ACE Plan Would Let MSOs Sell Old Set-Tops

The idea that cable's tru2way effort would spark the retail market for set-tops in the U.S. died on the vine, but a waiver request circulating at the Federal Communications Commission (FCC) could keep it going, albeit it for old, refurbished boxes. (See Tru2way: Epic Fail at Retail.)

Adams Cable Equipment Inc. (ACE), a distributor of such gear, is asking the FCC to grant a waiver that would let cable operators sell a wide range of boxes with integrated security directly to customers while limiting access to models that are compatible with the cable system in question. As part of the pitch, ACE is also offering to ship the boxes with self-installation instructions and to provide a one-year warranty on set-tops sold at retail.

Such a waiver is needed because the FCC has banned the use of integrated security boxes since July 2007. The Commission has, however, granted blanket waivers to a bunch of simple, inexpensive one-way Digital Terminal Adapter (DTA) devices, including a new breed of HD-capable models, to help MSOs with their all-digital projects. (See Countdown to 'Seven-Oh-Seven', FCC Believes in Evolution-ary DTAs, Comcast Lights Up DTA Encryption and Comcast HD-DTAs Reach the FCC.)

ACE's request is being modeled after the FCC's already granted waivers for DTAs in that it will aim to cover a number of box types, says Paul Hudson, a lawyer with Davis Wright Tremaine LLP, the firm representing ACE.

One big difference is that the ACE waiver will attempt to allow the sale of more advanced, interactive boxes, including models with on-board DVRs -- an idea that's likely to draw opposition from the Consumer Electronics Association (CEA) , which balked at the original DTA waiver proposals and is now pushing the FCC to pursue AllVid, a potential successor to the current CableCARD rules. (See Google, TiVo & Best Buy Rally for AllVid.)

ACE also hopes to replicate a set-top sales model it's implemented with Baja Broadband, an MSO that scored a rare permanent waiver in 2010 to purchase and deploy refurbished boxes. It got the waiver on grounds that it couldn't afford more expensive boxes outfitted with CableCARDs while also committing to sell those boxes directly to customers. Baja Broadband, an operator serving small pockets of Colorado, Utah, New Mexico and Nevada, sells integrated security set-tops made by Motorola Mobility LLC in tandem with ACE.

If approved by the FCC, ACE's idea would likely generate interest from cash-strapped independent operators, but it could apply to larger MSOs, too.

"In theory, it would be available to any operator who wanted to participate," Hudson said. "Our expectation is that it's going to be primarily for smaller operators, which have been more interested in refurbished boxes from third parties."

— Jeff Baumgartner, Site Editor, Light Reading Cable

joanengebretson 12/5/2012 | 5:44:04 PM
re: ACE Plan Would Let MSOs Sell Old Set-Tops

I wonder if small cable operators can save enough by using refurbished cable boxes to free up the money they need to cover accelerating content costs.

Jeff Baumgartner 12/5/2012 | 5:44:03 PM
re: ACE Plan Would Let MSOs Sell Old Set-Tops

I think they'd agree with that notion, that they could apply those savings toward other parts of their business, and getting content at reasonable terms is defintely a tough area for all tier 2/3 operators.  Or they could claim that they'll need that extra cash to fund other types of upgrade activities such as Docsis 3.0.  At least that was one of the arguments that CableOne put forth when it originally pursued a waiver for HD-DTA boxes... and the FCC agreed. JB

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