It's been seven years since the FCC's "seven oh seven" mandate banned cable companies from including integrated security in consumer set-top boxes. Now the US House of Representatives thinks it's time to bring the industry's hated CableCARD experiment to a close. (See Bye-Bye, CableCARDs?)
In a bipartisan vote, the House passed the Satellite Television Extension and Localism Reauthorization Act of 2014 late Tuesday. The primary goal of the STELA bill (also known as STELAR) is to extend the rights of satellite operators to import distant network signals when local affiliate stations aren't available. However, the bill also kills the requirement that cable operators separate security from set-tops in the form of a CableCARD.
In other good news for cable, other provisions in STELA prevent broadcasters from colluding during retransmission negotiations and allow pay-TV providers to black out a programmer's signal even during sweeps periods if a licensing deal hasn't been reached. The US Senate must now approve the STELA bill and all these provisions for them to become law.
On the CableCARD front, the STELA bill comes after years of complaints from cable operators that the separable security mandate imposes unnecessary costs and an undue burden on them that satellite and telecom TV providers don't face. CableCARD technology has also largely struck out with consumers, very few of whom have installed the security modules in set-top devices that they bought at retail.
Indeed, the National Cable & Telecommunications Association (NCTA) , in its latest filing with the Federal Communications Commission (FCC) , reported that more than 616,000 CableCARDs have been deployed by the nine largest cable operators for use in retail devices. While that number may sound impressive at first, it pales in comparison with the more than 47 million CableCARDs that have been shipped in operator-supplied set-tops over the past seven years.
Today's argument against the CableCARD also factors in the reality that the transition to IP video delivery is opening up competition in the TV hardware market without the help of any FCC mandate. Consumers can now watch an increasing amount of cable programming on computers, mobile devices, gaming consoles, and dedicated media streaming devices.
Recently, news also leaked that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and TiVo Inc. (Nasdaq: TIVO) (maker of the most popular retail CableCARD products) are working together on a non-CableCARD solution for delivering Comcast interactive services on TiVo's retail set-tops. If the two companies succeed, it could go a long way to appeasing TiVo fans who have traditionally been some of the most vocal CableCARD supporters. (See Comcast, TiVo May Ditch the CableCARD.)
Back to the US legislative process, the House vote on STELA precedes further consideration of the matter by the Senate. The Senate Judiciary Committee passed reauthorization of STELA earlier in the year, but the Senate now has to take the additional cable-related provisions into account. Senators Jay Rockefeller (D-West Virginia) and John Thune (R-South Dakota) have said they plan to move forward with a negotiated version of the bill for the Senate in September.
— Mari Silbey, special to Light Reading