& cplSiteName &

TiVo Seeks CableCARD Cost Probe

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
4/16/2010
50%
50%

TiVo Inc. (Nasdaq: TIVO) has called on the Federal Communications Commission (FCC) to conduct a probe into the economics of the CableCARD and uncover why costs associated with the separable security platform have failed to drop much in the wake of volume deployments by MSOs.

TiVo execs, including SVP and general counsel Matthew Zinn, pressed that idea this week during a meeting with Brad Gillen, legal advisor to FCC Commissioner Meredith Attwell Baker. TiVo presented its case as the FCC gets ready to propose new rules aimed at "fixing" the current CableCARD regime next week. (See FCC Floats 'Simple' Gateway, CableCARD Rules .)

It's been reported that the FCC, as part of the proposal, is considering an exemption that would allow cable MSOs to buy and deploy a new breed of hi-def-capable Digital Terminal Adapter (DTA) boxes with integrated security. The argument holds that such boxes, which are expected to cost $50 per unit once volumes ramp up, will give MSOs a low-cost HD box option to counter the higher costs associated with CableCARD-based set-tops. (See HD-DTA Battle Heats Up and FCC Chews on HD-DTA Exemption .)

Per its ex parte filing, TiVo, which has invested in CableCARD-capable boxes and remains grumpy about cable's level of support for them, suggested that the FCC "first examine the economics purportedly underpinning waiver requests" before considering any more exemptions for boxes with integrated security. (See TiVo Gives Cable Both Barrels .)

TiVo also wants the FCC to check out what can be done to drive down CableCARD costs. It's likewise frustrated that those costs have not dropped much even after the top 10 US cable MSOs have deployed almost 20 million CableCARD modules since the FCC's ban on integrated set-top security took effect in July 2007. (See CableCARD Update.)

Many of those costs are already known, so it appears that TiVo merely wants to shine a brighter light on them as the FCC gets ready to put new CableCARD rules out for comment.

In fact, one of the most recent documentations on CableCARD module costs originates from the FCC itself. The FCC Media Bureau has already suggested that a CableCARD adds about $56 in cost to a set-top box, according to a National Cable & Telecommunications Association (NCTA) filing made in November 2009. With current CableCARD deployment figures in mind, that means the industry has incurred at least $1.1 billion just to comply with the integration ban.

While that does offer an stark indication on how wasteful the integration ban has been thus far, TiVo is likewise wondering why such volumes haven't caused CableCARD costs to fall off the table yet.

Several industry sources confirmed that CableCARD modules still cost at least $50 each. They also blame that on the fact that competition for those cards, and the security features and licensing requirements found therein, are still largely limited to just two suppliers -- Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO) -- and hold that the situation has allowed those vendors to maintain a hammerlock on the market and keep costs artificially high.

"When the separable security ruling came into effect, the CableCARD price was in the $55 to $60 range. Now, after 20 million units have been deployed, the going price for a CableCARD is... $55 to $60. That's what you get when there is no effective competition," says an industry source who is familiar with the economics of the CableCARD market.

Despite the high cost of those cards, cable operators charge consumers much less to lease them, with monthly rates typically in the $2 range. On-site installs, however, can run as high as $35.

But the CableCARD isn't the only economic component to consider. The Personal Computer Memory Card International Association (PCMCIA) slots in the boxes are believed to cost at least $25 when the hardware and license fees are factored in.

And getting retail TVs and boxes tested at CableLabs isn't free, either. According to a CableLabs fee schedule, getting a unidirectional cable product (a one-way TV or set-top, for instance) tested costs $30,000. Testing an OpenCable Unidirectional Receiver (OCUR) -- a CableCARD-based product that turns PCs into digital set-tops -- costs about $80,000. Other fees and licenses tied to OpenCable can approach $90,000. (See Ceton Pitches Cable Set-Top Alternative .)

— Jeff Baumgartner, Site Editor, Light Reading Cable

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:39:15 PM
re: TiVo Seeks CableCARD Cost Probe
One adjustment to mention. Originally the story noted that the cost of testing a unidirectional box would cost $175K. Actually, that cost is for a full OpenCable (tru2way) box or TV. The cost for testing a unidirectional device is much lower -- $30,000. The last graph of the story has been adjusted to reflect that. JB
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:39:14 PM
re: TiVo Seeks CableCARD Cost Probe
Although there aren't that many folks out there that have required a separate CableCARD install (for a plug & play TV or Moxi or TiVo device), the reported experiences have been both good and bad, though the bad is what we usually end up hearing about. Has anyone out there in LR-land gone through this experience? What were the results? Was it worth it? JB
UC-Connect
50%
50%
UC-Connect,
User Rank: Light Beer
12/5/2012 | 4:39:07 PM
re: TiVo Seeks CableCARD Cost Probe


As a European outsider it is interesting to see this interlinked situation of regulator, operator, technology supplier and CE industry. I wonder why the retail market for cable receivers never worked. The possible reasons are:


1) Cable card is too expensive. I believe fundamentally it can be a lot cheaper than it is today, seeing what similar technology costs in Europe: both modules and receiver cost-up. Retail prices for modules including serious margins for retailers is 60 euros. Bill of Material: substantially less than 15 euro's (there are fairly transparent pricings for the Conditional Access system licenses). Maybe the MSO's did not push their dear suppliers, or maybe the suppliers are very powerful. Can someone share some insight? Also: can someone explain why it is cheaper to build a HD convertor box than a Cablecard module? It cannot be the hardware, and also not the software or licenses: they cannot be higher for cablecard modules than they are for boxes.


2) It seems the whole story is a replay of the first failure of cablecard back in 2005. The fundamental problem is that the MSOs do not seem to have a positive incentive, even under this mandate, to actively support & promote the retail market for receivers. And why do other parties that try (do they really try?) fail at this promotion. If this is indeed the case one has to go back to the whole reason why this mandate was instated in the first place. 


In Europe some operators engage with the CE industry to actively promote CI-Plus and retail digital receivers, especially integrated Digital TVs. There is a mix of incentives for the participants. The operator's attraction is that customers are more strongly attracted to integrated Digital TV offers in Europe than they are to boxes, especialy the less advanced part of the market. And there is still some convergence from analog -> digital to do. So they can gain (or preserve) customers, converting them to digital. And there is less CAPEX (HD boxes are still much more expensive than CAM modules); and operators even manage to let the consumer pay for the modules, whereas they often have to fund the boxes themselves.

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:39:05 PM
re: TiVo Seeks CableCARD Cost Probe
I've heard much better reactions so far to CI-Plus than to the CableCARD regime. Although the 2007 fcc mandate forced separable security, it did not do anything to fix the core problem -- that the Cisco/Moto duopoly would pretty much live on in the form of security. Security is separable, but you're still stuck with one of those two suppliers.




Cablevision's the only major US cable operator to be successful outside the security end of the duopoly (it uses NDS), but it pulled that trick off by forcing Scientific Atlanta to support NDS security and the SimulCrypt interface to land the deal.

The FCC meeting that will propose new rules on how to "fix" the cableCARD situation comes tomorrow. Makes me wonder if the FCC listened to earlier arguments that called on the Commission to require Moto and Cisco to do a better job of supporting SimulCrypt in the US. JB

From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Introducing OrbTV: Netscout's MWC Day 1 Recap

2|27|17   |   8:35   |   (0) comments


The executive team of Netscout reviews the first day of Mobile World Congress in Barcelona. Stay tuned for OrbTV -- Light Reading and Netscout's full coverage of the show. We'll have daily show recaps, service provider interviews and tours of the show floor.
LRTV Custom TV
Innovation at MWC: Low-Power IoT for Scottish Sea Lions

2|27|17   |   6:32   |   (0) comments


Light Reading's Liz Coyne tours the GSMA's Innovation City at Mobile World Congress 2017. A key theme of this year's event is how low-power or no-power IoT devices could become a part of our everyday lives. Imagine a world in which over 15 billion shipping pallets communicate with cellular networks down the entire supply chain. Or a parka that reveals your ...
LRTV Huawei Video Resource Center
Huawei Will Accelerate the Spread of the Video Business

2|27|17   |     |   (0) comments


What is the future of the booming video business? What changes will happen to the video industry chain in the future? Hunter Hu, VP of Huawei Video Product Line, shares his viewpoints and explains how Huawei can be an enabler and accelerate the spread of the video business.
LRTV Huawei Video Resource Center
Frost & Sullivan's Jonas Zelba on Going Beyond Connectivity

2|27|17   |     |   (0) comments


Telecom operators across the globe are trying to understand what can they offer beyond connectivity. Operators are already introducing new and innovative services but they are faced with challenges due to unclear business models. Jonas highlights that no one operator can offer all the services itself. Operators in the Middle East should look within their ecosystem ...
LRTV Huawei Video Resource Center
IDC's Paul Black on Cloudification

2|27|17   |     |   (0) comments


Paul Black from IDC shares his insights on how cloudification is expected to combile all aspects of digital transformation.
LRTV Huawei Video Resource Center
Industry Expert Michael Howard Talks About Cloud Native

2|27|17   |     |   (0) comments


Cloud Native is a really nice term and a lot of people are using it. But most of them have their own definition of what Cloud Native means. Michael Howard offers his take on the terminology.
LRTV Custom TV
4.5G Evolution: Peter Zhou on Advanced MIMO Technologies & 5G Business Prep

2|25|17   |     |   (0) comments


In the process of service transformation, operators need to catch three major opportunities and start deploying in 4.5G networks, such as video, household broadband access and digital transformation of vertical industries. 5G is coming. Operators don't need to wait for it to happen but should progressively deploy 4.5G networks by introducing 5G-oriented ...
LRTV Custom TV
What WTTX Can Deliver

2|23|17   |     |   (0) comments


Mohamed Madkour explains the benefits of WTTX while Dimitris Mavrakis discusses the challenges of delivering home broadband access.
LRTV Custom TV
Huawei on Mobile Broadband

2|23|17   |     |   (0) comments


Mohamed Madkour shares his vision on MBB for the next three years.
LRTV Custom TV
Analysys Mason Talks About the Future of Digital Operations

2|23|17   |     |   (0) comments


The future of digital operations has three key aspects: 1. Highly automated operations for both service and network; 2. Highly converged BSS/OSS for business and resources; 3. Highly merged management and control for real-time cloud native operations.
LRTV Interviews
Software Trends in the Telecom Sector

2|23|17   |   03:40   |   (0) comments


Heavy Reading senior analyst James Crawshaw talks with Telecoms.com Editorial Director Scott Bicheno about trends and developments in the telecoms software sector and what to expect at MWC 2017.
LRTV Custom TV
Huawei's Pre-MWC Analyst Briefing 2017 Highlights

2|22|17   |     |   (0) comments


Huawei shares its vision for this year's MWC.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Uber's HR Nightmare: Company Investigates Sexual Harassment Claims
Sarah Thomas, Director, Women in Comms, 2/21/2017
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Cloud Rains on HPE Earnings
Mitch Wagner, Editor, Enterprise Cloud, 2/24/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
No One Likes This Click Here
Take a hint!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.