In a filing yesterday with the FCC on the current status on CableCARD deployments the NCTA revealed that there have been a total of over 374,000 CableCARDs deployed for use in Unidirectional Digital Cable Products (UDCPs), such as the TiVo HD, by the ten largest cable MSOs, which cover roughly 90% of US cable subscribers. That may sound like a lot, but in their last filing 90 days ago in June, they reported over 372,000 CableCARDs for the same ten MSOs and 90% subscriber base. That implies that only 2,000 CableCARDs have been deployed to UDCPs in the past three months by the top 10 cable MSOs - combined. That’s nothing. It would also make me wonder a bit about the sales of the TiVo HD, since I’d expect nearly all of those to have at least one M-Card CableCARD.

That is, of course, if the numbers are true - and they may not be. See the table below and especially the first footnote¹. Comcast’s numbers for September are estimated to be 10-15% lower than actual due to an internal error. We could be looking at an increase of more than 34,000 users instead of only 2,000!

While 34,000 would certainly be better than 2,000, it still isn’t really setting the world on fire. Maybe the M-Card is a ray of hope in those numbers - if customers who previously used two S-Cards are trading them in for a single M-Card on devices like the TiVo HD, it would result in a lower cumulative number. Still, I don’t expect that’s a huge number either.

This is not to say that the total number of CableCARDs in use is that small, not at all. Since the FCC’s ‘integration ban’ went into effect on July 1, 2007, forcing cable MSOs to begin using CableCARDs in their own STBs, those same ten MSOs have deployed over 7,800,000 CableCARDs in their STBs. So in less than fifteen months they’ve deployed more than twenty times the number of CableCARDs as have been issued for 3rd party UDCPs in the four years they’ve been available.

The integration ban was supposed to force cable MSOs to ‘eat their own dog food’ and thereby improve support for CableCARDs. The idea was that this would help foster the overall CableCARD market. Better support from MSOs would lead to more products, which would mean more 3rd party UDCPs in the field. For the most part, this hasn’t happened.

Why not? Well, I think I can sum it up in one brand name: tru2way. Starting late last year, and getting an official launch at CES in January, OCAP became tru2way and marked a push to get consumer electronics companies on board. Then starting with Samsung in May, followed by a larger push by Sony later that month, CE vendors started jumping on the tru2way bandwagon.

What does this have to do with slow CableCARD adoption? Well, these same CE vendors have held off on releasing UDCPs while they work on tru2way-enabled devices. Why invest in developing and marketing a unidirectional product when you’re going to obsolete it with a two-way product in a year? The first tru2way products are starting to trickle out, and there will probably be a bunch of them on display at CES in January. So I think the push for tru2way was a major contributor to lax CableCARD pick up. Vendors just haven’t been releasing CableCARD-enabled products so there aren’t many options for consumers, which naturally means not many cards are being deployed. Really the only major CableCARD product out there right now is TiVo. CableCARD TVs are thin on the ground. CableCARD-enabled Media Center PCs have had anemic sales. And Digeo outright canceled their Moxi CableCARD HD DVR.

CableCARD was slow out of the gate, and by the time MSOs had the infrastructure worked out vendors were already looking toward round two with tru2way and they just decided to sit round one with UDCPs out entirely. The deployment of SDV and the need to develop a Tuning Adapter, and to support it, was very likely a factor in that as well. I don’t expect to see any real pick-up in CableCARD utilization until a sufficient number of tru2way devices are available to consumers, and then I do expect to see a real uptick.

The filing also has information from several MSOs on their CableCARD pricing and install practices. To compare June to September:

¹Comcast states that their September number may by low by 10-15% due to internal reporting errors.

The count for this reporting period of CableCARDs installed in one way retail devices in active customer homes is estimated to be 10-15% lower than the actual number due to internal Comcast reporting errors that are the result of an internal Division reorganization during the reporting period. The next quarterly report will more accurately reflect the actual count.

Since Comcast has such a large installed base this could be the reason for the seemingly small total uptick. The other four combined yield an increase of 3,429. Comcast’s apparent drop of 1,383 drags it down. But if they’re short just 10% they would actually have an increase of 20,334 users. And 15% would mean an increase of 31,192! So we’d be looking at a total increase of 23,763 to 34,621 - rather more than around 2,000. And that’s just from these five MSOs.

²Comcast allows self-installs in at least some areas - 68% used truck rolls, 32% were self-installs.

³First card is free, fee for additional cards.

⁴$10.43 if install is included with other services, $25.14 if purpose visit.

⁵0.2% of Time Warner installs are self-install, which is negligible.

⁶The average is $2.26, but they report most divisions are $1.75 - which must mean the remaining divisions are rather higher to bring the average up.

According to TWICE, Digeo is working on two Moxi cable DVRs. The first will be distributed through Charter later this month, to also be followed by ‘a second MSO’. It’s only four months after they announced this the first time. Back in May at The Cable Show Digeo announced that Charter would carry the Moxi 3012 HD DVR by the end of 3Q08. So they have less than two weeks to meet that goal.

Of course, back in January Digeo’s then COO, now President, Greg Gudorf told me that their cable DVR would ship by the end of 1Q08. So we’ll see how this roll out goes.

The other Moxi DVR will be a CableCARD consumer product sold at retail and expected to ship in January. That will be a year after Digeo suddenly canceled all of their planned consumer products, just days after showing them at CES and talking up the launch plans.

Details on the consumer product are thin, I’m presuming they’ll have something to say about it at CES in January. Of course, they did last year too. Unsurprisingly it will be a CableCARD-enabled DVR, and it will not be tru2way-enabled. It sounds like they’re pitching all the same features they were on the canceled products - music and photo access, content partners, home control integration, etc. For music content Digeo has lined up FineTune, Rhapsody and Sirius and they have Flickr for photos.

The one new item that I found interesting is that they’re implementing DLNA support. I’d like to see more products supporting DLNA, standards are good and DLNA has growing support across a number of products such as the Xbox 360, PS3, HP Media Smart TVs, Blu-ray players, etc.

Digeo is also apparently still working on their Moxi TV for PC software, which I was told was in beta and close to release at CES 2008 in January. Though according to TWICE they have it running on XP, Vista, and Media Center versions of Windows now, and not just XP as at CES. No word on when it might be available to consumers.

Gudorf told TWICE that Digeo is working on future products for post-July 2009 which will support tru2way. Digeo signed the tru2way accord in June. But I’m not even going to devote any mental energy to that until Digeo manages to ship something to consumers.

Digeo started talking about launching new consumer products two years ago, in September 2006. (Which I picked up, amusingly enough, from an article in TWICE.) I talked to them at CES 2007 where they were showing mock ups and no real products with the promise of shipping later in the year.

They insisted they’d ship in time for the 2007 holidays up through September. (Oddly enough, another article from TWICE. Is covering Digeo a September tradition for them?) Then in November they admitted they weren’t going to ship in 2007.

Then I talked to them again at CES 2008, and they were showing off some of the same mock-ups they’d had at CES 2007, as well as some actual products. Just a week later they canceled the products and laid off nearly half of their staff. Digeo’s Gary Gudorf talked to me the next day to offer clarifications, including that their cable MSO product would ship by the end of 1Q08, which it didn’t.

We didn’t hear anything else until April when details on the cable product emerged. And then in May they exhibited at The Cable Show and issued a press release announcing Charter’s intention to carry it. In June Digeo signed the tru2way accord.

And now here we are in September again, two years after they first announced their intention to enter the consumer DVR market, and they’re promising a box ‘expected to ship in January’. You’ll pardon me if I don’t hold my breath. Assuming they do exhibit at CES in January, I’ll check out their offerings, again. As I said when I covered them this year, I think they have some good design points. But none of it matters until they manage to get a box on retail shelves.

I hear it’ll come bundled with Duke Nukem Forever.

Tipped off by EngadgetHD.

EDIT: This got some attention in AVS Forum, including from a Charter rep, who wasn’t encouraging:

Ironically yesterday I got whispers from a contact in St Louis who works with someone who’s got a beta 3012 (Don’t get hopes up, so far it seems only a few elite managers and tech ops people in St Louis have gotten to beta this unit)

Apparently it’s still got quite a few bugs, which I think is very odd, given really all they needed to do was improve on the existing hardware and leave the software alone.

At any rate I don’t expect to see them in 2 weeks, heck at the rate things are going, I’d consider us lucky if we see them before Q3 2009

I’d say I’m surprised or that this is unusual so close to a planned release - but frankly this is what I’ve come to expect from Digeo. They’ve had one product actually make it to market, the BMC9000 STB series from Motorola running the Moxi software. But that launched back in 2004 and has been out of production for a long time now. At its peak it only reached around 400,000 users, and the number of Moxi uses is believed to be much smaller now as units have been replaced with newer, non-Moxi DVR models. Unsurprisingly the main MSO to use Moxi was Charter, which, like Digeo, is controlled by Paul Allen. But even with it being ‘in the family’ Charter’s use of Moxi was minor.

Moxi’s history since they were acquired by Digeo has been one of failed execution. Early on Moxi was on their way to being a competitor in the consumer DVR space and they had some cutting edge plans, then Digeo acquired them and refocused them on cable MSOs instead of retail. Digeo acquired Moxi way back in 2002 - and in six years what have they done? One product which never achieved more than minor market penetration, and is now well out of date and discontinued. Aside from that they have a history of press releases and announced partnerships, awards won for products announced but never shipped, staff layoffs, and repeated product delays and cancellations. If they didn’t have Paul Allen backing them I don’t see how they’d still be in business. Digeo needs to ship a product, a good product, to significant numbers of users, if they want to earn consumer trust again.

According to this post at The Green Button by Charlie Nilsson, Program Manager for Microsoft eHome Division, Microsoft is working on support for the Tuning Adapter in Windows Media Center to allow MCPC users to handle Switched Digital Video. The Tuning Adapters were approved by CableLabs in July and TiVo has already deployed support. Since the TAs are USB devices, it might seem like PCs would be amongst the first platforms to support them. However, it sounds like it may be a while yet:

Microsoft recognizes the impact of this technology on our customers and partners. We are working to enable support for the CableLabs SDV Tuning Adaptor for Windows Media Center Digital Cable Tuners, ensuring that Windows Media Center users will be able to access switched content.

While we have no further details at this time, we will keep you updated as more information becomes available.

While it is good news that MCPC users will be getting SDV support, I’m sure the users with cable systems using SDV would like to see it sooner rather than later.

The CableTechTalk blog has a very nice post up today about CableCARD and tru2way. While the blog is run by the National Cable & Telecommunications Association (NCTA), and the post in question was written by Paul Rodriguez, Director of Online Content for the NCTA, so you might expect some editorial slant, I thought it was a nice, factual article. It provides a concise history of the development of CableCARD and tru2way, as well as correcting some of the common misconceptions. I think it is worth a read.

The TV Barn blog has posted a letter Time Warner Cable sent out to customers in Kansas City, MO. It announces that they intend to begin migrating “lesser-viewed channels” to SDV beginning August 20, 2008. They’ve done a fairly decent job providing information and being non-alarmist, it looks like they’ve cribbed from a recent letter sent out by Cox. The TWC letter reads, in part:

The current generation of CableCARD-compatible devices sold at retail are only capable of accessing our one-way services. They were not designed to be compatible with SDV, which is a two-way service. As a result, once the channels listed above are migrated to SDV, they no longer will be available to UDCPs. However, Time Warner Cable has worked with the rest of the cable industry and TiVo Inc. to develop an external device called a Tuning Adapter that will allow certain UDCPs, including TiVo Series 3 and TiVo HD digital video recorders, to access channels delivered using SDV.

We expect to be able to offer Tuning Adapters to customers with compatible UDCPs later this year. At that time we will provide you with additional information on availability and device compatibility. It is currently contemplated that the Tuning Adapter will be provided at no additional charge. Until the Tuning Adapter becomes available, however, a Time Warner Cable digital cable set-top box will be required to view channels migrated to SDV – even if you own a Tuning Adapter-compatible UDCP. In addition, certain non-TiVo UDCP models may not work with the Tuning Adapter.

Since The Tuning Adapter is expected to be available starting in July, perhaps they’ll have them available before the August 20th SDV migration. Though one has to wonder, with the Tuning Adapter planned to be available soon, why not just wait to perform the SDV migration until they have them available? Why risk inconveniencing and possibly alienating customers? Corporations move in mysterious ways.

Expect to see more and more of these letters over he coming months as more cable MSOs turn to SDV to add capacity for the growing volume of HD content, as well as additional channels.

It isn’t just what you say, it is how you say it. And Comcast seems to be aiming for FUD (Fear, Uncertainty, and Doubt) with a recent statement to CableCARD users in Florida:

Our records indicate that you have a Motorola Cable Card(s) that will no longer be compatible with our upgraded cable network as of May 31, 2008. Exchange your Motorola Cable Card(s) into an office today and we’ll give you HBO free and a converter free for 3 months.

I would bet good money that this means they’re implementing Switched Digital Video (SDV). But instead of explaining that, they’re trying to scare CableCARD users into returning them and switching to a cable STB. Another, far less likely, possibility is that they’re switching the head end to Cisco/Scientific Atlanta, or something incompatible with Motorola CableCARDs, but even if that were the case they’d be able, and required, to issue cards compatible with the new head end.

Either way, I think this is a nasty trick on the part of Comcast. They’re required by FCC mandate to support CableCARD, but they’ve phrased things in a way that is designed to make CableCARD customers think they’re out of luck and must switch to a cable STB. That’s bullshit. If they are switching channels to SDV, then what it would mean is those channels would no longer be available to users of UDCPs, like TiVo - at least until the Tuning Resolver is available later this year. But it does not mean the device, and the cards, are ‘no longer compatible’. Dirty tricks like these are why people have such low opinions of the cable industry. If you’re a TiVo (or any other CableCARD device) user and you got this flier from Comcast, don’t be scared into giving up your CableCARDs. And if anyone can scan it and send me a copy, or even fax or snail me a copy, let me know. I’d love to post it.

Thanks to Zatz Not Funny for the heads up.

EDIT: Reader Joseph Moran left a comment at Zatz Not Funny stating that this is in fact the issue I felt was less likely - they’re switching head ends:

I’m a Comcast Customer in SWFL and got one of those notices. Evidently, it’s not related to SDV; they’re switching from Motorola hardware to Scientific Atlanta equipment. This is supposedly because the Comcast sub-region I’m in used to be operated by Time Warner, so it needs to sync up with the other Comcast regions in the area (what they call “Classic” Comcast).

Which really changes very little - it is still a dirty trick, making it sound like CableCARD customers must convert to a cable STB. If Joseph is correct, then it does mean existing Motorola CableCARDs will stop working, but users should not have to give up CableCARD completely, but rather swap the Motorola cards for SciAtl cards.