Future of CableCARD
TiVo DVRs require a CableCARD that enables you to receive digital cable channels. About the size of a thick credit card, CableCARDs are supplied by your cable company and enable your TiVo to unscramble their encrypted signal. Once inserted and activated, a CableCARD communicates with your local cable system and delivers all the high-definition and digital cable channels included in your subscription package.
You may be wondering about the future of CableCARDs given that Congress recently passed legislation that will repeal, as of December 4, 2015, the federal mandate for cable operators to use CableCARDs in their own boxes. The so-called “integration ban” banned cable operators from integrating security into the rest of the set top box in an effort ensure that retail set top boxes would be supported by cable operators since all boxes would have to use the same security mechanism.
We expect CableCARDs to be supplied and supported by cable operators for many years after cable operators are no longer required to use them in their own set top boxes for several reasons.
To begin with, the Federal Communications Commission has specifically and repeatedly since 1998 said that cable operators must provide CableCARDs (or as they were first known, “Point of Deployment Modules”) and operators continue to be required by Section 76.1204(a)(1) of the FCC rules to provide a “separable security” solution for retail devices, and to have adequate numbers of Multistream CableCARDs available for each installation. See the details HERE.
This requirement has been in effect since 2000 and was not impacted by the recent legislation. Cable operators provided CableCARDs to retail devices to comply with the separable security requirement before operators were required to use CableCARDs in their own boxes in 2007 and we expect that they will continue to provide CableCARDs to comply with this requirement after they no longer have to use CableCARDs in their own boxes in 2016.
According to the National Cable and Telecommunications Association, cable operators have deployed over 50 million CableCARDs in their own leased boxes so they are unlikely to stop supporting these devices and strand their own equipment investment for many years. See HERE for more details.
Moreover, in July 2014, we announced an agreement with Comcast that resulted in their commitment to continue to provide and support CableCARDs in TiVo retail devices for many years regardless of FCC requirements. Comcast will ensure that CableCARD-enabled devices will continue to have access to all linear channels in all Comcast markets and has also partnered with TiVo to provide Xfinity On Demand to TiVo Premiere and TiVo Roamio customers in all of Comcast’s current markets. Under this arrangement, Comcast customers are able to use a TiVo Premiere or TiVo Roamio DVR purchased at retail or from TiVo.com to enjoy a fully-integrated offering of Comcast’s robust library of Xfinity On Demand content, along with linear television and a range of broadband services, all accessible through TiVo’s user interface and search capabilities.
Longer term, we want to transition with the cable industry to a more modern, IP-based cardless security solution. As part of our agreement, Comcast has agreed to work with TiVo on a two-way non-CableCARD security solution that will enable retail devices to access the full Comcast lineup of linear and VOD programming, whether QAM- or IP-delivered. Furthermore, the legislation that repealed the integration ban requires the FCC to form a technical advisory committee by mid-January 2015 to identify and recommend a software-based downloadable security system to promote the competitive availability of retail devices to receive cable programming. On December 4, 2014, the FCC released a public notice seeking nominations for the Downloadable Security Technical Advisory Committee (DSTAC). See details HERE.
The DSTAC must file a report with the FCC by September 4, 2015 to detail its findings and recommendations. TiVo has submitted a nomination and hopes to participate in this process.