CableCard is a standard for digital rights management (DRM) that was imposed by the FCC as a result of The Telecommunications Act of 1996. The thinking at the time was it would pave the way for more competition by allowing 3rd parties to compete in the set top box market. Unfortuately the Cable companies and their long time manufacturing partners tasked with developing the standard did not want it to succeed because it would break their mini monopoly on STBs. The end result was an often maligned and plagued standard.
The certification process was overseen by an organization called CableLabs who consisted of members of the big Cable companies. The process was so complex and costly that many did not bother to try. Other manufactures saw the flaws in the standard right away. They knew that even if they made the best STB on the market it would not be compatible with interactive features like TV Guides, On Demand movies, and episode information. This provided the Cable companies with a competitive advantage because their proprietary STB’s were not subject to the flawed standard.
Still, you will find a few CableCard setups today. It remains the only way to get access to encrypted channels without having to rely on a Cable company’s STB. Unfortunatly, you can only get them from the Cable company and most will charge you a monthly fee (Comcast provides the first free of charge and any additional CableCards cost $2/Mo). You lose the interactive features of a set top box as well. CableCards are strictly one way devices so you will give up On Demand movies and Channel Guides. Video streaming is so prevalent through the Internet these days though that this should not be a major deterrent to pursuing a CableCard setup.