Protecting Comcast's DTA

After Comcast Corp. (Nasdaq: CMCSA, CMCSK) revealed some details about its plans to deploy a simple digital-to-analog adapter on Thursday, I dug into some notes I took several weeks back when Zoltan Costin, the business development manager of Irdeto Access B.V. , blew through town.

During our lunch here in the south-of-Denver sprawl, Costin insisted that Irdeto, a company that has conditional access, watermarking and encryption systems in its portfolio, is geared up to make another push into the U.S. cable market.

I was tempted to, but didn't, ask the first set of questions that leapt to mind. Questions like: What are you, nuts? What makes you think Irdeto has a chance of cracking the seemingly uncrackable U.S. conditional access (CA) duopoly of Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO)?

"We have the body mass to enter the U.S. market," Costin said, then proceeded to tell me about how Irdeto's technology supports millions of set-tops, the company has hundreds of customers and an employee base greater than 700 strong.

Fine. But does Irdeto also have the intestinal fortitude to do what it takes to survive, let alone succeed in the U.S. cable market, whose lengthy sales cycles are legendary? Just ask ICTV Inc. to tell you how easy it is. (See It... Lives! .)

Costin thinks Irdeto has the will to do well here, spurred on, ironically, by the CA duopoly, which he believes keeps set-top box prices artificially high. "We don't want to keep our customers captive by CA," he said, noting that Irdeto's conditional access system, by standard default, allows for a simulcrypt interface. The presence of that interface "keeps us on our toes," he said, because it enables a service operator to introduce another CA system if it so chose.

The conversation then led to the prospects of the DTA "zapper box," which Comcast had not officially confirmed yet, but there was a report floating about. (See Comcast Pursuing $35 Digital Dongle.)

Irdeto, he went on, can package its secure micro inexpensively and in various forms… whether that's on a SmartCard, a SIM, or mounted directly on a circuit board.

So what does this have to do with the proposed DTA and that tough-to-hit $35 unit price Comcast wants? "We are in a position to help," Costin suggested.

Well, we'll have to wait and see. There are still some big questions about how the DTA will be implemented and whether it will support CA-level encryption. Short of that, it might just feed those digital broadcast channels "in the clear," since it won't be capable of delivering HD programming, video-on-demand, or even premium services like HBO, Starz, and Showtime, anyway.

Then again, putting anything in the clear digitally might make the studios a bit uncomfortable, because it wouldn't take the brightest bulb on the planet to figure out how to make a perfect copy of the latest episode of Heroes and send it to China for a fun DVD-burning session.

So we'll keep our ear to the ground on the DTA developments and see if Irdeto's willingness to help translates into a tidy U.S. cable deal.

— Jeff Baumgartner, Site Editor, Cable Digital News