Cablevision Seeks Extended Security Waiver

Cablevision Systems Corp. (NYSE: CVC) has requested an extended set-top waiver from the Federal Communications Commission (FCC) so it can develop a more elegant "open" downloadable security system based on technologies developed by NDS Ltd. .

The Federal Communications Commission (FCC) 's ban on integrated set-top security went into effect in July this year: The aim was to spur a competitive market for cable set-tops and digital televisions capable of delivering interactive cable services. (See Countdown to 'Seven-Oh-Seven'.)

Cablevision, however, is operating under a temporary waiver that allows it to continue using set-tops that employ NDS-based SmartCard technology through July 1, 2009. After that date, Cablevision is meant to migrate to an FCC-approved separable security system such as the CableCARD or a downloadable conditional access system (DCAS). (See Son of 'Waiver Central' .)

In a request filed with the FCC last Wednesday (Nov. 26), Cablevision is seeking a limited waiver extension to December 2010. The 18-month grace period, Cablevision claims, would give it enough time to complete the deployment of an "open-standard downloadable security system" that would comply with the FCC's separable security rules and "support third-party retail devices."

Without such an extension, Cablevision suggested it would have to postpone its DCAS effort because it would be forced, instead, to turn its attention to "rebuilding" its Smart Card implementation for the CableCARD format.

In addition to causing technical and operational implementation issues, "this otherwise unnecessary extra transition step would cost significant amounts of money that Cablevision would be forced to pass on to subscribers," the MSO stated in the filing.

"It would be counterproductive to saddle consumers with these costs and problems when doing so will only delay Cablevision’s ability to implement a downloadable security solution that the Commission recognizes as superior to CableCARDs."

Tests already underway
Cablevision claimed it has already begun to develop and test its own DCAS platform, and expects to place commercial orders and initiate system installations by the spring of 2009, before the MSO's existing waiver expires.

"However, because of the complexity of migrating existing security systems to the new, open, downloadable platform, it will take until the end of 2010 before this implementation is complete, when all new set-top boxes will operate on the downloadable security system," Cablevision said.

Cablevision claimed it evaluated several downloadable systems before settling on its legacy conditional access supplier, NDS.

But how can a DCAS developed by a single vendor -- NDS, in this case -- be considered "open"?

According to Cablevision, NDS is committed to making its "key ladder and related security components" available to any vendor that wishes to deploy the system "on an open basis." The MSO further points out that the NDS secure key ladder is already baked into video-decoder chips sold commercially by 10 manufacturers -- including Broadcom Corp. (Nasdaq: BRCM), STMicroelectronics NV (NYSE: STM), and Conexant Systems Inc. (Nasdaq: CNXT) -- that together offer more than 60 chip models for a range of digital televisions, set-top boxes, and PCs.

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Cablevision, in a move that might keep the Consumer Electronics Association (CEA) off its back, suggests that the NDS downloadable security solution "harmonizes" with tru2way and CableCARD-based conditional access systems. Cablevision is already committed to tru2way through its signing of a "binding" memorandum of understanding (MOU) originally negotiated with Sony Corp. (NYSE: SNE) and the top six incumbent U.S. cable operators. (See Sony Supports tru2way and Revealed: The Tru2way MOU.)

Cablevision said it will continue its support of CableCARDs, even though a downloadable (and seemingly less expensive) security system is on the horizon. Under the proposed scheme, a tru2way TV with the NDS-licensed keys in its chips can use the CableCARD slot in one part of the country and, when it's moved to the Cablevision network, can use either a CableCARD module or have security downloaded directly to the TV's internal chip.

As of Sept. 12, 2008, Cablevision had 16,475 CableCARD subscribers, with another 23,069 CableCARDs in inventory. A CableCARD from NDS has already received CableLabs approval, as have products from Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO), while Evolution Broadband LLC plans to submit a CableCARD to CableLabs next year based on Conax AS security technology. (See Evolution Preps New CableCARD.)

Deployment plans, beta set-top partners
If granted a waiver extension, Cablevision said it will adhere to an aggressive rollout plan.

For "Phase I" it agreed to commence deployment of downloadable security set-top boxes in one-third of its service footprint based on this new "open standard" by July 1, 2009 -- the date its current waiver is set to expire.

Beyond that, the MSO said it would commit to completing the transition in all its systems by September 2010. After Dec. 31, 2010, all new set-tops deployed by Cablevision will employ the new DCAS, according to the MSO's plan.

Cablevision has already lined up Samsung Electronics Co. Ltd. (Korea: SEC) and LG Electronics Inc. (London: LGLD; Korea: 6657.KS) to develop "beta" set-tops that are capable of using the new downloadable security system.

Those boxes, which will utilize tru2way and the NDS "open key ladder," are expected to be ready for field-testing by the first quarter of 2009. Cablevision anticipates making those boxes available to customers by July 1, 2009, in the Phase I service area (on Long Island and in parts of New Jersey).

Phased Deployment

Cablevision's filing outlines where and when it would deploy NDS Group's
'open' downloadable conditional access system.

The MSO also pledged to commence deployment and to support downloadable security in the remainder of its service area (called Phase II) by September 2010, for its own set-tops, as well as third-party devices capable of using the same NDS-based security platform. Moreover, all new set-tops deployed in Cablevision's footprint after Dec. 31, 2010, will incorporate downloadable security, the MSO said.

The MSO is so confident that it can meet these self-imposed obligations that it has agreed to pay a penalty of $5,000 per day "in the unlikely event that Cablevision misses a commitment."

If Cablevision proceeds with its DCAS plans, it will mark the latest attempt by the domestic cable industry to develop a downloadable security system that's designed to comply with the FCC's new separable security rules. NDS, Motorola, and Cisco are purportedly implementing a system originally under the auspices of PolyCipher LLC , a cross-MSO project. Beyond Broadband Technology LLC (BBT) , another cable MSO consortium, is already starting tests of its own "open" DCAS platform. (See Cisco, Moto Take Control of DCAS and BBT Loads Up for First Field Test .}

— Jeff Baumgartner, Site Editor, Cable Digital News