CableCard Mandated

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The other major issue is that the current version of CableCard technology does not allow for two-way communication between the device and the cable network. This means that interactive services like video-on-demand and pay-per-view can't be enabled through a CableCard slot on a TV or a set-top box bought at a retail store. This is a major issue for companies like Digeo that want to sell their devices to high-end cable subscribers. Video-on-demand is one of the fastest-growing services that cable operators offer. At the end of the first quarter of 2007, roughly 30 million homes used video-on-demand, according to market research firm SNL Kagan. Operator Comcast said that roughly 75 percent of subscribers that could get VOD used the service. "Without two-way functionality that works, it negates some of the advancements that new set-top box makers can offer consumers," said Ian Olgeirson, senior analyst at SNL Kagan. "They could deliver over-the-top content via the Internet, but I think that market is still a long way off."