Remember the old SNL sketch in which Chevy Chase announces to the audience that “Generalissimo Francisco Franco is still dead?” I was reminded of that the other day when I read that the House of Representatives, in passing the STELA Act, also included a provision that ended the prohibition against integrated set-top boxes, which if passed by the Senate, could finally kill the often-maligned CableCARD.
The FCC’s valiant attempt to create a retail marketplace for cable set-top boxes, the CableCARD has a storied history in our industry, much of it negative. Efforts to stimulate such a market originated nearly 20 years ago with the passage of the 1996 Communications Act. Over the years, though, these efforts were met with varying responses from outright opposition from the cable industry to consumer indifference. Google Cable- CARD and the words most associated with it include, “failure,” “stalled” and “resistance.” Much of that resistance came from the cable industry, which had numerous reasons for opposing the technology but mainly objected to the thought of losing the monthly rental fees it collects from its subscribers.
Actually we’ve been down this road several times already. Efforts to integrate CableCARDs into digital TVs a decade ago were greeted with lackluster results. In 2006, a year before the FCC issued the ban on integrated set-tops, the New York Times reported that although 6 million CableCARD-ready TV sets had been sold to consumers, only about 170,000—less than 3 percent—were actually using the device, with the rest opting for the traditional cable box. In addition to lack of consumer interest, the technology was hampered by the fact that it was oneway only communications, which limited the ability of cable operators to introduce advanced services such as VOD, pay-perview or even the cable company’s own EPG. And while there has been progress on developing two-way interactivity, many cable operators are advocating a move away from a hardware approach to software (the “Downloadable Conditional Access System”).
In the absence of interest among both cable operators and subscribers, companies are forging their own alliances, as evidenced by an agreement announced in July between Comcast and TiVo to develop a two-way, non-CableCARD security that would allow MSOs to deliver linear TV and VOD to TiVo-integrated Comcast boxes.
Perhaps the demise of the CableCARD was best summed up by Rep. Bob Latta (R-Ohio), who told John Eggerton in sister publication Broadcasting & Cable earlier this month that the ban on integrated set-top boxes “is not close to doing what it said it was going to do,” adding that “the integration ban has cost at least a billion dollars to consumers and operators out there.”
It’s time to move on. In a report to the FCC earlier this year, the National Cable & Telecommunications Association said that of the 47 million set-tops supplied by the country’s nine largest MSOs, only about 616,000 are using CableCARDs in the devices. Consumers are getting their digital programming through an increasing variety of methods; witness the popularity of OTT boxes such as Apple TV and Roku. Maybe there was once a need for a retail cable set-top box but that time is gone. The CableCARD has used up all of its lives.