Today, July 1, marks the day the US Federal Communications Commission (FCC) has mandated that set-top boxes are separated from the security mechanisms that determines which channels are descrambled. The security comes in the form of a CableCard that is inserted into the set-top box. Rather than cable TV providers renting you a set-top for US$4 to $5 a month, now you can buy a set-top from a retail store (when it becomes available) and simply activate a CableCard from the cable TV provider to (first card is free, additionals $1.91 each).
I applaud this move towards providing a new era of consumer choice. By separating the set-top box from the mechanics that determines which channels are descrambled, a customer is able to purchase a set-top box from anywhere (say BestBuy) and keep the same box even if the customer moves or switches television providers. This also gives set top box manufacturers more latitude in bringing alternate forms of video to the TV. Expect long-form Internet TV providers like Joost and Babelgum to be integrated into set-top boxes soon. Much like AppleTV has done, expect even short-form TV content such as YouTube to be on set-top boxes.
In the short term, the cost for consumers will go up because the simple set-top box will now have an added CableCARD module. However, this “integration ban”, as this is sometimes called, will:
- create a new retail channels to reach customers.
- create an opportunity for new manufacturers such as ADB and even Tivo to enter the set-top box market.
The latter will create enough competition in distribution (retail and TV service provider), manufacturing, and usage choices (purchase vs. renting), that value for consumers will go up (overall prices may increase as set-top boxes integrate Internet TV).
This is a great move for consumer and don’t let your cable provider make you think otherwise.