000 a security element separate from the basic navigation device (i.e., the 
CableCARD), and, in its original form, (2) prohibited MVPDs covered by this subsection from “plac[ing] in service 
new navigation devices … that perform both conditional access and other functions in a single integrated device” 
after January 1, 2005); see also 47 C.F.R. § 76.1204(a)(1) (1998).  
6 First Report and Order, 13 FCC Rcd at 14803, ¶ 69.
7 In April 2003, the Commission extended the effective date of the integration ban until July 1, 2006.  See 
Implementation of Section 304 of the Telecommunications Act of 1996:  Commercial Availability of Navigation 
Devices, 18 FCC Rcd 7924, 7926, ¶ 4 (2003) (“Extension Order”).  Then, in 2005, the Commission further extended 
that date until July 1, 2007.  See Implementation of Section 304 of the Telecommunications Act of 1996:  
Commercial Availability of Navigation Devices, 20 FCC Rcd 6794, 6810, ¶ 31 (“2005 Deferral Order”).
8 2005 Deferral Order, 20 FCC Rcd at 6810, ¶ 31.
9 See Choice Order, 22 FCC Rcd at 11781-82, ¶ 3.  See also Cablevision Systems Corporation’s Request for Waiver 
of Section 76.1204(a)(1) of the Commission’s Rules, 22 FCC Rcd 220, 226, ¶ 19 (2007) (citing the 2005 Deferral 
Order, 20 FCC Rcd at 6809, ¶ 30) (explaining why the Commission “require[d] MVPDs and consumer electronics 
manufacturers to rely upon identical separated security with regard to hardware-based conditional access 
solutions”).
10 See S. REP. 104-230, at 181 (1996) (Conf. Rep.).  See also Bellsouth Interactive Media Services, LLC, 19 FCC 
Rcd 15607, 15608, ¶ 2 (2004).  As the Bureau noted, Congress characterized the transition to competition in 
navigation devices as an important goal, stating that “[c]ompetition in the manufacturing and distribution of 
consumer devices has always led to innovation, lower prices and higher quality.”  Choice Order, 22 FCC Rcd at 
11781, ¶ 2 (citing H.R. REP. NO. 104-204, at 112 (1995)).
Federal Communications Commission DA 08-1575
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denied those petitions.11 In limited circumstances, however, operators may be eligible for waiver of the 
integration ban.12
III. DISCUSSION
4. Choice asserts that it should be afforded a waiver for all set-top boxes based on the “unique 
market conditions in rural Puerto Rico.”13 Choice argues that CableCARD devices are not available at 
retail in its service area, the most rural portions of Puerto Rico.14 Moreover, Choice states that it was only 
able to locate two CableCARD device models 100 miles outside of its service area at a CompUSA store, 
but all CompUSA stores in Puerto Rico have subsequently closed.15 Choice also argues that its customers 
cannot afford to lease CableCARD-equipped high definition (“HD”) and digital video recorder (“DVR”) 
set-top boxes, as the median yearly income in Choice’s service area is less than $13,00016 and the price of 
CableCARD high definition televisions on the mainland generally remains $1500 and $6000.17  
Accordingly, the company has not ordered any CableCARD-equipped HD or DVR devices because it 
claims that those devices are prohibitively costly for Choice’s subscribers.18 Furthermore, Choice argues 
that its competitors offer little, if any, competitive HD service.19 Therefore, it asserts that denial of 
Choice’s request for waiver of the integration ban, “would mean that cable customers in Choice’s service 
area would not be able to obtain HD/DVR functionality at all,”20 which it claims distinguishes the Puerto 
Rican market from other markets in the United States where it asserts that CableCARD devices are freely 
available from retail outlets, customers are better able to afford them given the higher median household 
income, and competitive high definition service is available from multichannel video programming 
  
11 Comcast Corp. v. FCC, 526 F.3d 763 (D.C. Cir. 2008); Charter Comm., Inc. v. FCC, 460 F.3d 31 (D.C. Cir. 
2006); General Instrument Corp. v. FCC, 213 F.3d 724 (D.C. Cir. 2000).  The Commission argued, and the D.C. 
Circuit agreed, that the integration ban was a reasonable means to meet Section 629’s directive.  Charter Comm., 
Inc. v. FCC, 460 F.3d 31, 41 (D.C. Cir. 2006) (“this court is bound to defer to the FCC's predictive judgment that, 
‘[a]bsent common reliance on an identical security function, we do not foresee the market developing in a manner 
consistent with our statutory obligation.’”). 
12 For example, Section 629(c) provides that the Commission shall grant a waiver of its regulations implementing 
Section 629(a) upon an appropriate showing that such waiver is necessary to assist the development or introduction 
of new or improved services.  47 U.S.C § 549(c). Furthermore, petitioners who have shown good cause have 
received waivers of the integration ban pursuant to Sections 1.3 and 76.7 of the Commission’s rules.  See, e.g., 
Choice Order, 22 FCC Rcd at 11803-11804, ¶¶ 60-61.
13 Choice Waiver Request at 5 (filed June 23, 2008).
14 Id. at 3-4.
15 Id. at 4.
16 Id. at 2.
17 Letter from Miguel Reyes Dávila, Esq., President, Puerto Rico Telecommunications Regulatory Board, to Kevin 
Martin, Chairman, Federal Communications Commission at 1-2 (June 4, 2008).
18 Id.
19 Id. at 3.  Choice indicates that it has ceased offering HD and DVR service to new subscribers, and has stopped 
adding new HD programming.  Id. at 2.  Choice further asserts that grant of its waiver request is necessary to 
achieve its goal of doubling its HD channel offering by February 2009.  Id. at 1, n. 3.
20 Id. at 3.
Federal Communications Commission DA 08-1575
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service competitors.21 Choice argues that these differences demonstrate that the wholly different retail 
market in Puerto Rico justifies a temporary waiver of the integration ban rules.22
5. We are persuaded that Choice has established that it faces an idiosyncratic factual situation 
in its service area.  In particular, the facts recounted above indicate that rural Puerto Rico’s retail market 
for navigation devices is unlike nearly every other market in the continental United States,23 and Choice 
supports its arguments that the rural Puerto Rico market is wholly different from the United States market 
with compelling evidence and testimony.24 As a result, we conclude that compliance with the integration 
ban is unlikely to produce the same benefits in rural Puerto Rico as in the rest of the United States and 
that the balance of equities here therefore tilts in favor of Choice’s request.  Accordingly, we find good 
cause to grant Choice’s request for waiver.
IV. ORDERING CLAUSE
6. Accordingly, IT IS ORDERED that, pursuant to Sections 1.3 and 76.7 of the 
Commission’s rules, 47 C.F.R. §§ 1.3, 76.7, a waiver of Section 76.1204(a)(1) of the Commission’s rules, 
47 C.F.R. § 76.1204(a)(1) IS GRANTED to Puerto Rico Cable Acquisition Corp. d/b/a Choice Cable T.V.
for a temporary period of three years from the date of this Order.
FEDERAL COMMUNICATIONS COMMISSION
Monica Shah Desai
Chief, Media Bureau
  
21 Id. at 5-6.
22 Id.  
23 Choice Waiver Request at 5-6 (citing Millennium Telcom, LLC d/b/a OneSource Communications Emergency 
Petition for Waiver, 22 FCC Rcd 8567 (2007)).
24 See, e.g., Letter from Congressman Luis Fortuño to Kevin Martin, Chairman, Federal Communications 
Commission (December 11, 2007); Letter from Mercedes Rodríguez Rodríguez, President, Cámara de Comercio del 
Sur de Puerto Ríco to Kevin Martin, Chairman, Federal Communications Commission (April 24, 2008); Letter from 
Miguel Reyes Dávila, Esq., President, Puerto Rico Telecommunications Regulatory Board, to Kevin Martin, 
Chairman, Federal Communications Commission at 1-2 (June 4, 2008).