1:00 PM -- A few years ago, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , and Time Warner Cable Inc. (NYSE: TWC) undertook a big project: developing a downloadable conditional access system (DCAS) that complies with the Federal Communications Commission (FCC) 's ban on integrated security that went into effect in July 2007. (See Countdown to 'Seven-Oh-Seven'.)

As billed originally, the proposed system, which would use a secure micro that's housed in OpenCable/tru2way set-tops and TVs to load and store encryption keys, would be more elegant and much less expensive than CableCARDs -- the way most U.S. operators do separable security today.

At last check, the joint venture, operating as PolyCipher LLC , handed off the implementation keys to Cisco Systems Inc. (Nasdaq: CSCO), Motorola Inc. (NYSE: MOT), and NDS Ltd. . (See Cisco, Moto Take Control of DCAS .)

Although DCAS would certainly be a more graceful option than the kluge CableCARD, it looks like the dollars required to do DCAS may not make a lot of sense... at least not yet.

Speaking on tru2way-focused session at the Consumer Electronics Show on Saturday morning, Kevin Leddy, the EVP of technology policy and product management at Time Warner Cable, offered an update on the Polycipher project. It's not going anywhere fast.

"The economics of downloadable security are challenging," Leddy said, noting that adding a more complex DCAS solution "will probably add more cost." Besides, asking TV makers and set-top suppliers to incorporate a new separable security system could meet significant resistance from the consumer electronics industry, he surmised.

Although adding CableCARD support isn't free, the costs behind the technology should continue to slide as adoption expands. National Cable & Telecommunications Association (NCTA) reported late last month that the top 10 “incumbent” U.S. MSOs had deployed more than 9.7 million “operator-supplied” CableCARDs since the ban took effect. (See CableCARD Update VI.)

But an admission that the CableCARD will live on for the foreseeable future should be music to the ears of bean counters at Cisco and Motorola. The vendors, which make up the U.S. conditional access "duopoly," should be more than happy to continue reaping the margins on the CableCARD modules themselves.

Although the promise of Polycipher appears to be on the back burner (if on the stove at all), that doesn't mean DCAS is dead from a broader perspective.

Beyond Broadband Technology LLC (BBT) , another cable MSO consortium, and Cablevision Systems Corp. (NYSE: CVC) have separate projects underway. However, to illustrate one of Leddy's points, both are are getting static from the Consumer Electronics Association (CEA) . (See BBT Notches First Install , Cable Group Faces DCAS Debate, Cablevision Counters CEA CableCARD Claims, and Cablevision Seeks Extended Security Waiver.)

— Jeff Baumgartner, Site Editor, Cable Digital News