CableCARD Battles Rage On
July 6, 2006
While updating my standing article on cable TV the other day, I noticed that the FCC ordered the cable industry to start reporting on the problematic deployment of unidirectional CableCARDs, and also to report (along with the consumer electronics industry) on the "disappointing" progress in the industry negotiations to develop a two-way CableCARD (for interactive services: eg. programming guides, video-on-demand, etc.).
CableCARDs plug into digital cable-ready TVs and act as the gatekeeper for premium cable programming. The CableCARD at the time of installation is programmed by the cable company with the customer's billing information (the card is provisioned with the map of channels that the customer is authorized to view). The credit-card-size CableCARD therefore performs a security function. In CableCARD TVs, all the other cable service navigation functions are built into the TV.
Alternatively, the cable customer can use a cable set-top box (STB) that performs both security and navigation functions. This type of box is called an integrated STB, and heretofore has been suppled by the cable company, usually for a monthly fee.
The era of cable company integrated STBs is supposed to be coming to an end--Congress and the FCC have imposed a ban. The consumer electronics industry will start building the navigation devices for retail sale. This will give customers a choice, will foster competition and innovation, and hopefully reduce prices. The cable industry is not eager to lose its monopoly and is resisting.
Why, you ask? The lease of STBs for premium cable services brings in an estimated $2.5 to $4 billion per year for the cable industry!
The tensions have escalated into a tooth and nail fight, to the detriment of the consumer. The FCC is referee.
The battle has come to a head with a Comcast application for a waiver from the ban for three integrated set-top boxes that it claims fall into the low-cost, limited capability category that is eligible for exemption.
Only problem is that the cost is not that low and the capabilities are quite advanced. These are not the traditional simple cable boxes that enable an old analog TV to receive all the regular channels. For example, these STBs are capable of two-way communications with the cable company, allowing the customer to buy pay-per-view movies, video on demand, interactive program guides, special digital channel tiers, etc.
The cable companies like these bidirectional/interactive cable boxes because they can derive more revenue from the customer. And with cable's declining market share, growing revenues means getting more money from existing customers.
And ultimately, with the end of the transition to digital TV nearing, cable companies are going to have to ensure that their customers with analog TVs continue to receive programming one way or another. Either every analog customer will need some sort of cable digital-to-analog converter box, or the cable company will have to convert the digital signal to analog at its head-end (and either send both digital and analog out over its cables, OR send out only analog).
Neither of the last two alternatives is attractive, so it looks like the larger cable companies will be left with putting a digital-to-analog cable box in every customer home having an analog TV. If that's all the box did, no extra revenues would be realized (and SDV could not be fully implemented--more on that later).
Comcast says the three "low-cost, limited capability" boxes it wants waivers for are popular with customers and it expects to put millions of them in homes. So many so that the integration ban (which would grandfather existing STBs) would have little effect in getting large numbers of competitive products into consumers' homes. That is, assuming the ban is not simply blown away.
Implementing instructions from Congress, the FCC in 1998 announced what has been dubbed the set-top box "integration ban." Security and navigation functions would have to be separated. The cable companies would retain control of the security part (which evolved into the CableCARD), and the consumer electronics industry would start designing and building the navigation part (either built into a TV or DVR, or as a separate box).
The two industries got together and developed a standard for a one-way ("unidirectional") CableCARD, and then started work on standards for an interactive ("bidirectional") version. Unidirectional CableCARDS made their debut in July 2004.
In the meantime, the cable companies have continued to deploy integrated STBs. The ban has already been delayed several times, and is now set to kick in on July 1, 2007. The latest postponement was agreed by the FCC after the cable industry complained that separating out the two functions would cost too much. If there was only more time, they might be able to develop a much cheaper downloadable software security feature.
So no integration ban yet. Will the new deadline hold? Will new technology make it irrelevant?
Working Toward a Solution?
For the last two days I've been reading submissions to the FCC set-top box docket. It's one of the places the cable industry and the consumer electronics industry use to point fingers at each other, quite vigorously. Potential good developments are going nowhere. Potential bad developments are proceeding apace within the cable industry, and in reaction, in the consumer electronics and computer industries. The conflict does not bode well for consumers.
I've read the progress reports on the negotiations to develop bidirectional CableCARDs and a software-based conditional access agreement, and the word "progress" is not fitting. Excerpts such as "parties continue to meet with and work with each other, and both sides share the belief that this process is valuable and necessary," and "issues that the parties have agreed to discuss" do not inspire confidence that results will be forthcoming.
One-way CableCARDS - There's nothing better to report on the deployment of unidirectional CableCARDs. When they don't work, the TV maker says it's the cable company's fault, and the cable people tell the consumer the TV is the problem. While there are some exceptions, the rule is no cooperation between the two combatants, er, industries.
Software solution - Negotiations on the software approach are being conducted in secret. Participating manufacturers are not allowed to discuss progress with each other, and neither is the FCC privy to what's going on. This software alternative, given the acronym DCAS (Downloadable Conditional Access Security), was proposed as an ultimate replacement for CableCARD--something that could be used in both cable-supplied and retail products.
Well, in theory, yes, if everyone was working toward the same goal. The computer people think that DCAS as proposed by the cable industry will not work equally well on multi-purpose computers (i.e. Macs and PCs). The plan is that computers will in the near future function as home gateway devices for video programming. (TV tuners in next-gen computers?)
Notwithstanding the secrecy, there is worry in some quarters that cable's DCAS may call for the use of a proprietary chip that would not treat all competitors equally.
Switched Digital Video (SDV) - Cable companies are starting to deliver programming using a technique called Switched Digital Video (SDV). It's the same sort of technology that the telephone companies are using to provide their competing services--broadband internet access, IP telephony, and now video.
The cable companies have had to adapt the basic internet protocol (IP) technology for SDV because cable has to deal with their own unique infrastructure--i.e. 40 million or so MPEG set-top boxes.
Traditional cable delivery of video programming sent all of the available channels to everyone's TV sets all of the time. Now that they want to push broadband, IP telephony, high-definition content, video-on-demand, etc. through the same pipe, that old technology was deemed wasteful.
SDV maximizes bandwidth use by sending only those channels and services to their customer's home that the customer is actually using (or rather, to the group of customers that a particular cable serves), thus freeing up bandwidth for other services.
It's the same principle as video-on-demand (VOD).
When you want to watch a new channel (that no one in your group is watching), a signal is sent to the cable company's head-end requesting that it be sent, and the computer makes the necessary bandwidth allocations and sends the program. Happens very quickly.
It allows the cable company to send lots more content through its existing cables, including new profitable services, and it's relatively cheap to implement.
But as you probably already figured out, it requires that the customer have a two-way (bidirectional) set-top box. That means it won't work with cable-ready TVs, or with one-way STBs, OR with unidirectional CableCARDs.
The cable companies really want to make SDV technology universal, and that helps explain why they are so anxious to convince the FCC that the three bi-directional STBs for which they are seeking a waiver from the integration ban are really "low-cost, limited capability" devices.
Time Warner has sent a letter to its customers concerning SDV. In it, they say:
"As we make improvements to our network, we need to transition to a switched digital broadcast delivery method which involves two-way programming. This allows us the greatest spectrum for anticipated additions of products such as new interactive services and more High Definition programming. We want to advise you that these upcoming changes may affect some of your viewing choices."
Time Warner also visited FCC officials to explain their actions. Their ex parte letter of the meeting summarized what they discussed. They implemented SDV:
"to efficiently manage its network spectrum and maximize value for TWC's subscribers." . . . "We also recognized that SDV would impact some subscribers using unidirectional digital cable ready products ("UDCPs") . . ."
In other words, subscribers who are using CableCARDs. Some of these affected users report that they cannot view high-definition channels with SDV in place, but instead receive the standard definition analog version of that programming. The cable company is always happy to lease a bidirectional set-top box to them so that they can take full advantage of SDV's "benefits."
Cable knows DirecTV will have 1,500 local high-definition channels and 150 national high-definition channels by next year. "Cable's use of switched technology is necessary to meet this competition and provide consumers with access to more high-definition channels, higher-speed data rates, all-digital networks, increased on-demand content, new program networks and other new services."
Or the consumer could just switch to satellite.
The M-Card - Sounds like a German car, doesn't it? It's actually another maneuver by the cable industry to ensure that it keeps exclusive control over hardware used in their systems.
M-Cards are "multi-stream" CableCARDS that will be available only in cable company supplied devices. Multi-stream cards would permit, for example, picture-in-picture (PIP) and recording one channel while watching another. Competitors' cable boxes will only have access to single stream "S" cards.
The Final Word
The FCC has set out a doctrine called "Common Reliance." It means that the cable industry and its competitors in the consumer electronics industry must rely on the same underlying technology in order for all cable navigation devices to be supported equally within any cable service. That means everyone using CableCARDs.
The consumer electronics industry says Common Reliance is essential if all of these devisive issues are to be solved. The cable industry says Common Reliance won't help anything.
Isn't cooperation wonderful?
The FCC is expected to make a ruling on Comcast's integration ban waiver request within a month. Whenever it happens, and whichever way it goes, don't expect this issue to go away.