As expected, the FCC eased the rules concerning CableCards today, supporting CableCards that customers can self-install and approving the use of HD set-tops without CableCards, which should make it significantly less expensive for smaller operators to deploy HD.
CableCards have been a mandate since 2007 and are now widely distributed, but the strict demands have led to problems. One has been that technical innovations such as switched digital video have left some retail DVRs – notably TiVo's – unable to access new MSO products and services without difficulty, a problem that stems in large part from use of the CableCard.
CableCards were also supposed to encourage a retail market for set-tops that barely materialized. Consumer demand for CableCards was, and remains, low.
It's been nearly a year since the FCC acknowledged that the CableCard experiment has thus far been failure, and new rules have been expected since then.
The cable industry found the new rules so welcome that the NCTA and ACA issued supportive statements even before the FCC's meeting today had even concluded.
NCTA President and CEO Kyle McSlarrow said the new rules were sensible and will provide MSOs some necessary flexibility.
"We agree with the Commission that implementing these changes – including increasing options for self-installation, providing more transparency and properly equipping technicians – will assist customers who use retail devices that rely on CableCards," McSlarrow said. "Our industry will work diligently to implement these changes. We also will continue working constructively with TiVo and other providers of retail 'cable-ready' products to assure that our mutual customers can seamlessly enjoy all of the cable services available to them."
The FCC also adopted rules that will allow cable operators to deploy streamlined HD boxes that are expected to cost $50 or less at wholesale – which would be several hundred dollars less than CableCard-enabled boxes. The American Cable Association has been complaining for years that the far-more-expensive CableCard-equipped boxes put a financial burden on many ACA members.
ACA President and CEO Matthew Polka said: "ACA commends the FCC for recognizing that the burden on independent cable operators to procure expensive HD set-top boxes under the CableCard regime not only slowed their analog-to-digital TV transition, but also tied up valuable bandwidth that could not be allocated to broadband or other advanced services. Today's laudable FCC action puts the country on the right path and deserves broad support from industry and consumers."
While the FCC has eased cable's CableCard burden, it is still considering a device referred to as AllVid that would be similar – a retail device that consumers could purchase and connect to any service, be it cable, telco, satellite, wireless or delivered via broadband.
The technological and economic viability of such a device has been questioned, but it seems the FCC will continue to pursue the idea.
McSlarrow acknowledged this in his statement today: "As we look toward the future, our industry is committed to working with the Commission in the 'AllVid' proceeding that explores new cross-industry approaches to develop a fully competitive and innovative retail video device marketplace."