Light Reading
Joint venture collapse suggests Comcast, Cox, and Time Warner aren't close to a downloadable system that replaces CableCARDs

MSOs Closing PolyCipher Headquarters

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
6/5/2009
50%
50%

The MSOs backing the PolyCipher LLC downloadable conditional access (DCAS) joint venture have opted to shut down the unit's downtown Denver office at the end of this month and assume full control of the JV, or what's left of it, Cable Digital News has learned.

Industry sources familiar with the situation say PolyCipher is down to three full-time employees -- CEO Tom Lookabaugh, VP of business development Jim Esserman, and VP of operations Shannon Johnson. All three are expected to depart the organization by month's end, leaving PolyCipher as a completely distributed operation run by its trio of MSO bosses. Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) each have 40 percent stakes in PolyCipher; Cox Communications Inc. owns the remaining 20 percent.

Those MSOs originally created PolyCipher to develop a DCAS that, at least in theory, would be more elegant and less expensive than CableCARD modules and interfaces, which most U.S. MSOs use today to separate set-top security and adhere to a Federal Communications Commission (FCC) mandate that took effect in July 2007. (See Countdown to 'Seven-Oh-Seven'.)

That PolyCipher's operation will no longer be run by a dedicated staff is not a huge surprise. Word leaked out last year that PolyCipher had handed the implementation of the DCAS to Cisco Systems Inc. (Nasdaq: CSCO), Motorola Inc. (NYSE: MOT), and NDS Ltd. , although they have yet to produce any commercial DCAS products for the JV. (See Cisco, Moto Take Control of DCAS . NDS, however, has created a downloadable security system for Cablevision Systems Corp. (NYSE: CVC), which isn't part of PolyCipher. (See Cablevision Seeks Extended Security Waiver and Cablevision Scores Set-Top Waiver Extension .)

CableLabs is expected to maintain its role with the DCAS, which includes the distribution of licenses.

Although there's no word that the DCAS effort might be scuttled, another dose of doubt was heaped on the project's near-term prospects in January when TWC EVP of technology policy and product management Kevin Leddy lamented during a panel on the topic of tru2way at the Consumer Electronics Show that the "economics of downloadable security are challenging" while CableCARD costs continue to slide downward. (See DCAS Can Wait .)

During a more optimistic moment in mid-2007, PolyCipher had indicated that field trials could begin by 2008. (See PolyCipher Targets '08 Trials .)

PolyCipher officials and those from its MSO partners were not available for immediate comment Friday, but industry sources say the implementation components of the DCAS project remain in the hands of the vendors, and the decision to get rid of the Mile High City office was partly driven by the desire to scale back spending.

"The scope of [PolyCipher] is quite diminished," said a person familiar with the move, noting that the MSOs "don't need office space in downtown Denver for what they are trying to accomplish."

The three firms have already spent a king's ransom on the PolyCipher project. No recent figures are publicly available, but an FCC document filed in 2006 revealed that they had already invested more than $30 million on the project.

With the Denver office going away and the remaining dedicated employees set to depart, PolyCipher, sources say, will revert to its initial configuration and mode of operations, meaning it will be run by a part-time staff and contractors.

As for the future of a PolyCipher DCAS, there's been no public declaration as to whether it will ever reach deployment, which is probably welcome news for Motorola and Cisco, which are set to benefit the most if the U.S. cable industry continues to largely rely on CableCARDs.

Industry observers also point out that the PolyCipher effort came about during a time in which the FCC's attitude toward the cable industry, and the major MSOs in particular, was considered hostile.

The FCC, however, has previously acknowledged that an "open" downloadable security system developed by Beyond Broadband Technology LLC (BBT) lives up to the spirit of the set-top security ban. The Consumer Electronics Association (CEA) , however, has generally been opposed to any separable security effort that's not centered on the CableCARD. (See Cable Group Faces DCAS Debate.)

But lately, the Commission has been a bit more lenient with its waivers, even approving Cable ONE Inc. 's request to deploy a hi-def box with integrated security. So there's some hope in cable circles that the DCAS developed by the original PolyCipher team may still see the light of day if that trend continues. (See Evolution Guns for HD Box Waiver and Cable ONE Snares HD Set-Top Waiver .)

— Jeff Baumgartner, Site Editor, Cable Digital News




Interested in learning more on this topic? Then come to Cable Next-Gen Video Strategies: Competing in the Three-Screen World, a one-day conference that will take a comprehensive look at the cable industry's attempts to generate revenues and fend off its rivals by deploying next-generation video technologies. To be staged in Atlanta, June 25, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.


(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (0) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for ...
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
LRTV Interviews
Bob Wilson, Arsenal Legend: The Light Reading Interview

1|16|15   |   35:36   |   (3) comments


Arsenal goalkeeping legend Bob Wilson was Light Reading's guest interviewee at the 2020 Vision Executive Summit in December. See what the former soccer star and sports broadcaster had to say when he took to the stage in Iceland.
LRTV Custom TV
What MEF Third Network Initiative Means for SDN & NFV

1|14|15   |   6:13   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss discusses the importance of the MEF Third Network initiative and why it's good news for SDN/NFV industry initiatives.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
BlackBerry Wants Net Neutrality Protection -- That's Just Sad
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/22/2015
FiOS Picks Up Pace Again
Alan Breznick, Cable/Video Practice Leader, 1/22/2015
Verizon Ready for Google MVNO Challenge
Dan Jones, Mobile Editor, 1/22/2015
Indiana Carrier Takes Fiber to the Farm
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/22/2015
The New Internet Space Race: Google's Final Frontier?
Dan Jones, Mobile Editor, 1/21/2015
Like Us on Facebook
Twitter Feed
Webinar Archive