Cable Companies Lose Round in CableCard Battle

The cable industry suffered a blow on Friday when a federal appeals court upheld the Federal Communications Commission's mandate requiring cable operators to distribute a technology called CableCards, which will allow digital cable subscribers to get rid of their cable set-top boxes.

The U.S. Court of Appeals for the D.C. Circuit unanimously supported the FCC's "integration ban," which requires cable operators to separate encryption functions from basic decoding capabilities in their set-top boxes.

Separating these functions allows cable customers to plug their cable line directly into a TV set without the need for a set-top box. The CableCard device is about the size of a thick credit card, and fits into a special slot built into digital TVs and a growing number of consumer electronic devices, such as TiVo's digital video recorder and most HDTV sets.

The court's decision should move cable operators a step closer to finally offering a service that allows consumers to simply plug a card into a device to get cable TV service. "Today's opinion sets the record straight: Consumers are entitled to a broad array of products that can connect to cable systems featuring innovative new features for competitive prices," Gary Shapiro, head of the Consumer Electronics Association, said in a statement. "In the wake of the court's decision, we are hopeful that cable will stop its foot-dragging and comply with the law for the benefit of consumers."

Read more about the ruling in the CNETnews.com article Cable companies lose round in CableCard battle