Blankom Antennentechnik GmbH, a headend and broadband gear supplier headquartered in Germany, is targeting small- and mid-sized cable operators in the U.S. with a digital video delivery package that will enable them to compete with broader offerings from DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH)

Blankom, which has sold more than 10,000 headends worldwide and has customers such as Kabel Deutschland GmbH on its books, entered the U.S. cable market two years ago. Its local division, Blankom USA LLC , has been selling a range of components, such as ASI (Asynchronous Serial Interface)-to-IP converters, to Tier 1 cable operators through distribution partners such as Mega Hertz and Adams Global Communications LLC. However, it is complementing that with a grander strategy focused on smaller operators that require full digital upgrades.

For those smaller players Blankom is pitching an integrated platform based on the vendor's headend components and gear based on Digital Video Broadcast (DVB), an "open" system popular in Europe that has attracted more than 200 set-top box makers. The version Blankom is offering in the U.S. couples its own digital headends with Homecast Co. Ltd. set-top boxes, the Conax AS conditional access system, and the Great Lakes Data Systems Inc. billing system.

That end-to-end solution enables operators to source their digital programming from any content supplier, including the Comcast Media Center (CMC) , EchoStar Technologies LLC, and Avail Media Inc. , says Gerhard Franz, president of Blankom's U.S. operations.

But Blankom has its work cut out: It's entering a market that has become increasingly crowded with suppliers and integrators that are tailoring their digital offerings for smaller MSOs looking to close the gap with satellite TV rivals. Others targeting this particular market include Evolution Broadband LLC , Transparent Video Systems Inc. (TVS) , and Beyond Broadband Technology LLC (BBT) , as well as major suppliers such as Motorola Inc. (NYSE: MOT). (See Evolution Thinks Small , TVS Makes All-Digital Pitch , BBT: Tru2way? No Problem , and BBT Inches Toward DCAS Solution.)

The first U.S. cable operator to take Blankom up on its offer is NexHorizon Communications Inc. , a Westminster, Colo.-based company that is acquiring "under-performing" rural systems in "strategic" markets.

NexHorizon has already tapped Blankom to upgrade its system in Chula Vista, Calif., and will use the vendor as its exclusive digital headend provider for any other cable systems it acquires. NexHorizon, for example, already has a deal on the table to acquire Phoenix Communications (dba Pine River Cable) of Michigan, and has other deals in the works. (See NexHorizon Taps Blankom.)

NexHorizon's CEO Calvin Smiley says the goal is to purchase those assets and upgrade the network infrastructure so it can handle advanced video, voice, and data services.

Blankom, he notes, offered NexHorizon an affordable alternative for its forthcoming digital upgrades. "The issue is that you have several companies that provide this type of technology, but it's just not cost-affordable for a smaller cable company," Smiley says.

Blankom officials declined to divulge specific pricing, but believe the company can undercut competitors because it makes its own components and brings in systems integration expertise.

"To be effective, you really have to be a partner with [cable operators]," says Blankom's VP of sales and marketing, Steven Messino. "You can't just throw the equipment over the wall."

The vendor likewise believes it can get equipment into the hands of operators faster than some of its larger competitors, usually within 60 days, Messino adds.

Addressing security
Still, coming to market with a DVB-based system that uses integrated security runs some regulatory risks in the wake of an Federal Communications Commission (FCC) -mandated ban on integrated set-top security that went into effect last July. (See Countdown to 'Seven-Oh-Seven'.)

Blankom is protected somewhat by the fact that its conditional access supplier, Conax, is developing a CableCARD and is attempting to gain qualification from CableLabs . To date, CableLabs has stamped CableCARDs from Motorola, Cisco Systems Inc. (Nasdaq: CSCO), and NDS Ltd. .

Messino says Blankom met with CableLabs last week to discuss security-related "recommendations."

— Jeff Baumgartner, Site Editor, Cable Digital News