Copyright 2004 Gannett Company Inc.
David Lieberman, USA TODAY
June 1, 2004, Tuesday, FINAL EDITION
Digital cable TV subscribers frustrated with having to have a set-top tuner box and another remote can celebrate Independence Day on July 1.
That's when the Federal Communications Commission starts requiring cable systems to be ready to handle a new generation of digital cable-ready TVs and home theater units. The new gear can tune in digital and high-definition TV signals without a cable system's proprietary set-top box.
The products have slots for a CableCard — obtained from the cable company and similar to a laptop PC card — which will ensure subscribers get the services they ordered.
Beyond cable-ready TVs, the change will make possible a range of new product choices to meet consumers' needs. For example, if the box your operator offers lacks a connection for your digital-video recorder, you can buy a different box that does — or buy a new DVR with a card slot and its own tuner.
Any CableCard-enabled product will work on any cable system. All that's needed is the card.
Most electronics makers will have products out soon. Sony will have 15 digital cable-ready TVs this year, including several HDTV models. "This has been the last piece of the puzzle for HD in the U.S.," says Sony's Earl Martin. Motorola, the leading maker of cable set-top boxes, plans to offer home theater receivers equipped to handle HDTV.
Although the change weakens operators' control — and signal piracy from black market cards is a worry — some analysts say that the industry will benefit.
CableCard's "convenience is a powerful tool to sell digital cable" packages that add about $10 to the monthly bill, says In-Stat/MDR analyst Gerry Kaufhold. It will help cable compete with satellite providers: "Nobody's coming out with a satellite-ready TV."
Some warn that consumers should look carefully before making the CableCard leap. So far, the units can handle only a single, one-way stream of data.
"They won't handle video-on-demand," says Bob Van Orden of Scientific-Atlanta, which sells both set-top boxes and CableCards to operators. "More than likely, you won't have an on-screen guide. And you can't do picture-in-picture or record one show while watching another. Those are extraordinarily popular features."
Consumers might wait three years to see products that deliver those services, says Motorola's Bill Taylor. The holdup is that cable, satellite, software, consumer electronics and studio representatives have yet to come up with needed additional standards that balance convenience with copyright protection. The standards then will need FCC approval. "The group, when it meets, has more than 100 people," says Dick Green, CEO of CableLabs, the industry's technology research arm.
Van Orden played down worries that the cards are less secure than the boxes and will make cable systems more vulnerable to signal theft — a problem for satellite services. He says CableCard security is "as strong or stronger than what commercial banks use."
An open question is how badly consumers want digital cable-ready TVs and other products.
"About 35% to 50% of the consumers we poll say they're interested in owning," Taylor says. But "it's an incredibly confusing consumer proposition, and the industry hasn't made it easy."