On paper, CableCard sounded pretty great. Instead of a cable box, your local provider would give you a small smartcard--the exact same design as a PCMCIA card--that would fit into the back of your TV (or DVR). In theory, you were getting the benefit of "the good old days" of analog cable with a digital makeover--just plug the wire into the back of the TV, and you'd get access to all of your digital and HD channels. In reality, CableCard has been plagued with problems. The existing technology is one-way, so you don't have access to any interactive features (pay-per-view, video on demand), and the current cards are single-tuner only, so you lose the possibility of picture-in-picture and recording one show while watching another (unless you include two CableCard slots, as the TiVo Series3 does). Meanwhile, even though the setup was originally envisioned as a DIY affair, the cable companies still require an on-site visit from the technician to get things up and running. So the cable companies see CableCard as a big money loser (sapping their PPV and VOD revenue stream while still requiring them to roll trucks for service calls), the consumer loses entertainment choices (again, no pay-per-view, video on demand, and interactivity), and the equipment manufacturers get stuck adding the costly feature to their products, whether or not anybody's actually using it.
But CableCard may be getting a new lease on life, thanks to Uncle Sam. The FCC has mandated that cable companies "cease deploying navigation devices (e.g., set-top boxes) with integrated security" as of July 2007 (a PDF of the FCC document is available here). The requirement for removable security essentially means that cable boxes distributed after July 1 will need to require CableCards. The deadline has already been pushed back twice--it was originally January 2005, then July 2006--but the FCC has since rejected the cable companies' request for further waivers. As a result, set-top makers such as Motorola and Cisco's Scientific Atlanta have ramped up production of new CableCard-enabled versions of their stalwart cable boxes--essentially, grafting a CableCard slot onto the exact same model that you probably have under your TV right now. (Presumably, these models will include whatever extra hardware or software is needed to be able to access pay-per-view and VOD functions on a given cable system.)
One interesting side effect of the CableCard requirement is that more third-party CableCard-enabled DVRs will be available at retail. To date, the TiVo Series 3 was the only alternative, but CC-enabled Motorola DVRs will soon be available, followed by Digeo Moxi models. CableCard-enabled Vista PCs that will soon be hitting stores as well.
If this all plays out, it means that consumers will have the possibility of enhanced choice when it comes to choosing a cable box and (more importantly) a DVR. To date, you've pretty much been stuck with whatever box your cable company selects--which often entails problems ranging from the annoying (a lousy user interface) to the exasperating (HDMI compatibility issues). Adding CableCard as a requirement--rather than a near-secret option available only to knowledgeable enthusiasts--should mean that customer service would improve. And the competition among third-party DVR manufacturers may actually mean--finally--that you could walk into Best Buy and choose from a selection of affordably priced high-def DVRs that work more or less identically whether you're a Time Warner, Cox, or Comcast subscriber, anywhere in the country. And while these third-party boxes may have drawbacks--such as no access to video on demand--they may also offer advantages to the cable companies' default boxes. For instance, models from both Digeo and Motorola are said to be capable of streaming recorded programs throughout multiple rooms of a home, and Motorola has even demonstrated the Slingbox-like ability to stream programming to a cell phone.
The irony, of course, is that CableCard may be going mainstream just as its successor technology is ready to leave the lab. Downloadable Conditional Access System is essentially a software version of the CableCard technology that promises to correct all of the current standard's shortcomings. But it won't be ready for deployment until 2008 at the earliest.