What is going on with CableCARDs?

CableCARD, which most cable companies must start renting out on July 1 because of an FCC mandate, will let a variety of store-bought devices tune in premium cable channels. Simply by slipping the card into a slot on the back of any enabled equipment, such as a digital video recorder (DVR), a media-center PC, or a flat-panel TV, subscribers can get premium programming. It sounds too easy and interesting.

The problem is that cable companies, telephone outfits, and consumer-electronics makers are back at it, fighting over your TV set. The little credit-card-like device could determine how much money these companies collect when viewers in the near future can start downloading most of their premium movies and videos from the Internet. All these companies are throwing in all kind of extras to get you to use their gear, or not use the opposition's. For instance, TiVo Inc. is offering the Amazon.com Unbox movie-download service. Comcast, Time Warner and other cable providers are likely to do everything possible to keep you from buying a competing device at a store. New cable customers have to call them to get a CableCARD, no matter where they plan to use it. And, of course, cable providers are working hard to point to the downside of using separately purchased equipment. Some cable providers may charge as much for a card as you now pay to rent a box.

What is more intriguing is that equipment different from Set-Top-Boxes (STB) provided by cable companies such as DVRs and TiVo’s, doesn’t allow cable customers to watch on-demand shows. In fact, cable companies will license software to let such equipment makers offer on-demand and pay-per-view, but only if they agree to display prominently the cable provider's logos, ads, and programming. That's a deal-breaker for many companies that are trying to establish their brand and make money off downloadable content.

Makers of DVRs and other gear see CableCARD as the future. It would provide vastly more choices as companies strike deals to allow movies and other content to be pulled directly from the Internet. If that happens, it would be the end of cable. Honestly, I don’t see happening any time soon.