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CableOne Unplugs EchoStar

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
2/17/2012
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Following a string of missed deadlines, CableOne 's dance with EchoStar Corp. LLC (Nasdaq: SATS) has come to an end, sources close to the operator say.

CableOne, a mid-sized MSO with about 720,00 customers spread across 19 states, had been conducting tests on EchoStar set-tops, including its "Sling-Loaded" models, but decided to pull the plug on the relationship late last week, according to industry sources close to the tests.

CableOne got fed up with "EchoStar's inability to produce a timely and properly functioning box," says a source familiar with the situation. Another says "repeated missed commitment dates" led to CableOne's decision to step away.

Exactly why EchoStar had trouble hitting deadlines is a bit hazier, though one person says it may have boiled down to problems with CableCARD integration. Nagravision SA , a longtime EchoStar partner through the NagraStar LLC joint venture, has been working on its own CableCARD, though it has yet to receive qualification from CableLabs . It was not immediately known if that's what was to be used in the CableOne trial or if EchoStar and the MSO tried to head in a different direction. However, CableOne does have a link to Nagravision -- its initial pick for hi-def DTA devices matched Nagravision's security with boxes from Digital Multimedia Technology Co. Ltd. (DMT). (See Scoop! Cable ONE Makes HD-DTA Picks and Nagravision Deals Itself Into CableCARD Game.)

Update: CableLabs confirmed that Nagravision's multi-stream CableCARD was qualified in June 2011. The list of qualified CableCARDs currently posted at the CableLabs website was last updated in April 2011, but the R&D house said that it will update this data as soon as possible.

CableOne's interest in EchoStar, Charlie Ergen's technology and set-top box outfit, goes back a bit. EchoStar and TiVo Inc. (Nasdaq: TIVO) were among the companies the MSO was looking at in mid-2010, when CableOne was mulling its next-gen video service strategy. TiVo has once again emerged as "a very strong candidate" for that business, a source says. Motorola Mobility LLC remains CableOne's primary digital set-top and security vendor. (See Cable ONE Sizes Up EchoStar, TiVo Set-Tops.)

According to CED, EchoStar mentioned at a press briefing at the Consumer Electronics Show in January that CableOne was testing Aria, a platform that ties together EchoStar set-top boxes, over-the-top video-on-demand content and a cloud-based navigation platform. EchoStar is targeting Aria to Tier 2/3 cable MSOs, and believes it can get 1 million cable customers on it by the end of 2013. (See EchoStar's Cable Target: 1 Million Subs and EchoStar Arms Tier 2 MSOs for War .)

Losing CableOne would seem to set those plans back. EchoStar wouldn't comment about its status with CableOne, but did confirm that it's testing Aria with "multiple operators" and remains convinced that the work it's doing with them "will ultimately result in a superior product for cable operators."

CableOne declined to comment on the record.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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