Cisco, Moto Called Out by Ohio MSO

A mid-sized MSO based in Ohio wants to blow up the cable set-top and security "duopoly" that Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO) enjoy in the U.S. cable market by forcing those vendors to support Digital Video Broadcasting (DVB) "SimulCrypt," a system that allows more than one conditional access system (CAS) to operate on the same video program stream.

Massillon Cable TV Inc. , an operator with about 45,000 subs, claims in this filing that Cisco and Motorola don't support SimulCrypt in the U.S., where they are incumbent suppliers, but they do internationally, where they are instead trying to win business as new entrants.

Massillon is asking the FCC to require programmers to allow the distribution of unencrypted standard-definition signals, but conceding that they should continue to encrypt their higher value high-definition feeds (more on this below).

DVB is popular in Europe, with only sparse use among U.S. cable operators. However, Massillon says DVB SimulCrypt is necessary if domestic MSOs ever hope to break free of the duopoly and create a more competitive set-top market that will drive a new level of innovation and reduce box costs.

Massillon (and other MSOs) could introduce a new CAS by simulcasting all video services, but the operator argues that such an approach wastes bandwidth and is prohibitively expensive because it would require the deployment and management of duplicate headends and other back-office systems.

The operator contends that Motorola and Cisco are being duplicitous with their support of SimulCrypt, claiming they don't support it domestically in order to protect their existing U.S. cable video business, but go out of their way to do so in global markets where SimulCrypt is required for entry.

"Refusing to offer or support SimulCrypt allows Motorola and Cisco to maintain their positions as duopoly providers of CAS in the US," Massillon president Robert Gessner claims in the filing.

Massillon launched the complaint soon after it completed an all-digital transition using DVB-based Digital Terminal Adapter (DTA) devices from Evolution Broadband LLC , freeing up spectrum for more HDTV services and channels for Docsis 3.0. (See Moto CMTS Powers Massillon's Docsis 3.0 Rollout.) Massillon says it has integrated two conditional access systems: Motorola's (for its legacy digital video platform) and Conax AS 's (the system embedded in the Evolution boxes). (See FCC Believes in Evolution-ary DTAs.)

However, the Conax implementation hasn't gotten beyond the "proof-of-concept" stage. "Due to the unavailability of SimulCrypt, we have not implemented it on a wide-scale basis," Gessner wrote.

Motorola declined to comment on the Massillon filing, but has noted that it's been involved in previous SimulCrypt projects in the U.S. and holds patents related to the technology. It has also expressed the notion that U.S. operators have not pursued full deployments of SimulCrypt because the system is complex and expensive to operate.

Cisco, which has been providing CableCARDs and CableCARD set-tops since the FCC ban on separable set-top security took effect in July 2007, counters that its "equipment works with SimulCrypt, and we are working with multiple customers in the U.S. and internationally to support this," according to an email from a company spokeswoman. "Cisco sees no need for government regulation." (See Boxing Up 'Seven-Oh-Seven' .)

In fact, Cisco has recently touted the benefits of SimulCrypt for cable settings outside the U.S., for IPTV deployments, and even as an option to ride alongside CableCARD-based security. Last May, Cisco engineering exec Tony Wasilewski wrote that SimulCrypt "has not traditionally generated a great deal of interest with the North American MSOs, [but] there have been international CATV deployments of SimulCrypt and there is evidence of interest in the IPTV world."

SimulCrypt in the U.S.
Cablevision Systems Corp. (NYSE: CVC) operates the most successful domestic deployment of SimulCrypt in the U.S., able to descramble both Cisco's PowerKEY and NDS Ltd. 's conditional access system. Scientific-Atlanta (now part of Cisco) got that digital set-top and headend deal in part because it agreed to support dual conditional access systems.

Before that, the highest-profile attempt at SimulCrypt in the U.S. happened almost 10 years ago. MediaOne (now part of Comcast) launched a trial in 1999 that ran the legacy General Instrument (now Motorola) CAS and boxes alongside Royal Philips set-tops operating the Canal Plus MediaGuard encryption system and feeding off a DiviCom (now part of Harmonic) headend. Clear? AT&T Broadband (also now part of Comcast) bought MediaOne a year later and scrapped the trial the following year, citing the technical complexities of that sentence system.

Sony Corp. (NYSE: SNE) took a stab at the idea in 2002 with "Passage," another SimulCrypt-like system that would allow for the concurrent operation of another CAS, and smooth Sony's entry into the U.S. cable set-top market. Charter Communications Inc. (Nasdaq: CHTR) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) licensed and tested Passage, but not much more came of it.

Clearing up SD
Massillon is also asking the FCC to require programmers to allow the distribution of unencrypted SD basic cable channel signals, arguing that consumers who purchase new digital TVs with QAM tuners will likely want to have the option of obtaining basic channels without having to rely on a separate box for decryption.

Massillon doesn't expect programmers to send their basic HD signals in the clear, given their higher value to cable service pirates. But it says Digital-to-HDMI converters, can fill the void that exists between no set-top (and very limited service) and an advanced, more expensive, two-way set-top.

Massillon says SimulCrypt is necessary in this instance, too, because Moto and Cisco currently do not offer low-cost, one-way HD boxes. It so happens that Evolution does have one on its roadmap and recently applied for a three-year waiver for it at the FCC. (See Nagra, Evolution Seek DTA Waivers, Evolution Guns for HD Box Waiver , and Massillon Has Eyes for HD-DTAs.)

— Jeff Baumgartner, Site Editor, Cable Digital News

Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.