FCC Kills CableCards

The FCC Commissioners recently unanimously voted to eliminate the rules that require cable companies to support devices that use CableCard technology for connecting to video services. The largest user of the technology is TiVo, but consumers have also been able to buy settop boxes using the technology rather than paying monthly to lease a box from the cable company.

The requirement for CableCards came from the Telecommunications Act of 1996. The congressional authors of that act thought that consumers ought to have an alternative to leasing a mandatory settop box from a cable company. After some industry wrangling, the FCC ordered that cable companies be ready to allow devices with CableCards by July 2000.

The big cable companies hated the CableCard rule and refused to share network security keys with CableCard manufacturers, making it a major challenge for a customer to install a CableCard device. In 2005 the FCC clarified the original order and told cable companies that software had to be separate than settop box devices so that CableCards could connect to cable company networks.

Over time, the software on cable networks has grown increasingly complex, and CableCard technology never became plug and play. Anybody who has ever installed a TiVo box knows the challenge of getting the CableCard software to talk to a specific local cable system. Because of this, and because of ongoing resistance to cable companies to make it easy for CableCards to work, no major market for consumer-owned settop boxes ever emerged. However, even in recent years, there have been sales of roughly half a million CableCard devices per quarter.

The biggest user of CableCard technology is TiVo which has a CableCard in every DVR recorder it sells. The FCC order doesn’t force cable companies to continue to support CableCard technology, but they likely will. Any cable company settop box built before 2015 uses CableCard technology – that was the easiest way for the cable companies to make CableCards work.

However, the FCC eliminated the last vestige of regulation on CableCards, so there is nothing to stop a cable company from cutting off CableCard devices, other than perhaps a desire to not push more households to cut the cord. Cable companies are also free to charge extra to consumers for connecting with a CableCard device.

It’s more likely that CableCard devices will just become technically obsolete over time. Without the FCC’s rules in place, the cable companies might not worry about the impact on CableCards as they update settop box software. This likely spells the end of the traditional TiVo box that could record many hours of video to watch later. Most cable companies offer an alternate to TiVo and allow customers to record and store programming in the cloud rather than on a device in the home. However, TiVo and other companies already started that transition, and TiVo introduced a cloud DVR service in 2018 for a cord-cutter that allows recording of video content that comes from any source such as over-the-air, or from an online service.

Consumers who have used CableCard devices face having to eventually pay the monthly fee for a settop box if they want to keep traditional cable TV service. Ironically, there might be a bigger need for a settop box alternative today than there was in 2000. Largely freed from regulation, the cable companies have raised fees on settop boxes, and I’ve seen monthly rental rates as high as $15 per month.

In the end, the CableCard regulation was largely a bust. It provided an alternative to renting settop boxes, but the cable companies never stopped fighting the idea and never made it easy for consumers to connect and use a CableCard device.