Are the DTA Floodgates Opening Up?

The Federal Communications Commission (FCC) 's blessing of Digital Terminal Adapter (DTA) devices from four big cable box makers on Monday could spark much broader deployment of the simple digital-to-analog "channel zappers" as MSOs figure out how to reclaim spectrum for beefier HDTV lineups and speedier Docsis 3.0 cable modem service tiers.

Comcast Corp. (Nasdaq: CMCSA, CMCSK) is the reigning DTA champion, using the devices to help fuel "Project Cavalry," an all-digital migration that will require about 25 million DTAs and cost about $1 billion to complete. (See Comcast's $1B Bandwidth Plan .)

But Heavy Reading senior analyst Alan Breznick expects many more MSOs to take the plunge now that Cisco Systems Inc. (Nasdaq: CSCO), Motorola Inc. (NYSE: MOT), Thomson S.A. (NYSE: TMS; Euronext Paris: 18453), and Pace Micro Technology all have FCC-approved DTAs in their product portfolios. (See FCC Approves DTAs From Moto, Cisco, Thomson & Pace, Comcast's $1B Bandwidth Plan , and Comcast Seeds Digital Shift With Free Boxes.)

"Now that the big vendors have permission to churn out these DTAs for their customers, I think we're going to see them all over the place, particularly among mid-sized and smaller operators that can't afford to do switched digital video… but can make hay with these cheaper set-tops," Breznick says. (See DTAs Sidetrack Cable SDV .)

He also thinks some other major MSOs will follow suit. However, Breznick speculates that big switched digital video (SDV) supporters, such as Time Warner Cable Inc. (NYSE: TWC), Cablevision Systems Corp. (NYSE: CVC), and Bright House Networks , may stay on the DTA sidelines. He also questions whether Cox Communications Inc. would field a DTA-enabled spectrum management plan when it's already far along with some SDV deployments and a much broader 1 GHz bandwidth expansion strategy. (See Cox Makes 1 GHz Moves .)

But just about everyone else is a potential DTA candidate, Breznick says. Some operators that were on the fence about a DTA strategy before the FCC order came down Monday are now much more interested in it, but aren't ready to publicize their specific intentions just yet.

MSOs contacted by Cable Digital News weren't willing to speak on the record about any specific plans involving DTAs spawned by Monday's big batch of waivers, but two of the 10 largest incumbent U.S. MSOs said the green light from the FCC will certainly expedite any strategy involving the simple, one-way, $35 devices.

"This [waiver] is what we've been waiting for," said an engineer with a major U.S. cable operator. "We're glad Comcast pioneered this and pushed it forward. The ability to use encryption in DTAs makes this [strategy] so much more attractive."

But even if DTAs cost less than $35 each -- less than a third the unit cost of an interactive, entry-level (non-HD-DVR) box with a CableCARD interface -- the strategy isn't necessarily a fiscal slam dunk in this belt-tightening economy. "There's still the capital question to consider," the MSO exec adds. "But it's safe to say that we'll be exploring the use [of DTAs] in the 2010 timeframe."

An official with another top 10 U.S. MSO said they were "delighted" to get word on the latest batch of waiver requests, noting that the FCC approvals "would expedite our deployment" of DTAs.

MSOs mum on DTA encryption
Officials for Comcast and Mediacom Communications Corp. , two MSOs that are already deploying DTAs in multiple systems, weren't ready to say if and when they would activate "Privacy Mode," a fixed-key content protection scheme that's burned into the DTA models made by Moto, Cisco, Pace, and Thomson, but requires a firmware update for activation. By contrast, the FCC-approved DTAs from Evolution Broadband LLC embed a full-fledged conditional access system from Conax AS . (See FCC Believes in Evolution-ary DTAs.)

Mediacom, which is using DTAs aggressively in markets that are already all-digital or simulcasting every analog channel in the digital domain, "rolled out the platform with the understanding that we wouldn’t use the Privacy Mode feature," says the MSO's VP of legal and public affairs, Thomas Larsen. He adds that Mediacom has not made any decisions about changing that strategy following Monday's round of FCC waiver approvals.

Comcast has already deployed more than 2 million DTAs in markets including Seattle, San Francisco/Bay Area, Chattanooga, Philadelphia, Atlanta, and Portland, Ore., with all of those devices running without content protection enabled. A spokeswoman declined to say when Comcast might activate Privacy Mode.

— 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.

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