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Comcast Set for Set-Top Deadline

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
6/22/2007
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ORLANDO, Fla. -- T minus nine days and counting…

Although the media bureau of the Federal Communications Commission (FCC) has denied Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s waiver request on some low-end set-top models, and there appears to be little hope that the MSO's appeal for a full FCC review on the matter will bear much fruit, the nation's largest cable operator says it will be ready to go when a ban on set-tops with integrated security goes into effect on July 1. (See Countdown to 'Seven-Oh-Seven'.)

Preparing for that deadline was the topic of a session here on Wednesday afternoon at the Society of Cable Telecommunications Engineers (SCTE) Cable-Tec Expo.

With only 10 days to go before the mandate takes effect (as of Thursday), Charlie Kennamer, Comcast's VP of engineering, standards and industry affairs, joked that it may be a bit late in the game for engineers in the audience to get that ball rolling.

"If you're a cable operator and you don't already know this stuff, you should be back home figuring it out," he said.

Still, Comcast, like other U.S. cable operators, has been challenged by the operational impact of the transition to "host" set-tops that house CableCARDs, removable modules that contain the keys to the MSO's conditional access system. (See Boxing Up 'Seven-Oh-Seven' .)

To minimize the operational impact of the transition, most operators are asking the initial set of host set-top suppliers -- Motorola Inc. (NYSE: MOT), Scientific Atlanta , and Pace Micro Technology -- to mate the box and the CableCARD before they are shipped. To keep those two components fused, and to discourage children (and other consumers) from separating the module from the set-top and causing unnecessary service calls, suppliers are also covering the module with a special cover or faceplate. But to remove it, all a consumer would need is a Phillips-head screwdriver.

Comcast, Kennamer said, has been conducting trials "all over the company" in anticipation of the deadline. "They [host set-tops and the CableCARDs] do work… much in the way their predecessors did," he added, citing the millions of deployed set-tops with integrated security Comcast already has in the field.

But those trials have indicated that when problems do pop up, they tend to occur during the installation process when a technician just didn't follow the correct procedure.

Barring a last-minute reprieve on an already-denied waiver on some low-end set-top models, Comcast expects to deplete its inventory of integrated boxes before the deadline. "If we don't, we'll have a bunch of bricks in inventory after July 1," Kennamer said. (See Comcast Appeals CableCARD Ruling.)

FCC Chairman Kevin Martin has been on record as saying he expects to vote on a request from Comcast that seeks full FCC review of the denied waiver request from the agency's media bureau. (See Martin Rocks the Vote.)

MSOs are generally seeking waivers on low-end, all-digital boxes with integrated security because the price difference between those boxes and similar models that require CableCARDs (such as the Motorola DCH100) is fairly wide. But the pill for higher-end HD-DVR host boxes is considered an easier one to swallow. MSOs say the extra electronic components required in the host set-top and the CableCARD module itself add in the range of $70 to $75 to the total cost compared to traditional digital set-tops with the security embedded.

Charter Communications Inc. is one of just a handful of MSOs to obtain a waiver so far. Citing Charter's "financial difficulties," the FCC granted Charter the OK to continue buying and deploying some low-end models until July 1, 2008. Charter may also file a request for an extension. The FCC has yet to act on more than a dozen waiver requests.

Some smaller operators, including Jet Broadband, are seeking deferrals that will enable them to deploy integrated boxes until they can get their hands on CableCARD host devices.

Although the separable security mandate will offer negligible benefits to consumers and operators in the early going, that picture could change if support from the consumer electronics industry blossoms and generates innovation for the cable industry.

That benefit could be "huge" if it creates a bevy of products that can receive digital cable services, Kennamer said. "There's a significant benefit down the road." He acknowledged that the key to that will be the OpenCable Platform, which includes a CableLabs -specified middleware system that will give the cable industry and application developers access to a uniform set-top software footprint.

Kennamer said Comcast has completed some trials and expects to have a good portion of systems OCAP-ready by mid-2008.

— Jeff Baumgartner, Site Editor, Cable Digital News

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