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Up for Bid on eBay: CableCARDs

The Federal Communications Commission (FCC) -mandated ban on set-tops with integrated security went into effect less than two weeks ago, but the CableCARD, the removable security element found in a new class of "host" set-top boxes, is already starting to show up on eBay Inc. (Nasdaq: EBAY). (See Countdown to 'Seven-Oh-Seven', Boxing Up 'Seven-Oh-Seven' , and Show Me the M-Card!)

A search on Thursday morning revealed two postings for CableCARDs based on the Motorola Inc. (NYSE: MOT) encryption system: The first posting is for a basic Motorola CableCARD, the other is for a Motorola CableCARD affixed with a Comcast Corp. (Nasdaq: CMCSA, CMCSK) logo.

The seller, "motorshops," is offering both CableCARDs for the "Buy It Now" price of $139.99, plus $5.25 for shipping. "This unit is sold as-is… Ships in plastic case," reads the brief description for each posting.

Noting that the card is being sold "as-is" is significant, because, buyer beware, there's little chance it will do a whole lot when a consumer sticks it into a set-top or a digital TV outfitted with a CableCARD interface. The buyer may end up with what amounts to a CableCARD-sized brick.

"It won't work at all," says a digital video cable engineer, when told of the eBay postings. "It won't do [the buyer] any good. You would have to call the cable operator to authorize the card. But I think this [selling of CableCARDs on eBay] is going to happen more and more."

Although a digital TV with a CableCARD slot can tune to unencrypted digital channels even without a module inserted, the television won't be able to access premium services such as HBO, Showtime, and Starz without proper authorization from the operator. In fact, inserting an unauthorized CableCARD into a digital TV may make matters worse because the card "sees" a different channel map.

In the early going, cable operators are directing set-top suppliers to physically mate the CableCARD and to ship both elements as one cohesive unit. Some digital TVs have CableCARD interfaces, but those installations usually involve a costly truck roll by the cable operator, which must also authorize the card.

And the cable operator will be reluctant to authorize a CableCARD purchased on eBay due to the legal issues involved. It's likely that both cards being sold on eBay today are the legal property of a cable operator, and not the person who happens to be selling them.

The seller has yet to respond to questions about how the CableCARDs came into his or her possession.

CableCARDs started to penetrate the marketplace well ahead of the July 1 set-top deadline. In late March, the top 10 US cable MSOs reported they had deployed about 259,000 CableCARD units. (See MSOs Moving Slowly on CableCARDs .)

Most of those cards are supporting a new class of "Plug & Play" digital TVs that can house the CableCARD to authorize premium digital cable services. Although interactive Multistream CableCARDs have been available for some time, digital TVs that support the removable security system are presently one-way, meaning they can't handle video-on-demand or switched digital video applications. A controversial two-way Plug & Play is still being ironed out.

— Jeff Baumgartner, Site Editor, Cable Digital News

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