Sorry for the delay - here's some more reply.
Much of the talk recently has been to kill cable card entirely, and have the software that does the authentication, encryption, etc be running in a Java VM on the device itself. This means that the cable company does not need to send you a set-top box, (if you want one you just buy one at any store), or even a cable card. Your box just downloads the authentication and decryption program for the cable network and runs with it.
I have heard about this, but I don't think that it is something will happen in the near term, simply given all the issues happening now. There is a need to roll out tru2way (electronics manufacturers like it, the FCC demands it) and the analog cutoff. Getting CableCards and tru2way working smoothly will take time. All the hardware for those two cut overs is in the pipe now, and it will need CableCards. So I think that is a ways off.
The idea is good for everyone - one less piece of hardware. Less hardware is good for the electronics manufactures and the cable company. It's good for consumers because it is one less thing they have to setup. I'm not sure of the technology for the idea however. I personally haven't seen any of the details of how the java-based security would work. Such code would have to be protected (by the network manufactures), but how is an open question.
Anyway, if the java-only security does happen, we move into a policy area - what would a cable company allow on its network. At that point a compliant stack would be all that is required, allowing the widest number of participants. I suspect that each cable operator would build a list of "validated" stacks that it would allow. How it would enforce that is unknown to me.
Then why does CableLabs mandate that CableCards be installed by special technicians, who put the card in the slot, then read some numbers into a phone?
You've hit the nail on the head there - CableLabs. The major cable companies make up CableLabs, so that policy is something that would be in the best interest of the cable companies. As I posted above, I've read some things on the 'net that suggest cable operators are having difficulty with CableCards, so having the technician on site is a good idea. In the best case, it is as you describe - reading numbers to someone at the headend. In the worst case, check Anandtech for a review of the ATI CableCard device.
