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FCC drops rule requiring cable companies to provide CableCARDs

The rule was intended to foster competition and innovation in the consumer cable box space, but the FCC admits that never happened.

The rule was intended to foster competition and innovation in the consumer cable box space, but the FCC admits that never happened.

The Federal Communications Commission on Friday quietly dropped a rule that required cable television companies to provide specific digital decryption hardware when requested by customers.

For years, cable companies have been required to provide that hardware, known as a CableCARD, to video subscribers as an alternative to cable company-issued set-top boxes, which often came with antiquated software and rental fees.

The requirement was imposed by the FCC in the late 1990s on the assumption that CableCARDs would lead to a thriving marketplace of third party cable boxes that generated competition for rented set-top boxes offered by cable companies.

That competition never materialized, FCC commissioners conceded on Friday, making the rule unnecessary.

One reason CableCARDs didn’t take off is because few products came to market that supported it. In the 1990s, FCC commissioners assumed television set manufacturers would readily integrate CableCARD slots into their high definition-capable models.

Though some TV set manufacturers did support CableCARD, it was often in expensive high-end models. By the mid-2000s, only around 141,000 CableCARDs were in use by cable TV subscribers in the United States, according to data reported by cable companies and collected by the FCC.

To increase CableCARD adoption, the FCC created a new mandate that required all set-top boxes offered by cable companies use CableCARD technology after 2007. President Barack Obama revoked that requirement when he signed the Satellite Television Extension and Localism Act Reauthorization (STELAR) in 2014.

Since then, cable companies have been able to introduce their own set-top boxes that allow video subscribers to access live and on-demand programming through other means, the FCC noted on Friday.  Consumers have also shifted away from traditional cable TV service in recent years, opting for on-demand and linear streaming services like Neflix, Hulu, Amazon, YouTube TV and Sling TV, the FCC said.

“Consumer demand for retail CableCARD devices never developed as anticipated and such demand has declined steadily in recent years due to the growing popularity of [streaming services],” FCC commissioners said.

The FCC commissioners said cable companies are still required to “provide separable security,” but they said that condition could be met by providing streaming applications that allow cable customers to access programming on streaming devices like Roku, Amazon Fire TV, Apple TV or Android TV devices. Most cable companies have offered these apps for years without government regulation or intervention, the FCC noted, and as long as they continue to do so, they’ll meet the separate security requirement.

For at least a little while longer, CableCARD technology is expected to remain in use by the larger cable companies, though over time companies are likely to shift consumers toward their own set-top boxes and streaming apps.

When the day comes for cable companies to sunset CableCARD support, the move could be a blow to San Francisco-based TiVo, one of the few companies that continues to manufacture and sell traditional set-top digital video recorder (DVR) boxes. TiVo’s $400 DVR, known as the TiVo Edge, only supports digital cable and requires customers to use a cable company-provided CableCARD (a cheaper version of the Edge requires an antenna and isn’t compatible with digital cable service).

The move could also create complications for Silicon Dust, a manufacturer of network streaming TV boxes. The tech company is currently developing a variant of its HDHomeRun device that is compatible with digital cable and allows users to stream or record six channels at once — but only if they have access to a CableCARD.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).