The Future of CableCARDS (and Cable Subscribers)
October 16, 2006
There are a lot of people anxiously waiting for the FCC to make its decision on the "integration ban" waiver applications. People from the cable industry. People from the consumer electronics industry.
Not so much cable service subscribers. For the most part, they only know what the cable company tells them.
For the most part, the cable company tells them to lease a digital cable box so they can take advantage of all the wonderful new services that would be at their fingertips -- pay-per-view programming, video on demand, etc.
If they do happen to find out about CableCARDs, this is one of the ways the cable company tries to talk them into a set-top-box:
There's that last little unexplained item more commonly called switched digital video (SDV). The cable companies would dearly love to slide this under their customers' doors, very quietly. Without SDV, the cable carries all channels to all customers all of the time. With SDV, only the channels being watched have to be sent through the cable. Frees up a lot of bandwidth! Can't do that unless the subscriber has a bi-directional cable set-top-box (STB). That just happens to be exactly what the waivers cover.
If you've read my articles on the integration ban waiver applications that the cable industry has been skewering the FCC with, you know about this. If not, the short explanation is that in 1996 Congress required the FCC to get plug-and-play third-party cable boxes in stores so that consumers would have a choice (i.e. wouldn't be stuck with what the cable company was giving them). The FCC brokered the development of the CableCARD to handle the cable company's encryption/security concerns and then said the cable industry had to use these and stop making their own cable boxes that combined ("integrated") both security and navigation functions.
The integration ban. The cable industry has been fighting it ever since.
The FCC has been due to decide on these waiver requests for "low-cost limited-capability" cable boxes for some time. The cable industry has put them in a difficult position.
First off, these waiver boxes are not the "low-cost, limited-capability" devices that Congress said were eligible for waivers, notwithstanding the cable industry calling them that. The waiver boxes are all bi-directional. The cable industry is not making a simple (unidirectional) box because it wants all of its subscribers to have access to advanced services.
For example, take video-on-demand. If the subscriber has a bi-directional cable box, they could on impulse pay to see a movie on their timetable. If they do it once, they could get hooked. Lots of revenue. If they don't have a box, they just go out and rent a DVD. No revenue.
If the FCC grants the waivers for these "low-cost, limited-capability" STBs, the integration ban will essentially be out the window (taking the Congressional mandate with it). These are the boxes the cable industry wants for its mainstream customers.
If the FCC denies the waiver requests, the cable industry has made sure there will be no technological alternatives to their integrated set-top-boxes. The cable industry strictly controls the certification rules.
So when the July 1, 2007 deadline comes around, they would tell their new customers the government isn't letting them provide cable boxes anymore, and it's not their fault if there are no third-party plug-and-play boxes in the stores they can buy.
Is the government going to let that happen?
So what happens to CableCARD?
And perhaps more importantly, what happens to cable subscribers when the transition to digital TV is over (February 17, 2009).
The consumer electronics industry has been saying cable subscribers don't have to do anything to prepare for the end of the transition, that the cable company will provide a signal that will work with all of their subscribers' analog TVs. (Why say that? To justify making and selling analog-only TVs, still!)
The cable industry has been happy with that message because it encourages antenna people to switch to cable or satellite. The cable companies, however, have not been so happy about doing the digital to analog conversion. So they needed a strategy--turn a problem into an opportunity.
One cable company recently stated that over half of its customers didn't use cable boxes at all. They simply plugged the cable directly into the back of their cable-ready NTSC/analog TVs. No need for a box with a security/unscrambling function if they do not subscribe to premium channels.
What do the cable companies want to do about all of these people at the end of the transition when broadcasters have to turn off their analog signals?
Downconvert high-def digital programming to standard-definition analog and send it out to their subscribers with analog TVs? Some smaller companies might want to do that, but most don't want to keep sending out a bandwidth-gobbling analog signal that they could be using for much more efficient and profitable HD digital signals, broadband data, VoIP (telephone), and video-on-demand.
So give them all a simple digital-to-analog converter box (a QAM tuner/demodulator)? Could do that. Of course those customers could not be sold profitable premium channels because they would need a security/descrambler device for that (at a minimum a uni-directional box).
This would be a digital cable box with integrated security ("conditional access system" - CAS) OR (aha!) a CableCARD plugged either into a CableCARD-ready TV or a separate navigation-function-only set-top-box (either third-party or cable company supplied).
The cable companies aren't interested in uni-directional boxes. They tell the FCC that their customers want advanced services such as interactive program guides, PPV, and VOD (even if they don't know they want them, like all those people who just plug the cable into the back of their TVs).
CableCARD is uni-directional.
The cable companies want only bi-directional.
There has been some effort to develop a bi-directional CableCARD standard but that effort was stalled or stone-walled or whatever you want to call it when one or more of the required parties didn't want it to go anywhere.
Bi-directional CableCARD development has now been shelved in favor of a software replacement called DCAS ("downloadable conditional access system") which has a lot of advantages over the hardware CableCARD.
Unfortunately, that development is also stalled.
So how can the cable industry insist that its higher-cost, advanced-capability bi-directional boxes (featuring high-definition, digital video recording, etc.) be in compliance with the July 1 integration ban if bi-directional CableCARDs will not exist?
It's what lobbyists do.
Petition for an extension to the ban. Argue (again) that DCAS is just around the corner and . . .
The future of CableCARD?
If the FCC grants the waiver requests, CableCARD is dead.
If the FCC denies the waiver requests, chaos will reign. Back to politics.
If the FCC decides to extend the deadline yet another time (for another year?), urging the timely development of DCAS by all the various parties, then it's back to business as usual. CableCARD will quietly disappear.
The convergence of consumer electronics is looking for its way. The cable industry, the computer and IT segments, the telephone companies, the consumer electronics industry. They all have their own business models. It's like musical chairs, except that not everyone wants to play nice.
Lots of paths. Some lead to deadends. CableCARD Lane looks to be one of those cul-de-sacs.