Light Reading
As envisioned, this relatively bare-bones digital-to-analog converter would play a starring role in the MSO’s ‘all-digital’ strategy

Comcast Pursuing $35 Digital Dongle

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
2/22/2008
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Forget about an “all-digital” strategy driven by low-end, low-cost $50 set-tops. The nation’s largest cable operator is on the hunt for an even lower-end digital-to-analog converter device with a targeted price point of about $35 per unit.

Multiple cable industry sources have confirmed that Comcast Corp. (Nasdaq: CMCSA, CMCSK) issued a request for proposal (RFP) late last year for a relatively simple DTA (Digital Terminal Adapter) capable of taking in digital video and converting it into analog form. Although no such product has been produced, it’s believed that it will end up looking like a small dongle rather than a more traditional entry-level all-digital set-top such as the Motorola Inc. (NYSE: MOT) DCT700.

Rumors of the DTA project began to percolate last week when Comcast Corp. COO Steve Burke discussed on the company’s fourth quarter conference call the idea of migrating 20 percent of the MSO’s footprint to all-digital during the “back half” of 2008.

In those scenarios, it’s expected that Comcast will continue to deliver a small basic analog lineup of roughly 30 channels, but move its expanded basic analog tier to the digital domain. In doing so, it looks to reclaim upwards of 40 channels and reapply them toward expanded high-definition services or for fresh spectrum for Docsis 3.0. (See Comcast Spreads the Love and Comcast Closes In on 100 Mbit/s.)

Burke did not get into how Comcast expected to support that transition in customer homes, but it appears that the DTA project could factor heavily into the operator’s strategy.

A Comcast spokeswoman did not address the DTA project specifically, but said the MSO “looks at a number of different concepts and ideas with a number of different people. We’re very focused on the digital transition and we’re committed to helping our customers get through that transition.”

It’s believed that Comcast is looking to order about 25 million DTAs to help power an all-digital strategy cost-effectively for existing analog customers and to support existing digital customers who still have some TVs not connected to set-tops that receive analog programming. The volumes Comcast is considering are similar to what Verizon Communications Inc. (NYSE: VZ) is seeking in a set-top RFP the telco issued last summer. (See Verizon Set-Top RFP Could Be Worth Billions .)

As for the DTA’s simplicity, it’s almost easier to detail which elements likely won’t make it into the device because they are either unnecessary or cost-prohibitive enough to put the $35 target in jeopardy.

As a bare-bones, digital-to-analog converter, the DTA likely won’t house an upstream transmitter, an on-board electronic program guide, or support for the tru2way platform. (See Cable's 'tru2way' Play .)

“It [the project] keeps twisting and changing, so who knows?” says an industry source who has seen the RFP.

Likewise, there’s still some confusion about whether the DTA will support a traditional conditional access system. Because of the costs involved, there’s little chance it will contain a CableCARD interface. Sources familiar with the project suggest that Comcast may opt for a DVB-based encryption format or use even more limited protection because programming offered today on the analog basic and expanded basic tiers is already delivered “in the clear.” A downloadable CA system is another possibility, but considered a stretch at this point.

If a customer wants to use a particular cable outlet to view a premium channel, access video-on-demand content, or other more advanced digital services, they’ll require one of the more traditional (and powerful) CableCARD-based digital boxes.

The CA question
Although requirements for the DTA haven’t been finalized, the project brings up a tricky point involving the Federal Communications Commission (FCC) and the ban on integrated security set-tops that went into effect last July. (See Countdown to 'Seven-Oh-Seven'.)

The FCC has repeatedly denied Comcast’s waiver request for entry-level models with baked-in security, such as the Motorola DCT700, Scientific Atlanta Explorer 940, and the Pace Micro Technology “Chicago” DC501p. Comcast is appealing the FCC’s decision, arguing that the denials are hurting its ability to migrate to digital due to the elevated costs for lower-end set-tops with CableCARD interfaces. Comcast has claimed that the lowest-end CableCARD box from Motorola costs roughly double that of the DCT700. (See Comcast Takes CableCARD Battle to Court .)

It’s still unclear whether the DTAs would qualify for the mandate or if Comcast would require the blessing of the FCC to deploy the devices. Historically, the FCC has been more willing to grant special set-top waivers if operators were likewise willing to migrate to all-digital by the February 2009 digital TV transition. (See Verizon & Others Get Their Waivers.)

Short of going all-digital, U.S. cable operators are on the hook to deliver “must carry” TV stations in analog and digital format for three years after the switchover. (See FCC OKs Dual TV Carriage Rules.) As envisioned, Comcast’s DTA would ensure that the analog TV it’s connected to would be able to display a picture after February 17, 2009.

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OldPOTS
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OldPOTS,
User Rank: Light Beer
12/5/2012 | 3:47:13 PM
re: Comcast Pursuing $35 Digital Dongle
"Comcast will continue to deliver a small basic analog lineup of roughly 30 channels, but move its expanded basic analog tier to the digital domain. In doing so, it looks to reclaim upwards of 40 channels and reapply them toward expanded high-definition services or for fresh spectrum for Docsis 3.0."

It wasn't clear whether this box converted a single selectable digital channel (simple set top) or a box that converted 'expanded basic' digital channels to analog.

I assume the latter which makes it very interesting way to spend my coupons.

OP
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:47:10 PM
re: Comcast Pursuing $35 Digital Dongle
my understanding is that the box, as designed, would be able to convert an expanded basic tier sent out in digital back to analog at the customer end.

Tom-Andrew
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Tom-Andrew,
User Rank: Light Beer
12/5/2012 | 3:47:09 PM
re: Comcast Pursuing $35 Digital Dongle
"It wasn't clear whether this box converted a single selectable digital channel (simple set top) or a box that converted 'expanded basic' digital channels to analog.

I assume the latter which makes it very interesting way to spend my coupons."

The coupon program is only to support the "off-air" DTV programming. I don't think the federal government will extend it to offset the cost of a CATV dongle offered by an MSO.

My interpretation is Comcast would provide the dongle (like a digital block convertor, only Digital to Analog) to analog customers to support the FCC's analog TV requirements. Comcast gets to free-up bandwidth in their network for money making services and no need for expensive STBs for every TV (if Comcast were to go all digital).

Maybe I am stating the obvious.

Will be interesting to follow over the coming months/years.



Luke M
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Luke M,
User Rank: Light Beer
12/5/2012 | 3:47:08 PM
re: Comcast Pursuing $35 Digital Dongle
A bare-bones STB, one-way with no conditional access, should be even cheaper than $35 in mass quantities. It would be significantly simpler than an ATSC coupon box - no need to decode HD, for one thing. Cable companies can hand them out like candy (one for every TV in the house, with no rental charge).

Cable companies might not be too happy with having to provide digital (SD only, however) channels unencrypted, but what choice do they have? I love it!
Tom-Andrew
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Tom-Andrew,
User Rank: Light Beer
12/5/2012 | 3:47:06 PM
re: Comcast Pursuing $35 Digital Dongle
Gary:

"Will those Digital Dongles really be free??"

This is anyone's guess. My guess, based on my own Comcast analog experience, is you will end up paying with fewer channels. I have noticed quite a few analog channels being moved to digital tiers. I have not seen the corresponding reduction in my cable bill.... only increases.

Progress...

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:47:06 PM
re: Comcast Pursuing $35 Digital Dongle

That's a good point, and might eliminate some confusion here. The coupon program is for a different breed of d-to-a converters that receive over-the-air programming. there's no Comcast DTA available yet, but I'd agree that it's highly unlikely that the coupons could be applied to it once they do become available. Comcast will hand these out for the bandwidth efficiency gains.
OldPOTS
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50%
OldPOTS,
User Rank: Light Beer
12/5/2012 | 3:47:06 PM
re: Comcast Pursuing $35 Digital Dongle
I was just joshing about the coupons. But I got me some. My next TV will have all those fancy tuners and cable card so when my older TV breaks. My old TV now has a great picture thanks to HD cameras,

This brought back bad memories of a couple of years ago when Comcast employees spent hours trying to convince me that I had to switch my extended basic to digital and then had to pay more for it. Of course I had seen the discussions of how they then had hoped to gain more BW and channels thanks to LR.

Will those Digital Dongles really be free??

Gary E
pacedev
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pacedev,
User Rank: Light Beer
12/5/2012 | 3:46:57 PM
re: Comcast Pursuing $35 Digital Dongle
I've been trying to figure out who the CA vendor for this project would be if they're going to use encryption. Irdeto is the logical choice and this is what I hear from some industry colleagues as well, because Nagra and NDS are being used by Comcast's biggest satellite competitors, NDS is too expensive for a project like this anyway and is in serious potential legal trouble with the Echostar lawsuit, and Nagra is hopelessly hacked. Irdeto is the third player in the market so this makes sense.
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:46:55 PM
re: Comcast Pursuing $35 Digital Dongle
Free dongles? Probably too early to say since we don't know if any vendors have stepped up to say they can hit the price point. Given the bandwidth Comcast will reclaim, it'll probably worth it to them to get them out en masse. I'm curious about how easy these things will be to install. The hope is that consumers will only have to connect them to the outlet without too much fuss...and avoid those pricey truck rolls.
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:46:52 PM
re: Comcast Pursuing $35 Digital Dongle
Interesting that you bring Irdeto up. They just came on my radar again...something about a revived N. American cable play. Coincidence? Anyway, I'll be interested to hear what they have to say.
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