CableCARD limitations could slow TiVo's progress

Limitations--both technical and financial--could put a crimp in TiVo's (Nasdaq: TIVO) plan to "define the future of television," as proposed by CEO Tom Rogers at the Goldman Sachs Communacopia conference. TiVo, Rogers said, is using partnerships like one announced with personalized Internet radio service Pandora and new technology to develop "a great deal of flexibility in our model to meet different demands."

Flexibility, though, is not enough to make the cable industry change its technology to fulfill a TiVo proposal for SDV sessions via one-way CableCARD DVRs. The NCTA, in fact, backing member company Time Warner Cable (NYSE: TWC-WI), says TiVo's idea would cost $16 million to $22 million to implement and another $3 million to $5 million to maintain and operate.

TiVo would like FCC support for using a back channel for SDV as opposed to special tuning adapters that are used today. The back channel, TiVo argues, would save money and smooth product installations. The NCTA says just the opposite would happen and that TiVo's idea would make every CableCARD-equipped device user connect to the Internet to watch TV.

Both arguments have been forwarded for review by the FCC which is looking to develop new CableCARD rules.

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