Microsoft Corp. and Cable Television Laboratories Inc. (CableLabs) today announced they have reached an agreement that will allow Microsoft and PC manufacturers to bring to market digital-cable-ready (including HD) Windows Media Center-based PCs by the holiday 2006 time frame.

These Media Center PCs, capable of supporting a CableCARD module, will allow consumers to enjoy one-way cable programming, including premium high-definition cable content, on their personal computer and throughout the home on compliant network-connected devices, such as Xbox 360, while protecting cable operators' investments in high-value content in a digital environment. Digital HDTV provided by the cable companies to a Microsoft XBox 360 console or Windows MCE PC? Break out the popcorn - it doesn't get any better than this! Surprisingly, I haven't seen much coverage of this news.

In case you don't know, CableCARD is a new technology that gives you the option to connect to cable TV
without a set-top box on the new generation of Digital Cable Ready devices. So for example, you can access analog, digital cable, HDTV and premium cable channels like HBO, Cinemax and more - without a digital set-top box.

I have to use my digital set top box connected to my Windows MCE 2005 PC using an S-Video cable. I then have to use an IR Blaster connected to the MCE 2005 PC and placed in front of the set-top box in order to use the MCE PC's remote to control channel changing. This results in slow channel surfing, so a CableCard helps solve this "kludge". It does have some limitations though. CableCARD won't work with pay-per-view (PPV) offerings by your cable provider and the interactive menus won't be available - it's pretty much a one-way technology.

Cable providers have obviously come to the realization that their customers are spending less time watching cable content and more time on their PCs, or gaming consoles, such as the XBox 360. With the impending launch of the XBox 360 which will probably result in 50-70 million worldwide XBox 360 users, that's a huge market potential for this product. Also, add in the 4 million Windows XP Media Center Edition licenses.

Although, I wonder if this CableCARD module is "free" just as long as you sign-up for a digital cable subscription or if you are going to slap you with another monthly fee plus make you pay for the hardware. I have a Windows Media Center 2005 PC myself with a built-in analog TV tuner card and I know I wouldn't pay my cable provider for an additional tuner card even if it is digital. They'll probably follow the traditional "rental" model and just charge users a rental fee for the hardware. Still can't believe they used to charge me $2/month to "rent" a remote control.

In any event, Microsoft is working closely with CableLabs to document final approval of Windows Media Digital Rights Management (DRM) as a content protection technology for OpenCable products that receive one-way cable content under the terms of this agreement.

“This agreement is an important milestone for our customers who want access to high-definition digital cable content on their PCs and a major step toward enabling a solution for the delivery of that content,” said Joe Belfiore, corporate vice president of the Windows eHome Division at Microsoft.

“The cable industry is very interested in having the PC serve as another means to allow consumers to enjoy cable programming,” said Richard R. Green, president and CEO of CableLabs. “By working with Microsoft and the IT industry, we have come up with a solution to enable consumers to enjoy the wide range of entertainment options they want.”

“This agreement carefully balances the need to preserve the flexibility of the personal computer for consumers with the need for cable operators to be confident that the hardware and software shipped with compliant Media Center PCs will function like a CableCARD-enabled digital television,” said Glenn Britt, chairman of CableLabs and chairman and CEO of Time Warner Cable.

The agreement is the culmination of more than two years of extensive evaluation and technical reviews performed by the two entities under the CableLabs OpenCable process to develop specifications and test suites for the new solution.

The specified OpenCable architecture allows for multiple DRM systems to be used in the device and ensures content providers of protected delivery of content to the PC. Microsoft Windows Media Digital Rights Management is the first major DRM system to complete the due diligence necessary for approval by CableLabs.

The OpenCable project will continue to play an important role as the new agreement moves forward, allowing the cable industry to work closely with the consumer electronics and IT industries to innovate rapidly on the new specifications developed by Microsoft and CableLabs.

CableLabs will host interoperability events to enable vendors working on products based on these specifications to test products in CableLabs facilities and conduct more formalized certification testing. More information about the OpenCable project is available at www.opencable.com.

The cable industry supports more than 370 models of digital televisions manufactured by 22 companies that display one-way cable content via CableCARDs.