Comcast loses appeal of FCC TV set-top rule

The cable industry has long opposed the rule, which is intended to create competition in the digital video box market. The rule required cable companies to develop security cards that allow subscribers access to digital video signals.

That allows consumers to purchase their own set-top boxes from retailers and use the cards to access video programming from different providers.

Under the rule, which was first issued in 1998 and modified in 2005, cable companies were required to provide boxes with separate security cards by July 1, 2007.

Comcast asked the Federal Communications Commission in 2006 to waive the rule for three of its cheapest set-top models, but the request was denied last year. The company appealed the decision to the U.S. Court of Appeals for the District of Columbia Circuit, which upheld the FCC.

While the court said the rule may impose higher costs on cable companies because the boxes with security cards are more expensive, the FCC has "reasonably explained" why those costs are "likely to be outweighed by the long-run benefits" of greater competition in the equipment market.

Sena Fitzmaurice, a spokeswoman for Comcast, said the cheaper models cost Comcast $50 to $70, half the price of the boxes mandated by the FCC.

The FCC's rule isn't related to the converter boxes that analog televisions will need after the digital television transition next year.

"While we are disappointed in this decision, we will continue to actively deploy digital services to our consumers," Fitzmaurice said. "Our only interest has been to facilitate and accelerate the digital transition for our customers in the most cost effective fashion."

The company has complied with the FCC's mandate since last July, Fitzmaurice said.