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Charter Bemoans CableCARD Costs

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
1/29/2013
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Charter Communications Inc. continued its fight for a special set-top waiver at the Federal Communications Commission (FCC) Monday, telling the agency that it would be prohibitively expensive for the MSO to develop boxes that can support both the CableCARD and a new, proposed downloadable video security platform. Charter is seeking a two-year waiver that would let it deploy set-top boxes that run the new downloadable security alongside its legacy security system simultaneously. Charter wants to run its current security system as an integrated component (rather than via a removable CableCARD) while it rolls out a new downloadable platform that will serve as a key cog of Charter's broader all-digital transition. (See Charter Sets All-Digital Path for Video.) Charter needs the waiver to sidestep a July 2007 FCC mandate that bans cable operators from deploying set-tops with integrated security. Cablevision Systems Corp. sought and secured a similar FCC waiver in 2009, but the FCC has yet to act on Charter's request. (See Cablevision Scores Set-Top Waiver Extension and Countdown to 'Seven-Oh-Seven'.) Charter is largely modeling its plan around Cablevision's new video platform, which relies on a downloadable security system based on the NDS (now Cisco Systems Inc.) "key ladder" that currently runs on Samsung Corp.-made boxes. (See Charter's Video Plan Good News for Cisco, Samsung.) Big redesign costs
In a filing with the FCC, Charter argued that it would be saddled with "significant" costs if it did not get the waiver and was forced to develop and deploy set-tops that support both the CableCARD and the new downloadable security system. The device for which Charter is seeking a waiver is based on a non-U.S. set-top with integrated security that has added the downloadable security piece. Charter estimates that redesign costs would cause the price of CableCARD/downloadable security combo boxes to run 40 percent higher versus the cost of the device for which the MSO is seeking the waiver. The cost of the CableCARD module and the interface in its current boxes alone runs $40 to $50 -- meaning the components would "add $40 million of unnecessary costs for every million set-top boxes," Charter noted. Charter says it's prepared to begin the project as soon as a waiver is granted, but stressed that it will be unable to deploy downloadable security "for the foreseeable future" without one because it lacks access to an affordable set-top that can support both security systems. The operator estimated that such a product would take at least six months to design. Charter's request is getting some static. The Consumer Electronics Association (CEA), for example, is urging the FCC to quash more waivers and instead pursue a proposed CableCARD successor called AllVid that would be applied not just to cable, but to telco and satellite TV operators as well. (See CEA Tries to Kill Charter's Video Plan.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/31/2013 | 2:19:21 AM
re: Charter Bemoans CableCARD Costs
Hanging on by a thread.-á CEA and the others in the AllVid Tech Alliance are still urging the FCC to turn it into a formal rulemaking effort, but the FCC hasn't made any decision either way. JB
craigleddy
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craigleddy,
User Rank: Blogger
1/30/2013 | 9:17:21 PM
re: Charter Bemoans CableCARD Costs
AllVid! Is that thing still alive? Anyone know the status?-á
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/30/2013 | 8:48:47 PM
re: Charter Bemoans CableCARD Costs
Well, these filings are full of lawyer-speak ;)
But, yes, i think the cable industry would agree with the notion that doing away with CableCARDs and all mandates tied to separable security would be a good thing... for them.-á I just don't see the CEA going along with that; they're still pushing the AllVid idea, even if it would seem that the idea is pushing up daisies at this point. JB
Cooper10
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Cooper10,
User Rank: Light Beer
1/30/2013 | 6:42:10 PM
re: Charter Bemoans CableCARD Costs
I believe NCTA has demonstrated that CableCard has saddled the cable industry with more than $1 billion in unnecessary incremental costs, so not sure why the FCC would care about another $40M in costs for Charter.-á Bigger issue is that CableCard is simply a failed prescriptive approach to try to micro-manage an industry, yet the FCC refuses to acknowledge the failure.-á I'm sure All Vid would be totally different...(not)
craigleddy
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craigleddy,
User Rank: Blogger
1/30/2013 | 5:31:07 PM
re: Charter Bemoans CableCARD Costs
A "canard"? What, are we talking like we're in 19th Century France?-á

Everyone would be better off if there was an "evisceration" of CableCARDS altogether and cable could move on with downloadable security and DRMs.-á
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/30/2013 | 2:44:02 PM
re: Charter Bemoans CableCARD Costs
The CEA responded in kind, arguing that Charter's proposal is "simply a canard," that neither of the systems proposed by the MSO would be complaint, and that Charter wants the waiver to simply sidestep the FCC's separable security rules. The CEA still has issues that Charter's downloadable -ásystem requires a system-specific chip that uses "non-downloadable elements" that can't be changed and that it "affords access only to a single conditional access system."-á
Charter has already countered that the proposed downloadable system would use the same "commodity chips" that Cablevision now uses for its downloadable system and that the silicon can support other conditional access systems.
The CEA also reiterated what it said in its original opposition to the Charter request: that an "agency must or should [not] tolerate evisceration of a rule by waivers."
The CEA letter to the FCC is here: http://apps.fcc.gov/ecfs/docum...
Well, the ball's back in the FCC's courtGǪ
JB
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