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Cablevision Scores Set-Top Waiver Extension

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Despite some big concerns from the Consumer Electronics Association (CEA) , the Federal Communications Commission (FCC) has granted Cablevision Systems Corp. (NYSE: CVC) a deadline-laden waiver that allows the MSO to continue using SmartCard-based set-top box security through the end of 2010.

Before that allowance, Cablevision had been operating under a different temporary waiver that allowed it to continue using boxes with NDS Ltd. -based SmartCards through July 1, 2009. After that date, it was on the hook to migrate everything to a CableCARD platform or another FCC-approved separable security system in the wake of an integrated security ban that went into effect on July 1, 2007. (See Countdown to 'Seven-Oh-Seven'.)

Cablevision launched its SmartCard-based conditional access in the fall of 2001, roughly six years before the rest of the U.S. cable industry was mandated to move to a separable security platform, with the vast majority moving to the CableCARD. (See CableCARD Update VI.)

In establishing its case for an extension, Cablevision argued that it needed the extra 18 months to complete the development and deployment of a new "open" downloadable conditional access system (DCAS) that uses the NDS "key ladder" (K-LAD).

NDS has agreed to license K-LAD on a "royalty free, 'as-is' basis with no warranties and indemnities." Broadcom Corp. (Nasdaq: BRCM), STMicroelectronics NV (NYSE: STM), and Conexant Systems Inc. (Nasdaq: CNXT) are among companies that already use K-LAD in their video-decoder chips. Cablevision, meanwhile, has disclosed that Samsung Electronics Co. Ltd. (Korea: SEC) and LG Electronics Inc. (London: LGLD; Korea: 6657.KS) are already developing “beta” set-tops that use the new downloadable security platform. (See Cablevision Seeks Extended Security Waiver.)

In a "Memorandum Opinion and Order" issued Friday, Jan. 16, the FCC held that Cablevision "has demonstrated extraordinary efforts" to ensure the compatibility of SmartCard technology with CableCARD devices. We therefore believe that a limited waiver…is appropriate in this instance."

The FCC granted the extension despite fierce opposition by the CEA, which argued in part that Cablevision's downloadable system "would end common reliance on CableCARDs." (See CEA Chirps at Cablevision Set-Top Request .) In the order last week, the FCC said the CEA "does not provide specific objections and even acknowledges that it does not have specific information on this new downloadable system."

Even with the extended waiver, Cablevision must meet a strict set of deployment deadlines and conditions. Among them, the MSO must begin commercial use of DCAS in its "Phase I" area by July 1, 2009, and all new set-top boxes deployed in that region must use DCAS by the end of 2009. Additionally, all new set-tops deployed in Cablevision's footprint must incorporate the new downloadable system by the end of 2010.

And missing any of those milestones won't come cheaply, because the MSO has agreed to pay up to $5,000 per day should it miss any.

The FCC green light should also breathe new life into DCAS efforts, particularly after it's become clear that a similar endeavor helmed by Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , and Time Warner Cable Inc. (NYSE: TWC) is on the backburner. (See DCAS Can Wait .) Meanwhile, Beyond Broadband Technology LLC (BBT) , another cable operator consortium, is just getting its platform off the ground in a meaningful way. (See BBT Notches First Install .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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Michael Harris
Michael Harris,
User Rank: Light Beer
12/5/2012 | 4:13:25 PM
re: Cablevision Scores Set-Top Waiver Extension
Even with the extended waiver, Cablevision must meet a strict set of deployment deadlines and conditions. Among them, the MSO must begin commercial use of DCAS in its "Phase I" area by July 1, 2009, and all new set-top boxes deployed in that region must use DCAS by the end of 2009. Additionally, all new set-tops deployed in Cablevision's footprint must incorporate the new downloadable system by the end of 2010.

And missing any of those milestones won't come cheaply, because the MSO has agreed to pay up to $5,000 per day should it miss any.

Like it did with VoIP, NPVR and WiFi, looks like CVC will beat other big MSOs to market with DCAS too.

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