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FCC fixes CableCard rules; CableCard market likely to stay broken

You won't have to sit around your house waiting for the cable guy to pop a CableCard into your TiVo, under regulations approved by the Federal Communications Commission today. The FCC's rules will also require that cable companies clearly document their CableCard options and provide the same channel lineup to subscribers who rent their own boxes and those who buy other vendors' CableCard-compatible devices.

But don't think that today's rulings will yield a greater selection of cable-compatible hardware anytime soon.

The FCC's actions, as outlined in a press release (PDF) and documented in a 59-page filing (PDF), attempt to fix long-running problems with CableCard. This technology, developed a decade ago, miniaturized the security and authentication features of the cable box into a card you could pop into any compatible TV or video recorder.

The idea was to allow the cable-TV hardware business to function like a normal electronics market: Instead of being limited to devices offered by your cable operator, you could buy the gadget of your choice and then pick a service.

But cable operators failed to support CableCard in practice, instead continuing to push their own boxes and DVRs. Manufacturers, in turn, backed away from the technology after seeing poor sales. The FCC's 2007 requirement that cable operators use CableCards in their own products failed to budge things.

(The Washington Post Co. owns a cable service, CableOne; I have no idea what its management thinks about this issue and don't particularly care, as it doesn't provide service anywhere near the Washington area.)

At this point, you don't need the fingers of one hand to count your CableCard options: There are TiVo's DVRs, Moxi's lesser-known recorders, Ceton's computer add-on ... and then nothing, as far as I can tell.

But CableCard can still work fine when properly supported--as I found out last Christmas, when my in-laws got a new TiVo HD. Since Comcast allows Bay Area customers to "self-install" CableCards, all my father-in-law had to do was pick up a card at the local Comcast office, pop it into the TiVo and call up Comcast to read off some numbers on the TV's screen. HIs setup can't get Comcast's video-on-demand programming--a generic limitation of CableCard systems, since they can't tie into interactive cable offerings--but I have yet to hear him say "we miss the old cable box."

The FCC's action should ensure that every cable subscriber--as well as customers of Verizon's Fios TV, which is classified as a cable service--can get that experience by nine months from now. (Comcast spokeswoman Sena Fitzmaurice wrote that the Philadelphia-based company had already been working to make self-install the standard and so expected that effort to be "substantially completed in the first quarter of next year," well before the FCC's deadline.)

It may also help more people discover that CableCards exist and can save them money.

But it won't breathe any new life into the market for cable-compatible hardware. Electronics manufacturers have largely written off CableCard; TiVo essentially owns that market, even though I regularly hear from readers who don't care for TiVo's monthly service fees.

Meanwhile, the FCC's rules don't affect satellite TV services, which have shown even less interest than cable operators in opening up their hardware business to outside competitors.

The only real hope lies not in CableCard or an upgraded but largely ignored cable standards initiative called tru2way, but in the FCC's proposal for a universal interface that currently goes by the name AllVid. But that is years from resulting in hardware we can buy and use with any TV service: cable, satellite or fiber.

So for those who don't want to pay the TiVo tax, it will be cable boxes as usual. I wish I could be more optimistic, but I've seen this movie too many times; I know how it ends.

Are you expecting a different ending? Tell me in the comments what I'm overlooking.

By Rob Pegoraro  | October 14, 2010; 6:33 PM ET
Categories:  Gadgets, Policy and politics, TV, Video  
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Nope, you're about right. It's hard to imagine many changes except, perhaps, small cable companies could be more inclined to go digital since they don't need to follow the old separable security requirement.

I don't see things improving in the long run either. After reading the text in the Interface Requirements section of the FCC report, I really don't think they understand that guaranteed interoperability is necessary for there ever to be a serious market for third-party DVRs and set-top boxes. Why even bother having a requirement for an IP interface if there isn't a standardized physical connector and at least some minimum specification for functionality of the interface? The market would work this problem out if cable companies had some incentive for developing interoperable solutions, but their incentives are exactly the opposite! The cable companies would much rather control the box their customers use than let them buy set top boxes from third parties like TiVo. Third-party boxes could harm their revenue from DVR rentals, video-on-demand, and advertisements in set top boxes' interface.

Posted by: reggie14 | October 14, 2010 6:54 PM | Report abuse

I dunno, it could make it easier for htpc type devices, as well as for things like Roku boxes that might want to integrate a cable tuner.

Posted by: wiredog | October 15, 2010 7:40 AM | Report abuse

I think people would buy more devices that use CableCards if there were more to choose from. I finally bought a TiVo HD 3 yrs ago, but only because I came into a little windfall and felt like splurging. The thing that always stopped me cold before was the TiVo monthly service that you have to pay for. Trying to find the perfect device isn't easy.

What I still do not like is having to pay rent for the CableCard. It started out $1.50 a month and now it is $2 a month. They could keep raising the price and there isn't anything I can do about it. Why can't we just buy it?

I think what people want is to be able to record content from cable, the internet or their computers and then convert them for other devices like iPods, iPads or DVDs. We want to watch our shows anywhere and how we want.

Posted by: mcmugged1 | October 15, 2010 10:31 AM | Report abuse

These companies are swimming in profits and can't be bothered with jokes like cable cards that would only cut into profits.
Quote from Bloomberg News about cable and satellite companies:
"Increased video revenue is necessary for them to maintain their mid-30 percent profit margins, as programming costs escalate. "

Mid-30% profit margins? Good gravy, give me some of that!

Posted by: KS100H | October 15, 2010 11:08 AM | Report abuse

Not sure the "TiVo tax" is the right phrase here. There are fees, yes, but there is a ton of additional functionality added.

Posted by: Tucker6 | October 15, 2010 11:56 AM | Report abuse

The best way to avoid the TiVo tax -- and get a lot more functionality at the same time -- is a Media Center PC with the Ceton InfiniTV 4. You get 4 channel HD DVR, whole-home DVR and media sharing, all your cable channels including premium cable, NetFlix and any internet TV services, all for no monthly fee.

Posted by: EdG0000 | October 15, 2010 2:04 PM | Report abuse

This could be huge: "...and provide the same channel lineup to subscribers who rent their own boxes and those who buy other vendors' CableCard-compatible devices..." Currently tivos and others cannot do switched digital video w/o yet another box provided by the cable company. If they put the sdv function into the cable card (like tru-2-way) we could buy a box with room for 4 cards and be able to record 4 prime time shows at once while watching a previously recorded show.

Posted by: roncerr | October 17, 2010 7:37 PM | Report abuse

So how come with my digital set-top box from Comcast I can’t get picture-in-picture on my HDTV? Pay more, get less.

Posted by: 54Stratocaster | October 18, 2010 2:41 PM | Report abuse

PiP is easy. Just rent another box! Comcast will love to take another $17.95/month from you.

As far as the future of CableCard, I see it having an impact in the shortrun before all content goes online. Yes cable as we now know it will be no longer and all of our tvs will be built with wifi/ethernet connection. Until then Ceton will make a good chunk of money along with it's competitors in the PC CableCard market. If the PC CableCard market really picks up, look to Microsoft leading the way with Windows 7 (which includes Windows Media Center - WMC) and Xbox 360 sales, which emulate a cablebox in WMC. Combine that with online services such as Netflix, Hulu, Zune, etc. already accessible on the Xbox 360 and you got yourself a one stop shop for all media.

Posted by: JMTeddy | October 19, 2010 10:58 AM | Report abuse

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