Although a lot of ink was spilled to put the CableCARD mandate into effect in 2007, two federal legislators are now trying to kill the ban on embedded set-top box security, much to the delight of the cable industry.
Representatives Bob Latta (R-OH) and Gene Green (D-TX) have introduced a bill to repeal the set-top security integration ban. The proposed bill maintains the authority of the Federal Communications Commission (FCC) to regulate set-tops, but it would allow cable operators to embed conditional access technology once again in their set-tops rather than rely on removable CableCARD modules.
The goal of the 2007 integration ban was to open up the US set-top market to greater competition. In theory, by removing the security component that kept most operators locked in to Cisco Systems Inc. (Nasdaq: CSCO) and the former Motorola as hardware providers, the mandate was supposed to encourage new vendors to enter the set-top business. It was also supposed to create a retail market for boxes that could access cable TV services through operator-provided CableCARDs.
As it has turned out, though, very few CableCARDs have been shipped for use in retail products over the last six years: Only 603,000 CableCARDS have been shipped, as opposed to 42 million CableCARDs embedded in operator-leased set-tops. Only TiVo Inc. (Nasdaq: TIVO) has managed any real success with CableCARD-supported retail boxes, and ironically, the popular DVR provider has now shifted much of its business to the cable industry. (See TiVo Scores Big Profits.)
More: Bye-Bye, CableCARDs?