Cable-box competition rules completely dismantled

Last Friday, the Federal Communications Commission finally gave up on trying to mandate more alternatives to clunky and expensive cable boxes.

In a unanimous decision, the agency eliminated rules requiring cable providers to support CableCARD devices, which are used today in third-party DVRs such as TiVo. It also officially terminated a four-year-old proposal that would have opened the door to even more cable-box competition.

The FCC’s decision was on some level just a formality. CableCARD has long been a neglected technology among consumers, and the proposal to “unlock” the cable box dates back to the Obama-era FCC, which was much more adversarial toward TV providers than the current commission. But it’s also a sad reminder of how even in the streaming era, cable and satellite TV customers have little choice over what hardware they can use. The FCC has now reiterated that it’s no longer interested in doing anything about it.

CableCARD’s long goodbye

Providing cable customers with more hardware choice was the original goal of CableCARD, a government-mandated solution that let users securely access cable programming on third-party hardware. TiVo’s cable DVRs all use CableCARD, as do some other devices such as SiliconDust’s HDHomeRun Prime and Hauppauge’s WinTV-DCRs.

Until last week, the FCC required cable companies to lease CableCARDs that customers could install themselves, and without any price discrimination that would render them cost -prohibitive. Cable companies also had to report to the FCC on their deployments of CableCARD to ensure they were following the rules. Satellite TV service providers, meanwhile, were never held to similar rules.

The FCC now says those rules are no longer necessary, in part because people can just use streaming devices to access pay TV content instead. The agency claimed that streaming apps from cable and satellite TV providers are now “ubiquitous,” (a dubious claim, as I’ll discuss shortly) and that consumers have “demonstrated a clear preference” for those apps over CableCARD. Only 456,000 CableCARD devices were deployed in retail devices like TiVo as of Q1 2020, down from 509,000 devices two years earlier.

tivoedgehero Jared Newman / IDG

CableCARD allows third-party DVRs like TiVo to work with digital cable programming.

This doesn’t mean CableCARD will vanish overnight. The FCC believes that cable companies will keep supporting the technology, both because they don’t want to lose more subscribers and because millions of their own cable boxes also have CableCARDs inside. (That’s because cable companies were required to use the technology in their own hardware until Congress repealed the CableCARD mandate in 2015.)

Still, it won’t be surprising if cable companies start charging more for the privilege of using CableCARD or making them harder to get for new subscribers. We’ll also likely see fewer CableCARD products on the market going forward. TiVo already seems mentally checked out of the consumer DVR business, and Nick Kelsey, the CTO of SiliconDust, told me via email that while the company will still support CableCARD customers, it’s now investing heavily in ATSC 3.0 hardware, both for cable and over-the-air TV. (Pressed about whether the company will keep making CableCARD products, Kelsey said it’s “still being discussed internally.”)

The unlocked box that wasn’t

Four years ago, the FCC seemed to realize that CableCARD was an insufficient alternative to cable boxes.

Under the FCC’s previous chairman, Tom Wheeler, the agency proposed a new system in which cable companies would have to supply their programming on third-party hardware through internet protocols. The idea was that companies like Apple, Google, or Amazon could integrate cable programming with their existing streaming players, providing freedom from rental fees along with innovative features like voice control.

Naturally, the TV industry hated this idea, and so it came up with a counter-proposal: Instead of letting device makers integrate cable content however they wanted, the industry offered to provide its own apps on practically any streaming device. That way, customers would get to choose their own hardware, but the TV industry would still retain some control.

In the end, neither proposal happened. When Ajit Pai took over the FCC in 2017, sidelining Wheeler’s cable box rules was among his first orders of business. And without the threat of regulation, the industry quietly abandoned its alternative app-based scheme.

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