11th hour attempts to waive the requirement to separate security functions from other functions of set-top boxes has failed. Those little boxes rented from the cable company, the way Americans used to rent phones in a bygone era, will not be subject to competition. But what this competition will bring is anybody's guess.
The gist of the rule is that the security role of the set-top boxes, which make sure subscribers cannot get channels they are not paying for, among other things, must now be placed on a universally-compatible card, called a CableCARD, which will plug into a rental box, or alternately can be plugged into any competing store-bought box.
The FCC has been waiting for this day for some 11 years, and declined to wait any longer. It did authorize limited waivers. In particular, smaller cable systems may get a break. Manufacturers process bigger orders first, so if a small system has placed orders for compliant boxes but hasn't received them because it's waiting for its supplier to get larger orders out of the way will not be subject to penalty.
FCC Chairman Kevin Martin quoted Congressional language: "Competition in the manufacturing and distribution of consumer devices has always led to innovation, lower prices and higher quality," and followed that with the simple phrase, "I agree."