Worst of Both Worlds The set-top box deregulation deadline is approaching fast. You would think that forcing the cable operators to "decouple" their boxes from their service would be good for the consumer. Unfortunately this milestone in communications is creating the worst of both worlds. First a tiny bit of history. In 1966 the FCC ruled that AT&T had to allow Carterfone and any other third party manufacturer to attach their products to AT&T's lines. This gave rise to answering machines, fax machines, cordless phones, modems, and more. In this spirit, Congress passed a law in 1996 that called for cable operators to allow third party products to access their "multichannel video programming." After several extensions the day has finally arrived and on July 1, 2007 consumers will be able to chuck their cable boxes in favor of any device capable of using a CableCARD which is a small credit card sized device that unscrambles premium channels. So whats the problem? Well for one thing the first generation of CableCARDs lack some basic features like Pay Per View, Video on Demand, two channel simultaneous decoding (no PIP or watching one channel while recording another), and most require a technician to show up at your house (sometime between 2:00 and 5:00 - haha) to match up the card with the device (in other words, no moving cards around). And don't expect a lot of cooperation from the cable operators. As you might guess they're not highly motivated to give up their monopoly on $6/month rental boxes. Speaking of the boxes will everyone who is happy with their cable box please raise their hands. Don't all raise your hands at once. If yours is like mine, it's slow to respond to remote commands (when it does respond at all), has a less than friendly user interface, and lacks most of the features found on Tivos and other cool set top products. On the one hand you've got this $6/month mediocre device that is not going to get better over night and on the other hand the liberated TV running off a feature-challenged CableCARD that you still have to pay for and have installed. What a grand choice! Future Looks Brighter Don't despair, there does appear to be some hope for the future. I'm not holding my breath but there are some things to look forward to possibly later this year or next. A second generation CableCARD may allow two-way communication which will enable PPV (pay per view) and VOD (video on demand). Better yet a downloadable permission technique called "Downloadable Conditional Access System," (DCAS) could eliminate the need for CableCARDs or set-top boxes altogether. Looking for an opportunity in all this deregulationis Microsoft who, along with computer manufacturers like Dell and HP, willnow have an easier time replacing the set-top box with a computer. Insert a CableCARD into a multimedia PC and voila, you're watching HBO or ESPN in high definition through your PC. Hey, maybe there's hope for Media Center after all. Expect more set-top boxes to emerge gradually over the coming months likeDigeo's Moxie, a high end DVR and cable box combo that will be competing with Tivo Series 3. Meanwhile, Sonyis expected to ship it VGX-XL3 Vaio PC withCableCARD and Blu-ray DVDrecorder. Motorola has announced amulti-streamCableCARD(M-Card)-based HD DVR, the DCH3416.

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