The Federal Communications Commission dropped its fines against Time Warner Cable and Cox Communications over the two companies’ use of switched digital video.

Last year, the FCC started looking into Time Warner Cable and Cox’s use of SDV because some of their subscribers were not able to access channels that had been moved to switched digital groups.

With switched digital video, cable operators are able to send just the digital signals that are being watched in a service group or node, instead of the entire lineup of channels . Cable operators use this reclaimed bandwidth for more high-definition channels or other services.

In order to receive SDV channels, customers need a two-way-enabled device that knows the SDV protocols, but some DVRs, such as TiVo models, are unable to access the switched channels.

On Jan. 19, the FCC’s Enforcement Bureau fined Time Warner Cable $40,000 for two complaints in its Hawaii division. Cox was fined $20,000 for one complaint in Virginia.

“As described below, based on our review of TWC and Cox’s arguments and the facts presented, with one exception, we hereby vacate in their entirety the Bureau’s previous Notices of Apparent Liability for Forfeiture and Forfeiture Orders relating to TWC and Cox’s implementation of SDV. We base this decision on a plain reading of our rules, the potential consumer benefits of SDV deployment, and other factors that limit the potential scope of consumer disruption,” the FCC said in Friday’s ruling.

The exception was the FCC’s decision to uphold the finding that Time Warner Cable needed to give customers a 30-day advanced written notice to local franchise authorities because SDV does represent a change in service.

In a separate statement, FCC commissioner Robert McDowell said that SDV doesn’t violate FCC rules, but that advance notice should be given before the technology is put in place. The FCC and McDowell also acknowledged the benefit to consumers of SDV.

“It also can serve the public interest by allowing cable operators to comply with the Commission’s ‘viewability’ rules and deliver more programming options, including HD channels and niche programming, without displacing significant numbers of existing channels,” McDowell said in his statement.

Time Warner Cable was one of the early adopters of SDV, dating back to a 2004 deployment in Texas with BigBand Networks.

“Time Warner Cable is gratified by the Commission's decision finding that the deployment of switched digital video technology is fully consistent with the Communications Act and FCC rules. We have long believed that SDV holds enormous promise for consumers. It enables us to make more efficient use of bandwidth and, in turn, to offer more high-definition programming and faster Internet speeds, among other benefits,” Time Warner Cable said in a statement.

Cox also released a statement that said: “Cox is pleased with the FCC’s decision regarding switched digital video technology. This is a win for consumers that enables us to add still more value to their television service.”

In his statement, McDowell noted that SDV deployments have largely been on hold since the FCC’s enforcement proceedings became public. With Friday’s ruling in place, SDV vendors such as BigBand and Motorola could start to see more deployments of SDV.

“We applaud that the FCC recognizes that SDV increases the amount and quality of programming for consumers today,” said BigBand President and CEO Amir Bassan-Eskenazi. “The decision is a realization that the potential of SDV is not only in bandwidth expansion, but also in the industry’s ability to bring cost-effective personalized video services to consumers on multiple screens.”