Set-top shakeup is in the cards

A new Federal Communications Commission rule that requires cable operators to change the hardware in their set-top boxes has finally gone into effect, but few industry experts believe it will do much good for consumers or jump-start competition.

As of Sunday, cable operators must provide new TV subscribers with set-top boxes that have a slot for a special PC card known as a CableCard. This card contains decryption mechanisms that determine if a user is allowed to view the video content coming from the cable operator.

In the past this security, which provided conditional access, was integrated into set-top boxes that people leased from their cable operators. But now, due to the new FCC rule, that security mechanism will reside on a separate card that fits into a slot on the set-top box.

So how will consumers be affected? The truth is there is very little benefit to this switch for consumers, some industry experts say. Most people won't even notice if a CableCard has been inserted into their set-top box, because the card itself provides no additional features or functions. What's more, the rule applies only to new set-top boxes.

Some people argue that the change will actually cost consumers money, because cable operators have complained that the changes are costly and anticipate passing along the added expense to subscribers.

"There really aren't any benefits to consumers," said Mike Paxton, an analyst with In-Stat. "It might offer them more choice, but consumers seem happy with what they already have. And it could even raise prices, since the costs associated with the upgrade will likely be passed on to subscribers."

Long time coming
The July 1 deadline has been a long time coming. The Telecommunications Act of 1996 ordered the FCC to help electronics companies compete with devices that cable operators leased to subscribers. The market today is dominated by two major players: Motorola and Cisco Systems' Scientific Atlanta.

The idea was that increased competition would help lower prices and provide more functionality for consumers. But working out the specifications and technical details took a long time. In 2003, the cable industry finally agreed on a decoder, the CableCard. But for the past four years, the cable industry has lobbied the FCC to delay putting the rule into effect.

Some cable operators are still trying to get out of complying with the new requirement. Telephone company Verizon Communications, which offers a TV service through its Fios network, has applied for a waiver, arguing that its technology is new and different enough from the old cable system that it should be granted the waiver. The company is still waiting to hear from the FCC.

"We are optimistic that the FCC will grant our waiver," said David Fish, a spokesman for the company. "Verizon's Fios TV offering is exactly what Congress envisioned when it adopted the waiver provision: new competition to incumbent cable providers and a technologically advanced video offering and technology platform. Verizon's Fios network is transforming the broadband landscape."

"This will help make the set-top box truly portable so it can be installed on any cable operator's network in the country."

--Michael Fidler, CEO, Digeo

Consumer electronic makers have touted the enforcement of the CableCard rule as a breakthrough that could finally help them establish a consumer retail market for alternative set-box devices and other CableCard-enabled devices like TVs and PCs.

For example, a small company called Digeo is planning to release a set-top box in retail stores this fall that will provide an enhanced digital user guide, multi-room digital video recording for high-definition programs, and an integrated DVD player that will allow video streaming into multiple rooms.

The device also will connect directly to the Internet and provide programming from companies that offer content via the Web, such as Joost or Movielink. Digeo hasn't yet announced which providers it will work with, but it will have at least one Internet movie provider signed up when it launches the device this fall, said Michael Fidler, CEO of Digeo.

The company has been selling its products to smaller cable operators like Charter Communications. But it has had a harder time partnering with larger providers like Comcast and Time Warner, because the market is dominated by Motorola and Cisco's Scientific Atlanta.

Fidler said he sees the CableCard requirement as an opportunity for Digeo.

"The enforcement of this rule allows for a very small crack in the door that we can use to get our foot in the market," he said. "This will help make the set-top box truly portable so it can be installed on any cable operator's network in the country."

Fidler said he believes that the only way to drive innovation in the market is to encourage competition. Indeed, this has worked to some degree in the past. When TiVo came to market with its DVR (digital video recorder), which it sold through retail chains, and satellite companies started offering DVR services, cable operators quickly responded by adding DVR functionality to their own set-top boxes.

[m.meister]

CableCards not catching on?

Hmm, Cable companies drag their feet for YEARS .. then finally
come out with a crippled ONE-WAY card.

They then use lack of support for their crappy ONE-WAY card as
evidence that consumers don't want a real CableCard.

Yet another example of corporations twisting reality with the
dumbfounded logic.

The solution for me is to cut off digital cable until such time as
they offer a real two-way CableCard. I don't want to be forced to
use their crappy set-top box (and they are crappy) or worse,
their crappy (AND BUGGY), cheap Tivo knock-off.

I don't think I should pay $13/mo extra (after a recent 30%
increase) for a "DVR" that locks up constantly, loses
programming guide information or worse, recorded programs
and puts ads inside of guides such that they actually interfere
with using the box. No thank you.

[VDeCarlo]

Finally....

I have the best cable box that Time Warner offers (with a built in DVR) and I have to say that it's a horrible piece of equipment. ReplyTV had a better box more than five or six years ago. Allowing other companies the ability to offer competing cable boxes was an excellent move by the FCC and they should be applauded.

[BrettonW]

Happy customers?

InStat needs to do a little bit of checking, I think. Comcast's DVR service is among the worst pieces of software I've ever used. It's allowed to be that way because Comcast owns the link to the customer - this is the definition of anti-trust. I'd love to get TiVo, but the ComCast package is too attractive pricewise. Even absent "new" product ideas, I expect that the competition resulting from this change will increase pressure on the big vendors to ship a high quality product (one that actually works would be a big step, too). It also opens the door to innovation, a door which was previously locked tight.

[LCD1080]

The FCC's requirement will give more choice to the consumer

I disagree with this article when it states that the FCC's requirement will offer very little benefit for consumers. Up until now cable companies have been able to pressure their customers into renting their used cable equipment rather than owning it themselves. This is supposed to be a free market economy where people have the right to choose. Now thanks to the FCC perhaps that choice will become more readily available and adopted.

[ewelch]

One-sided, poorly researched, anti-consumer article

This article was obviously written from one point of view - the cable
operators' position on the subject of cable cards. They don't like the
idea of not being able to charge us $8 or more a month for a DVR.
That's because if there were two-way cable cards, and they allowed the
set-top box companies to download their own software into the boxes,
a major chunk of revenue would disappear. Just ask people who buy
their own cable modems. Is there a benefit there? You bet! No monthly
rental fee!

I will buy a Series 3 TiVO in a minute once I confirm from Time Warner
that they have the 2.0 Cable cards. Why? Because Diego's HD DVR - the
Moxie - is a lousy piece of technology. But of course it's slow and
buggy, it runs on Windows! It's slow and can't touch TIVO for the user
interface. Although the remote was obviously inspired by the TiVO
remote, so it's pretty good, if a mediocre to good imitation.

Actually, I don't really care if I get a 2.0 cable card. I don't use On
Demand video. I don't need interactive TV. I pretty much watch a few
good HD shows and that's about it. I watch very little non-HD stuff any
more because it looks so bad in comparison.

I hope C|Net got lots of money for this placed ad from the cable
companies. Such assertions as this new run not offering consumers any
benefit is a transparent lie. The only alternative is the writer didn't have
enough time to talk to both sides and trusted the cable companies to
give the whole picture. What did they teach us in journalism school?
Who, what, when, where, why. And the why here is obvious.

It was far from quality journalism that readers of this site deserve.

[rbergerpa]

Why I don't have digital cable

I will never get digital cable until my TV, DVR, etc. can tune it
directly without adding another box from the cable company.
Without Cable Card, I will just avoid those services.

[rcarsey]

Comcast & CableCards

This is actually a great rule. For about 3-4 months, I routinely called Comcast to have them come out and install a CableCard in my LG television. The answer I always got was "sorry, we don't have any in stock, try again in a couple weeks". I guess they must keep a very small inventory (i wonder why). This will (should) make cable companies carry larger quantities of Cable Cards -- and they can no longer play the "sorry we just ran out" game. I switched to FiOS anyway after that--denying them any more of my money.

[nt007]

Why people are not using cable cards

We actually have a cable card and the card is capable of a lot.
But Comcast does send the channel guide down to the card so it
is even brain dead for 1-way operation. The card has set-up for
the cable guide and we can display a blank channel guide, so it
must be able to use it.

But the most important reason why no cable cards are being
used is that I want TV's with cable card slots so I do not have to
have a desk top box. This is what cable companies are so
pissed about. Without desk top box no on-demand
programming. Now, I could care less about on-demmand
because it is just a way to get more money for programming.
But the cable companies are betting their future on on-demand.

We found one HD TV, Sony Bravia, with a cable card slot a year
and one-half ago. None can be found now at Best Buy.

Cable cards can only be used if there are slots to put them in.

[cidman2001]

A what...?????

Maybe the reason there isn't any demand is the fact that there's been no effort to educate the public, because the cable companies don't like the idea in the first place. This is the first I've heard of it, albeit I don't watch much TV or care much about spending thousands of dollars for HDTV. I have basic cable and guess what I don't have to have a set-top box at all!!

[amigabill]

I want cablecards

I hate having to rent the cable boxes. I'd rather buy them and then pay the smaller cable-card only fee. Having to rent them forever, how many times do you buy the thing before you die of old age? I really only want to buy the box once. And I'd love to have a better choice in what box feaures I get.

I think the big reason we haven't seen a huge run for cable cards so far is that A) the cable company didn't have to and B) they haven't really had two-way cablecards available, so even those with slots directly in their TVs get boxes anyway so they can get on-demand and stuff like that which does not work with one-way cablecards. I'd love to get a Tivo Series 3, which I understand works OK, but does not have on-demand support due to the one-way cabelcards.

Also, I've heard that friends using this stuff have had a terrible time getting their cable company to get things right. One has a Tivo 3, and the cable dompany didn't want to give him two cablecards. Many of the ones they did give him didn't work, not even directly in his TV. They also had him stay home waiting for the isntall guy who twice arrived with no cablecards in his truck. Uh, why are you here to install a cablecard and you don't even have one?

Why does Verizon think it should get a waiver and not be required to do cablecards? I really hate their business methods. Let me choose what hardware I use for crying out loud. I'd like the ability to use my Tivo, as it gives me more than the cableco boxes do. The Digeo thing sounds cool. I'd love to be able to use a MythTV box with a gigantic hard drive. I'd rather pay for two cablecards for a multituner box such as Tivo 3 than have a stack of cableboxes.

The cable companies make money renting equipment to all of us. They don't want to lose that income, and that's why they don't like cablecards. They want to keep their control, power, and money, they don't care what may be "better" for the consummer. Cabelcards are a step toward losing some of each of those things companies want for themselves.

[murric1]

A Great Idea- Like Owning Your Own Phone!

If properly implemented, this would level the playing field on shoddy equipment! I purchased an LG digital tuner with the features I wanted (included upconverting DVD player). I did not need the Comcast Explorer 8300HD unit (features hard drive recording and also early units had firmware problems with HDMI switching A/V receivers). Also the Comcast boxes are ANALOG & digital! They never admit that reception isn't all digital. So, channels I like (HISTORY & DISCOVERY) are not remapped to digital equivalents. They also pass through only the HDTV channels as required by the FCC.

So, I bit the bullet and just ordered basic digital cable with HD. First they delivered a Scientific Atlanta 3250 HD box. It had an OK picture (LG was better!). But, on SD programming, annoying sync codes (white dashes) appeared above the images. Using the 3 postion zoom button, you could eliminate this, but also a large part of the image (LG had incremental sizing - far superior!). Comcast service came again and exchanged the box for an Explorer 8300HD (recording disabled). Exactly the same picture problems (probably the same tuner). An additional service call yielded the same results. On their suggestion, I purchased an expensive component video cable instead of HDMI. Guess what!- results the same! The Service Manager has yet to reply to my repeated calls!

Yes, Two-Way cable cards would be a great idea! Like owning a phone, you pay for the features you want! The quality of the set top box or TV would be your choice, and you can take it anywhere, without paying high rental fees for substandard equipment. The other side of the coin (If Congress would avoid the cable lobby) is a-la-carte programming. Who needs to pay for 17 cartoon and food channels!

[tgdelb]

Tivo 3 is the best example of cable card potential.

For anyone that want to see how a cable card can set you free try
the Tivo 3. It has two cards/tuners and is a shining example of
what the cable providers should be offering. Add a recordable DVD
and this unit would really be perfect.

[Onyxyl]

Making money leasing boxes???

I know for a fact that the Motorola HD DVRs cost around $500. My cable company charges $12.99 a month for the equipment. It would take a couple years to recover that upfront cost and by that time, the equipment would have to be replaced for an upgraded model. Plus you have overhead in stocking equipment, replacing bad equipment, etc. My cable company employees 2 people just to deal with this equipment. These boxes are only used as a value added service and because the competition has them also. My cable company is looking forward for the day that consumers can go purchase their own box!

[tanis143]

OMG, haters beware

Geez, everyone who blames the cable card's craptastic performance on the cable companies need to read who all had a hand in the development. Namely the MPAA stepped in and said they needed to have a say in its creation to "protect" their works. Since then, control methods they want have caused issues with it. Also, with two companies out there making these devices, there are bound to be bugs in both sides (the card and card-enabled device). Hince the reason tv's with cable card slots have updated firmware.

Not only that, but because the FCC pushed this so hard, cable labs was only able to certify the one way card while testing was is still being done on two way cards.

And yes, this requirement is only going to drive up the costs to the consumer. The cable companies have to purchase these cc enabled boxes from either Motorola or Sci Atlanta, and they will pass the cost of R&D onto the cable companies. As they say: Crap rolls downhill.

Though I would applaud a system that would allow me to use my pc to record digital content (ATI has such a card, but guess what, the MPAA will only allow it to be sold oem, so they can control what hardware it goes into) certain agencies feel so threatened over the whole digital age that they clamp down on anything new to prevent "piracy".

[drcos_fl]

Two-way cards?? Check your facts.

Two way cable cards? The existing cards have the capability of two-way communication.
The problem right now is Cable Labs (a wholly-owned subsidiary of your American cable conglomerates) mandate for how the host device is allowed to communicate back to the head-end.
Right now, for communication back, the host must comply with the OCAP standards, which the TiVo does not (it involves basically giving your provider complete control over the box, not something I want to pay $$$ for).

Also, the lack of consumer demand is very much the fault of the lack of any advertising or push from either end on the cards. The only reason the providers are even supporting the cards is the FCC mandate. They would much rather keep their monopoly on renting you a $300 box for $20/month.

[curmudge1]

Verizon FIOS & CableCard

No way does Verizon deserver a waiver from the FCC -- Verizon knew about this requirement and went ahead and developed and deployed noncompliant technology. Verizon deserves to be penalized for their arrogance and defiance.

BTW & FWIW, in the New Jersey statewide Verizon FIOS TV application, Verizon lists the monthly cost of a CableCard as $2.99, iirc. So Verizon must be able to support CableCards, at least for the current one-way technology.

I, too, am waiting to be able to *purchase* my own NTSC/ATSC/QAM with CableCard set-top box, aka tuner. Anyone know of such? If so, please email me: dstrom and my ISP is speakeasy and the TLD domain is .net. (hope you can put those 3 pieces together to create an email address).

[JCPayne]

Verizon does deserve a waiver. Their technology

is brand spanking new they haven't even gotten a chance to make back a profit on their investment. Comcast et al have had years..... now. They've been upgraded in most places for over 10 years now.

[batavier]

Bypass Set-Top Box?

I thought the main advantage of the cable card, was to replace the STB on new HiDef TVs. They will plug directly into a slot in the back of the set.

[azlizird]

Television!!!!

True freedom is NO TV. Let the greedy buggers starve and learn to read!!azlizird

[chriskva]

Cable companies provide content??

I always thought content was their business. Access to their content can be done with software. Cable cards are not even necessary. Cable operatives having been milking HDTV fans with rental fees, higher digital subscription fees. And don't let anyone tell you differently!