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Media Bureau Grants Echostar's Waiver Request

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Released: September 30, 2013

Federal Communications Commission

DA 13-2010

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
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)
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EchoStar Technologies L.L.C.
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MB Docket No. 13-177
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Petition for Waiver of Section 15.117(b)
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of the Commission's Rules
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)
)

MEMORANDUM OPINION AND ORDER

Adopted: September 30, 2013

Released: September 30, 2013

By the Chief, Media Bureau:

I.

INTRODUCTION

1.
In this Order, we grant EchoStar Technologies L.L.C.'s ("EchoStar") unopposed request
for waiver of the Federal Communications Commission's ("Commission") analog broadcast tuner
requirements to allow EchoStar to import, market, and sell two models of the Channel Master K77
("Channel Master devices"), a high-definition ("HD"), Internet-enabled, over-the-air digital video
recorder ("DVR") that does not include an analog broadcast tuner.1 We waive the requirement that the
Channel Master devices must "be capable of adequately receiving all channels allocated by the
Commission to the television broadcast service," as required by Section 15.117(b) of the Commission's
rules.2 We conclude that the waiver is in the public interest because it will enhance consumer choice for
retail equipment, offer consumers an additional way to access video programming, and reduce the cost
and power consumption of the Channel Master devices. To avoid possible confusion about the devices'
capabilities and limitations regarding the reception of over-the-air analog signals, we condition this

1 EchoStar Petition at 1. EchoStar seeks a waiver for two variants of the K77 device. Model CM-7500GB16 is
Flash memory-based with 16 gigabytes ("GB") of memory, but no internal hard drive. DVR capability can be added
through the attachment of an external USB hard drive. Model CM-7500TB1 includes a 1 terabyte ("TB") hard
drive. See EchoStar Petition at 2, n.2; Letter from Neil A. Chilson, Counsel to EchoStar, to Marlene H. Dortch,
Secretary, FCC, at 1, n.2 (Aug. 15, 2013) ("EchoStar/Channel Master Ex Parte").
2 See 47 C.F.R. 15.117(b). Pursuant to this provision, TV broadcast receivers must currently be capable of
receiving both analog and digital broadcast signals. This Order grants a waiver of the National Television System
Committee ("NTSC") analog broadcasting standard, which low-power, Class A, and translator over-the-air stations
(collectively, "low power television stations") that have not already gone all-digital are permitted to use until
September 1, 2015, the date set for the termination of all analog low power television service and the completion of
the digital transition. Digital broadcasters use the Advanced Television Systems Committee ("ATSC") broadcasting
standard.

Federal Communications Commission

DA 13-2010

waiver on EchoStar's voluntary commitment to a campaign to educate consumers and retailers on the
capabilities and limitations of the Channel Master devices.3

II.

BACKGROUND

2.
The All Channel Receiver Act of 1962 grants the Commission the "authority to require
that apparatus designed to receive television pictures broadcast simultaneously with sound be capable of
adequately receiving all frequencies allocated by the Commission to television broadcasting when such
apparatus is shipped in interstate commerce, or is imported from any foreign country into the United
States, for sale or resale to the public."4 The Commission first exercised this authority in 1962 by
adopting Section 15.70(a) of the Commission's rules.5 The successor to this rule, now codified at Section
15.117(b), states that "TV broadcast receivers shall be capable of adequately receiving all channels
allocated by the Commission to the television broadcast service."6 A "TV broadcast receiver" is defined
as a "device designed to receive television pictures that are broadcast simultaneously with sound on the
television channels authorized under part 73 of this chapter."7 For purposes of this rule, the term "TV
broadcast receivers" includes "devices, such as TV interface devices and set-top devices that are intended
to provide audio-video signals to a video monitor, that incorporate the tuner portion of a TV broadcast
receiver and that are equipped with an antenna or antenna terminals that can be used for off-the-air
reception of TV broadcast signals, as authorized under part 73 of this chapter."8 The purpose of this rule
was to ensure that television broadcast receivers receive all television broadcast channels irrespective of

3 Infra, 8.
4 47 U.S.C. 303(s); the All Channel Receiver Act of 1962, Pub. L. No. 87-529, 76 Stat. 150. See also S. Rep.
1526, 87th Cong., 2nd Sess. 1962 reprinted at 1962 U.S.C.C.A.N. 1873, 1875 (discussing "the relative scarcity of
television receivers in the United States which are capable of receiving the signals of UHF stations" (only about
16%), which "prevents effective competition between UHF and VHF stations which operate in the same market").
5 All-Channel Television Broadcast Receivers, 27 Fed. Reg. 11,698, 11,700 (Nov. 28, 1962); 47 C.F.R. 15.70(a)
(1962) (current version at 47 C.F.R. 15.117(b)) ("[a]ll television broadcast receivers manufactured after April 30,
1964, and shipped in interstate commerce or imported from any country into the United States, for sale or resale to
the public, shall be capable of adequately receiving all channels allocated by the Commission to the television
broadcast service.").
6 See Revision of Part 15 of the Rules regarding the operation of radio frequency devices without an individual
license
, 4 FCC Rcd 3493, 3517, 139 (1989) (adopting 47 C.F.R. 15.117(b)). A previous Commission statement
could be interpreted to reflect some flexibility with respect to the application of this rule. See Advanced Television
Systems And Their Impact Upon The Existing Television Broadcast Service
, Fifth Report and Order, 12 FCC Rcd
12809, 12855-6 (1997) ("We do not believe that our goals would be advanced by mandating that all digital receivers
receive and display NTSC signals and DTV signals, regardless of format, aspect ratio, or progressive or interlaced
scanning, as broadcasters argue. We expect that equipment manufacturers will make available to consumers digital
receivers that receive both NTSC and DTV signals. However, we will not preclude equipment manufacturers from
designing digital receivers that do not receive NTSC signals."). However, on its face, Section 15.117(b) of the rules
requires a television broadcast receiver to be able to receive "all channels allocated by the Commission to the
television broadcast service." 47 C.F.R. 15.117(b); see also Office of Engineering and Technology Laboratory
Division Knowledge Database (available at
https://apps.fcc.gov/oetcf/kdb/forms/FTSSearchResultPage.cfm?switch=P&id=42863), Publication Number 218634
(rel. Dec. 17, 2009) (confirming Section 15.117(b)'s dual ATSC/NTSC tuner requirement).
7 47 C.F.R. 15.3(w).
8 47 C.F.R. 15.117(a).
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DA 13-2010

the channel's place in the broadcast spectrum.9
3.
On August 9, 2013, the Media Bureau granted TiVo Inc.'s unopposed request for waiver
of both the broadcast and cable analog tuner rules10 to allow it to sell digital video recorders ("DVRs")
that receive neither analog broadcast nor analog cable signals.11 With respect to the Section 15.117(b)
analog broadcast tuner requirement, the Bureau concluded that the waiver "will cause minimal
inconvenience and disruption to consumers" because consumers "may still rely on the analog tuning
functionality required to be in the television sets they already own to view analog low-power broadcast
stations.12 The Bureau also found that waiver of both of the analog tuner rules would reduce the devices'
retail cost and power consumption.13 The Bureau conditioned the waiver on TiVo's voluntary consumer
education campaign,14 which the Bureau concluded was necessary because "there remains a small subset
of consumers that will need to understand the limits" of these devices.15
4.
On June 21, 2013, EchoStar filed a request for waiver of Section 15.117(b) of the
Commission's rules with respect to its two Channel Master K77 devices, which it describes as non-
subscription boxes that combine digital HD broadcast television content, DVR functionality, and access
to over-the-top Internet streaming content.16 EchoStar has requested expedited treatment in order to make
these devices available at retail by fall 2013.17 To support its request, EchoStar argues that waiver would
"afford[ ] consumers access to an innovative, non-subscription, cost-effective device with the sleek size
and functionality they want."18 It argues that requiring the devices to include analog tuners would make
them more bulky, less energy efficient, more expensive, and thus less appealing to consumers.19 Finally,
it argues that waiver will have no negative impact on consumers because only low power television

9 All-Channel Television Broadcast Receivers, 27 Fed. Reg. 11,698 (Nov. 28, 1962). When the Commission
defined a TV broadcast receiver to include "TV interface devices and set-top devices that are intended to provide
audio-video signals to a video monitor," it was focused on whether those devices should include digital broadcast
receivers because of the impending DTV transition, rather than whether devices should include analog broadcast
receivers. See Review of the Commission's Rules and Policies Affecting the Conversion to Digital Television, 17
FCC Rcd 15978, 15995-15999, 39-46 (2002) ("Consistent with the intent of Congress that we not use our
authority under the ACRA to set broad standards for television receivers, we believe that the rules implementing the
DTV tuner requirements should avoid imposing new performance standards on DTV except as necessary to ensure
that receivers can adequately tune DTV signals on all of the television channels."). This context informs our
analysis of the public interest benefits below.
10 47 C.F.R. 15.117(b) (governing broadcast tuner requirements); 47 C.F.R. 15.118(b) (governing cable tuner
requirements).
11 See TiVo, Inc. Petition for Waiver of Sections 15.117(b), 15.118(b), 15.123(b)(1), 15.123(c), and 15.123(d) of the
Commission's Rules
, MB Docket No. 11-105, Memorandum Opinion and Order, DA 13-1740, 10 (rel. Aug. 9,
2013) ("2013 TiVo Waiver Order").
12 See 47 C.F.R. 15.3(w); 15.117(a), (b); 2013 TiVo Waiver Order, 8.
13 2013 TiVo Waiver Order, 6-7.
14 2013 TiVo Waiver Order 1, 9.
15 2013 TiVo Waiver Order 9.
16 EchoStar Petition at 2.
17 EchoStar Petition at 9.
18 EchoStar Petition at 3-4.
19 EchoStar Petition at 6.
3

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DA 13-2010

stations are currently permitted to broadcast in analog format, that even most low power television
stations are already broadcasting in digital, and that all low power television stations must transition to
digital by September 1, 2015.20 EchoStar emphasizes that consumers who want to receive analog signals
will continue to be able to do so via their televisions.21 EchoStar voluntarily made several consumer
education commitments to ensure that consumers and retailers are aware of the devices' capabilities and
limitations.22 On July 10, 2013, the Media Bureau released a Public Notice seeking comment on
EchoStar's request for waiver. Several parties filed in support of the waiver and no parties opposed
EchoStar's request.23

III.

DISCUSSION

5.
We find good cause to grant EchoStar's request for waiver, subject to EchoStar's
voluntary commitment to implement a consumer and retailer education campaign about the capabilities
and limitations of the Channel Master devices.24 EchoStar presents specific benefits to support its waiver
request, including promoting competition for retail devices, cost savings, and energy efficiency.
6.
EchoStar states that the Channel Master devices have been designed to respond to
consumer demand for a cost-efficient DVR that combines over-the-air and over-the-top functionality.25
EchoStar argues that requiring the Channel Master devices to include an analog tuner would eliminate the
features it believes will be most compelling to consumers, namely cost-efficiency and sleek design,
making the device a less attractive alternative for consumers and causing it to come to market in a much
later time frame, if at all.26 Ness Electronics, an electronics retailer, commented that "[o]ur market
studies demonstrate that low cost products that provide consumers with the ability to combine access to
broadcast programming with over-the-top and DVR functionalities, such as the Channel Master K77, are
needed to satisfy consumer demand."27 Based on this record, we find that the retail availability of the
Channel Master devices would enhance consumer choice and that some consumers may find the
combination of over-the-air broadcasting and over-the-top video free of monthly subscriptions to be
compelling.28 We are also persuaded that the required addition of an analog broadcast tuner in strict
compliance with Section 15.117(b) would increase the cost, size, and energy consumption of the devices,

20 EchoStar Petition at 7.
21 EchoStar Petition at 6-8.
22 EchoStar/Channel Master Ex Parte at 2-3.
23 We received comments from Channel Master, Ness Electronics, Inc., and David Zatz in support of EchoStar's
waiver petition. Channel Master Comments at 1; Ness Electronics, Inc. Comments at 1; Zatz Comments at 1.
EchoStar filed reply comments reiterating its arguments and highlighting that no parties filed in opposition to its
request. EchoStar Reply at 1.
24 Section 1.3 of the Commission's rules states that "[t]he provisions of this chapter may be suspended, revoked,
amended, or waived for good cause shown, in whole or in part, at any time by the Commission, subject to the
provisions of the Administrative Procedure Act and the provisions of this chapter. Any provision of the rules may
be waived by the Commission on its own motion or on petition if good cause therefor is shown." 47 C.F.R. 1.3.
25 EchoStar/Channel Master Ex Parte at 1-2.
26 EchoStar/Channel Master Ex Parte at 2 (noting that adding an analog tuner "would dramatically delay
introduction of the device in the United States and could ultimately render the product commercially unviable").
27 Ness Electronics, Inc. Comments at 1.
28 EchoStar Petition at 5.
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DA 13-2010

potentially substantially undercutting its attractiveness to consumers.29 As one commenter stated, "the
additional expense associated with integrating archaic analog tuning capabilities would be a detractor to
many price-sensitive consumers who would otherwise benefit from an advanced television solution,
independent of an MVPD."30 As EchoStar stated, requiring an analog tuner would increase the retail
price by $20 to $30 per device, the size of the devices by up to 33 percent, and the energy consumption of
the devices by 2 watts, all without a marked benefit for consumers.31 Taken together, the benefits that
will result from a waiver establish that deviation from the general rules will serve the public interest better
than strict adherence to them.32
7.
In addition to finding that the addition of an analog tuner would unduly add to the cost,
size, and energy consumption of the devices, we also find that waiving the analog broadcast tuner
requirements will have a de minimis effect on consumers. As discussed above, the Commission adopted
Section 15.117(b) to ensure that television broadcast receivers are "capable of adequately receiving all
channels allocated by the Commission to the television broadcast service."33 All full-power television is
now broadcast in digital and the Commission has set a deadline of September 1, 2015 for the dwindling
number of low power television broadcasters to cease analog transmissions.34 In fact, with little more
than two years before low power television stations are required to broadcast in a digital format, more
than 60 percent of low power television stations have already fully converted to digital.35 Therefore, the
overwhelming majority of broadcast viewers currently view only digital broadcast signals, and after the
low-power digital transition, broadcast viewers will receive only digital broadcast signals. We find it
significant that there was no opposition to the waiver by low-power broadcasters, the only group of
television broadcasters still transmitting analog signals that arguably could be impacted by the grant of
this waiver. Nonetheless, we have carefully considered the potential impact on the remaining low power
television licensees and their viewers. We find that waiver in this case will not negatively impact
consumers' access to analog television signals. Channel Master noted that inclusion of an analog
broadcast tuner is unnecessary to ensure consumers' access to analog low power television signals
because "consumers [who connect their Channel Master devices to televisions] can still access analog

29 EchoStar Petition at 3.
30 Zatz Comments at 1.
31 EchoStar Petition at 3, 6; EchoStar/Channel Master Ex Parte at 2 (noting that the increase in size would be
necessary to dissipate the additional heat of the analog tuner). EchoStar calculated that the addition of an analog
tuner would require several non-recurring engineering costs, in addition to the cost of the tuner itself. Those
engineering costs include adding a board spin or creating a daughter card to support analog tuner circuitry, rerunning
thermal calculations, and designing a new chassis. EchoStar Petition at 6. Channel Master stated in its comments
that "requiring Channel Master to include an analog broadcast tuner in its product will dramatically increase the cost
. . . of the device." Channel Master Comments at 1.
32 Northeast Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) ("[W]aiver is appropriate only if
special circumstances warrant a deviation from the general rule and such deviation will serve the public interest.").
33 47 C.F.R. 15.117(b).
34 47 C.F.R. 74.731(l).
35 Hossein Hashemzadeh, FCC, Nat'l Translator Ass'n Seminar Presentation, May 2013, at 14, available at
http://www.tvfmtranslators.com/past_papers/2013/Hossein%20Hashemzadeh%20FCC%20Media%20Bureau%20U
pdate%202013.pdf.
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channels through their television tuner[s,]"36 which are required under Commission rules to have analog
tuners that consumers can use to receive any analog broadcast or cable channels that they wish to
receive.37 Therefore, as EchoStar correctly points out, those viewers that currently view analog signals
will not be left stranded by the grant of EchoStar's requested waiver.38 We also find persuasive the
argument that consumers who are most likely to purchase a Channel Master device are likely looking for
digital content and are unlikely to be disappointed by the digital-only functionality of the devices.39 We
believe that any inconvenience or disruption this waiver may cause will be outweighed by the benefits of
granting it, especially in light of the consumer and retailer education conditions described below.40
8.
Although most broadcasts are now transmitted in digital, rather than analog, format, low
power television stations may continue to transmit an analog signal for approximately two more years,
and some consumers will continue to rely on the availability of these signals. As discussed above,
consumers who purchase a Channel Master device will continue to have access to analog signals through
their televisions. Even so, consumers of these analog signals should be able to readily understand, and
have realistic expectations of, the capabilities and limitations of the Channel Master devices. Therefore,
we conclude that it is important to condition this waiver on EchoStar's voluntary commitment to a
labeling, marketing, and retail education program that informs consumers and retailers about the
capabilities and limitations of the Channel Master devices.41 Pursuant to its commitments, EchoStar is
required to (i) develop and distribute clear and easily understood point-of sale disclosures and retailer
scripts that describe the Channel Master K77's functionality, including that the devices lack the ability to
receive over-the-air analog signals, (ii) clearly disclose in product guides, including in any Quick Start
Guides or User Guides, that the device lacks the ability to receive over-the-air analog signals and includes
a description of an easy way for consumers to discern whether they are watching an analog or digital
channel,42 and (iii) offer a program allowing for a full 30-day refund or exchange to any customer who

36 Channel Master Comments at 1. Accordingly, EchoStar notes that "every TV receiver in the U.S. today has an
analog tuner which consumers can use at any time to access over the air" analog television signals. EchoStar
Petition at 8.
37 47 C.F.R. 15.3(w); 15.117(a), (b).
38 EchoStar Petition at 4, 8. We recognize that a consumer will need to select a different input on his or her
television set to change from an auxiliary input to the antenna input. Because this can be performed with the click
of a single button located on the Channel Master remote, we believe that the inconvenience and disruption to
consumers will be minimal. See EchoStar/Channel Master Ex Parte at 2, n.3.
39 EchoStar Petition at 8; see also Samsung Electronics America, Inc. Petition for Waiver of Section 15.118(b) of the
Commission's Rules
, MB Docket No. 13-165, Memorandum Opinion and Order, DA 13-1863, 5 n.25 (rel. Sept. 6,
2013) ("Samsung Waiver").
40 We recognize that a consumer will need to select a different input on his or her television set to change from an
auxiliary input to the antenna input. Because this can be performed with the click of a single button located on the
Channel Master remote, we believe that the inconvenience and disruption to consumers will be minimal. See
EchoStar/Channel Master Ex Parte
at 2, n.3.
41 EchoStar/Channel Master Ex Parte at 3.
42 We accept EchoStar's sample language for these disclosures, or language that is substantially similar thereto:
"The Channel Master K77 is intended for use with the ATSC digital, over-the-air television broadcast standard used
by all U.S. full power television stations and is not capable of receiving the legacy NTSC analog television standard
used by some low-power and Class A television stations." EchoStar/Channel Master Ex Parte at 3.
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purchases the device under the mistaken belief that it would receive over-the-air analog signals.43

IV.

ORDERING CLAUSES

9.
Accordingly,

IT IS ORDERED

that, pursuant to Section 1.3 of the Commission's rules,
47 C.F.R. 1.3, the request for waiver of Section 15.117(b) of the Commission's rules, 47 C.F.R.
15.117(b), filed by EchoStar Technologies L.L.C.,

IS GRANTED

subject to the conditions described
above.
10.
This action is taken pursuant to authority delegated by Section 0.283 of the
Commission's rules, 47 C.F.R. 0.283.
FEDERAL COMMUNICATIONS COMMISSION
William T. Lake
Chief, Media Bureau

43 EchoStar/Channel Master Ex Parte at 3 (voluntarily committing to a 30-day refund program).
7

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