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CableCARD Integration Bill Would Have a Chilling Effect on Third-Party Devices, Interest Groups Say

Most of the language in a complex satellite and cable broadcast bill working its way through Congress deals with issues the average pay-TV viewer won’t see up close, ranging from retransmission negotiations to media ownership. But one section of the measure would affect a piece of hardware that sits in the TV tuner of every viewer’s cable box — and the makers of third-party units like TiVo say the bill is about to make those consumers’ lives much harder.

Every cable box, as well as all TiVos and Digital Video Recorders designed to work with cable TV, contain a credit-card-sized device called a CableCARD that allows the TV tuner to decrypt the incoming signal so viewers can watch programming.

Since 2007, cable operators have been prohibited from integrating the CableCARD technology directly into the hardware of the tuner boxes they lease to customers, as part of an effort aimed at leveling the playing field with other tuner manufacturers. Satellite providers were exempted from the requirement.

For years, cable operators have lobbied hard, filed lawsuits and petitioned the Federal Communications Commission to lift what’s known as the “set-top integration ban.” Now they have the momentum and the language they want in what’s seen as a must-pass bill.

And while manufacturers of third-party units like TiVo have tried taking their case to Congress, thus far they seem to be on the losing side of the argument.

Last month, Thomas S. Rogers, TiVo’s president, told Senate lawmakers that dropping the ban without replacing it with a new standard “is not what’s in the best interest for cable subscribers and it’s not even what’s in the best technological interest of cable operator members.”

Even companies like TiVo say they aren’t looking to keep physical CableCARDs around. But they do want to see them replaced — with a decryption software standard that all set-top producers could integrate into their machines.

The lynchpin for maintaining a retail tuner market, Rogers said, is making sure that the tuners are able to operate under the same set of standards as the cable companies.

“We get the fact that there’s a better approach than CableCARDs,” he said. But he added that the problem with the current House satellite and cable TV bill is that it would “repeal the CableCARD standard before a new standard is in place, which in our minds will kill any ability for a new standard to emerge.”

Different cable providers would use different, proprietary decryption standards and the national third-party market would die, he said.

Lawmakers haven’t expressed any willingness to change course, though. Just two weeks ago the House Energy and Commerce Committee approved the bipartisan bill (HR 4572) that Rogers warned about, which would extend for five years the Satellite Television Extension and Localism Act (PL 111-175), known as STELA, that would eliminate the ban.

Chairman Fred Upton, R-Mich., said the measure “repeals unnecessary regulations and allows for greater innovation in cable set-top boxes,” and the language has Democratic backing as well.

The cable industry, meanwhile, has criticized the integration ban for everything from the exemption for satellite providers to the cost of installing physical cards to the extra kilowatt hours of electricity the cards use.

Michael Powell, the former FCC chairman and current head of the National Cable and Telecommunications Association, told lawmakers this year that the FCC stepped beyond its authority when it ordered the integration ban.

“The integration ban has not stimulated a consumer appetite for third-party devices,” he said. “Today, over 45 million leased boxes are using CableCARDs while a mere 600,000 have been requested for retail devices.”

Powell noted that the House bill would not kill the CableCARD decryption standard — just the requirement to install the physical cards in boxes.

Rogers, though, said some cable companies have tried to subvert those requirements, denying some channels to customers with third-party boxes, even if they have a CableCARD. The current standard is insufficient, he said.

“We need a single standard,” Rogers said. “And the industry could easily come up with one if policymakers said, ‘Figure this out. Figure it out quickly.’ ”

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