On September 25, 2017, the FCC released a Report and Order updating its Signal Quality (aka “proof of performance”) rules and Signal Leakage rules for digital cable systems. The FCC’s Signal Quality rules set technical standards for cable video and audio delivery, and the Signal Leakage rules address potential cable system leakage of frequencies also used in the aeronautical band. The current rules were developed for analog systems, and the Commission considered itself compelled by statute to update the rules for the digital cable systems that are now in widespread use. 

In a separate statement, Commissioner Carr characterized the Order as a “light-touch approach” and emphasized: “[W]hile we update our signal quality rules as directed by Congress, we do so without placing unnecessary burdens on digital cable operators.” Although the Order rejects onerous federal testing and reporting requirements, the FCC opened the door for local franchising authorities (“LFAs”) to include signal testing regimes as part of the franchise renewal process. 

In the Order, the FCC modernizes the Signal Quality rules by:

• Requiring cable operators to adhere to the Society of Cable Telecommunications Engineers standard SCTE 40 (2006) as the new signal quality performance benchmark for digital cable systems
• Declining to adopt subjective picture quality and set-top box quality rules
• Declining to adopt proof-of-performance testing and any attendant certification and record keeping rules for digital systems, because adherence to SCTE 40 and the error correction inherent in QAM systems should ensure good quality video and audio without testing
• For systems that are not all-digital,  reducing the number of analog channels that must be tested for proof of performance to 5 channels on systems with channel capacity of less than 550 MHz, and 10 channels on systems with channel capacity of more than 550 MHz
• Declining to adopt proof-of-performance standards for non-QAM cable providers, such as Internet Protocol television (IPTV)-based systems
• Clarifying that the Order does not prevent LFAs “from including testing regimes in the process for franchise renewal,” under which LFAs consider whether “the quality of the operator’s service, including signal quality…has been reasonable in light of community needs.”  The FCC did specify that any LFA testing requirements must use SCTE 40 parameters.

The FCC also modernizes the Signal Leakage rules for digital cable systems by:

•  Changing the threshold power level that triggers filing an Aeronautical Frequency Notification (“AFN”) for digital cable systems. Current FCC rules require cable operators to notify the FCC and provide geographic information about their systems before they use frequencies in the aeronautical radio frequency bands above an average power legal equal to or greater than 10 -4 watts across a 25 kHz bandwidth in any 160 microsecond time period. The Order sets a new trigger of 10 -5 watts average power over a 30 kHz bandwidth in any 2.5 millisecond time period for digital carriers and maintains the current trigger for analog carriers.
• Exempting all-fiber-optic cable systems from the AFN filing, allowing operators of such systems to notify the FCC that the system operates below the relevant power level
• Exempting digital carriers from the standard channel frequency offset requirements used for analog NTSC channels, because digital signals do not have the peak power characteristics that would cause similar interference issues
• Adjusting the general and cumulative signal leakage limits for digital systems to 1.2 dB less than the analog threshold, without imposing any specific test methodology
• Eliminating the I3000 method of calculating the cumulative leakage index because cable operators have abandoned it in favor of the more effective I∞ method.

The new rules will become effective thirty (30) days after publication in the Federal Register, with the exception of the AFN trigger for digital systems, which first must be approved by the OMB under the Paperwork Reduction Act.