August 18, 2006 3:23 PM PDT

Cable companies lose round in CableCard battle

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The cable industry suffered a blow on Friday when a federal appeals court upheld the Federal Communications Commission's mandate requiring cable operators to distribute a technology called CableCards, which will allow digital cable subscribers to get rid of their cable set-top boxes.

The U.S. Court of Appeals for the D.C. Circuit unanimously supported the FCC's "integration ban," which requires cable operators to separate encryption functions from basic decoding capabilities in their set-top boxes.

Separating these functions allows cable customers to plug their cable line directly into a TV set without the need for a set-top box. The CableCard device is about the size of a thick credit card, and fits into a special slot built into digital TVs and a growing number of consumer electronic devices, such as TiVo's digital video recorder and most HDTV sets.

The court's decision should move cable operators a step closer to finally offering a service that allows consumers to simply plug a card into a device to get cable TV service.

"Today's opinion sets the record straight: Consumers are entitled to a broad array of products that can connect to cable systems featuring innovative new features for competitive prices," Gary Shapiro, head of the Consumer Electronics Association, said in a statement. "In the wake of the court's decision, we are hopeful that cable will stop its foot-dragging and comply with the law for the benefit of consumers."

The integration ban was first initiated by the 1996 Telecom Act. The FCC carried out the order and established a deadline of July 2000 for the cable industry to provide encryption in a "point of deployment" module. What resulted was the CableCard technology, which can be mailed to subscribers and stuck into set-top boxes or compatible TV sets to initiate service.

The FCC set a deadline of January 2005 for cable operators to integrate the CableCard technology into their systems. That deadline was bumped back to July 1, 2006 and then later it was bumped again to July 1, 2007.

Now, the cable companies and their lobbying group, the National Cable & Telecommunications Association, are asking for the deadline to be extended yet again. Earlier this week, NCTA and Comcast filed waivers with the FCC to exempt certain low-end set-top boxes from the ban. Furthermore, they asked the FCC to push the ban deadline to the end of 2009.

Cable operators say they have developed new downloadable technology that will be less expensive to deploy. The industry makes roughly $2.5 billion a year leasing set-top boxes to consumers, according to estimates from Kagan Research. Meanwhile, deploying CableCards to all their subscribers could cost as much as $470 million.

But the CEA says consumer electronics makers have already stocked the shelves full of CableCard ready devices. They believe it's time for cable companies to start offering the service now using the technology that exists today.

NCTA is hopeful that the FCC will grant the waivers and delay the ban deadline. The group feels the court's opinion may shed some hope that the FCC will see things their way.

"We are encouraged by the court's observation that cable's progress on downloadable security 'may moot this entire controversy' and that the FCC was reasonable to delay the integration ban in light of the 'evolving nature of that technology,'" Neal Goldberg, NCTA general counsel, said in a statement. "Cable's progress on a downloadable security solution is the exact basis of the deferral request NCTA filed earlier this week with the commission which, if granted, would save consumers millions of dollars every year."

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11 comments

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But Time Warner is still using SDV...
TWC is still using Switched Data Video and saying that the channels on SDV are not available to CableCard customers.
Posted by paulreid99 (74 comments )
Reply Link Flag
SDV: Cable Card Issue
The problem is not with the cable company, it's with the lack of 2 way communications in the cable card system being introduced currently.

SDV works the same as VOD, you need to make a request for a stream (channel) or service. Since the standard right now is for one way services (example: IPG, Pay Channels and ordering PPV event via an operator will work), so using any interactive services is not available, it's not two way. No request sent.

SDV is new and becoming the standard for many MSO's; it allows for bandwidth reclaiming. In the end it will allow for faster connection speeds for cable modems and allow for more content to be delivered.

It's the answer to the telco's iptv system, btw there is a huge problem on that front as well. There is no cable card support as I know of, it's all set-top-box and no QAM tv tuner support.

This new FCC thing will force a standard, but as always it's the lack of a good partner ship or standards that is holding back the industry as a whole.
Posted by jobenso (1 comment )
Link Flag
In other news...
Foxes have reported that they have come up with a brilliant new device to protect the hen houses. If only you allow them to guard the houses for a few more years, imagine what you would get.

It is difficult to defend your country when your government is so corrupt.
Posted by joecm (7 comments )
Reply Link Flag
Consumers continue to lose with Cable companies
10 years later and zero progress. Any enhancements mentioned
that are in the "labs" is nothing more than a delay tactic.

Just look at the money: $2.6 Billion in revenue from leasing
boxes so that you can pay for TV which are increasingly more
commercials than content. I can see why they would like to
protect this cable racket.

I dare say that Cable companies have intentionally slowed
progress in how consumers view their TV.

Ultimately, the consumers are and continue to be the losers in
this.
Posted by m.meister (278 comments )
Reply Link Flag
cable cards
You can put all the cable cards you want out there but everyone is not going to buy a new TV just to get rid of the cable box. I suppose the cable companies should buy everyone a new TV too.
Posted by satt1313 (10 comments )
Link Flag
Flip side
Oh sure, the consumers are the losers. Ok, lets look at it this way. A digital box is not only a way to deliever digital content, it helps protect against cable theft. Now days, even though people can steal basic cable, most premium movie channels are in digital. There is no other way to get those channels. Therefor there is no way to steal those channels.

Lets put cable cards into the mix. Now, just like people hack the cards for Dish system, people can get hacked cards for their digital ready tv's and steal from cable again.

I work in the industry and the cable cards are lousy. Very rarely do they work smoothly with the tv's, if they work at all (I once tried 5 different cards in this one tv, would not work). Also, if there is an upgrade thats needed, the cable company can not just update the firmware, they have to make sure the firmware wont cause a problem with ALL of the cable card ready devices that are in use. THats a major headache.

So, sure, blame the cable company for dragging thier feet, but its not all about them wanting to rent you the box, there are lot more factors in it.
Posted by tanis143 (122 comments )
Reply Link Flag
I'm not sure I understand
I'm a bit confused - you seem to imply that cable cards are hackable but cable boxes are not. Aren't cable cards, in their essence, the innards of a cable box stuffed into a card? So why would cable cards be any more or less hackable than a cable box?

Also, regarding firmware updates, I thought that all cable-card ready devices have to undergo a rigorous certification process by the group that oversees the cable card standard. So, if the cable company updates the firmware, they need only make sure that it still satisfies the cable card standard. That wouldn't require retesting all possible combinations of cable card + cable card-ready devices, would it? (Although, I can certainly see cable companies testing against the most popular devices just to be safe)

Though there may be other factors involved in cable cards being so long in the coming, I have to believe that the cable companies are really at the heart of it. I mean, if I were the head of a cable company, I would want to stall the process as long as possible to preserve the cash cow of renting out boxes. $2.5 billion dollars a year is not exactly chicken scratch.
Posted by wernerlin (16 comments )
Link Flag
Dump them
TV is in the past. I dumped cable, and then Dish Network because
they are just not worth the money and I don't watch much anymore,
with the advent of MMORPG and the web. At least with games like
WOW you interact with the screen instead of sitting there
vegetating.
Posted by curtegg (38 comments )
Reply Link Flag
Cable TV Industry
Remember when they wanted something (poles and lines)? There ads said, "commercial free TV". Remember? They are just like Ma Bell - a monopoly. Our only recourse is legislation. Get up right now and go to your window and yell out, "I'm not going to take this anymore!"
Posted by foolmetwice (3 comments )
Reply Link Flag
Rental on phones
If you check there are still thousands of customers out there that are still being charged for rental of a phone.
Posted by satt1313 (10 comments )
Reply Link Flag
 

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