Continued from page 1

That led to the development of the “cable card.”

The credit-card-sized devices house the descrambling function and plug into competing boxes, such as the new TiVo Series3, and digital cable-ready televisions, which have a card slot.

So far, there has been little competition for competing set-top boxes. Only about 260,000 cable cards have been deployed, according to the NCTA, and they don’t always work well.

The second phase begins July 1, when cable providers are banned from providing new boxes that integrate both the security and navigation functions. Existing subscribers can continue to rent their current boxes.

The new boxes will have to use the same cable-card technology as the competition. The FCC is hoping that forcing cable companies to do that will motivate them to make sure the cards work like they are supposed to.

Once cable companies have to use the same security technology as their competitors, the hope is, they will experience fewer problems because it will be in the cable companies’ interest to keep them free of glitches.