CableCARD: Still a Flop

by on September 28, 2006 · 8 comments

Ars covers an FCC filing by the National Cable & Telecommunications Association concerning the uptake of CableCARDs. The CableCARD has not proven a hit with consumers, to put it charitably. So far, 200,000 have been deployed, out of 73 million households with cable TV service. That’s about a quarter of one percent.

This is not a surprise. CableCARDs incorporate two of my least favorite things–digital rights management and government technology mandates–so I might be biased, but I have trouble seeing why anyone would want one. The cards were mandated by the FCC as a way of creating a competitive market in set-top-box replacements. The cable industry likes its set-top boxes, resents the FCC’s attempts to abolish them, and so they’ve done everything they could to resist their roll-out. Their primary weapon has been foot-dragging. They released a first generation CableCARD spec that was were crippled by limited functionality. More than a year after the first generation was unveiled, it remains unclear when the second generation will become available.

This puts the FCC into a quandary. Originally, it was going to ban integrated set-top boxes this year, but it extended the deadline when it became clear that most consumers would still be using them at that point. So far, the 2007 deadline remains on the books but it’s extremely hard to imagine that CableCARD deployments will go from 200,000 to 73 million in less than a year. It’s especially true because many TV sets in stores now don’t even have a CableCARD slot.

The FCC’s CableCARD mandate is the worst kind of government micro-management of private industry. Like the FCC’s “local loop unbundling” mandates on the Baby Bells and the “deregulation” of California’s power industry, government bureaucrats have decided they want to increase “competition” in a heavily regulated industry. But rather than repealing regulations that are currently acting as barriers to entry in that industry (such as liberalizing the cable franchise system) they’ve dreamed up a highly artificial “market” in which firms are only allowed to compete in ways carefully circumscribed by the regulators. Incumbents invariably find ways to subvert or co-opt such regulations, with the result that they wind up simply forcing the incumbents to jump through a lot of hoops and wasting a lot of money on lawyers and lobbyists.

In this case, it’s not obvious that consumers want or need a competitive market in cable box replacements. There’s a lot to be said for the simplicity of having your cable box provided by your cable provider. Forcing consumers to buy that functionality from a third party is likely to create confusion for those consumers who just want their cable service to just work.

The fear, I suppose, is that the cable industry will incorporate more and more functionality into its set-top boxes while refusing to allow interoperability with third-party devices, eliminating consumer choice in third-party devices like the TiVo. But a better way to deal with that would be to repeal the DMCA and other legal restrictions on reverse-engineering. That way, third parties will be free to develop compatible products with or without the assistance of the cable industry.

Technological process doesn’t happen by government edict. If you order an industry to develop a product against its will, it shouldn’t be a surprise when the result is crap.

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