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Cable ONE Seeks $50 HD Box

Jeff Baumgartner
11/25/2009

Cable One Inc. 's quest for an ultra-cheap, high-definition set-top box could be a big break for some vendors that are trying to crack the tough U.S. cable market, but only if they can squeeze the price down to $50 per unit.

Huawei Technologies Co. Ltd. , EchoStar Technologies, Irdeto Access B.V. , Latens Systems Ltd. , and Pace Micro Technology are among the box makers and conditional access system providers vying for the MSO's business, according to a recent Cable ONE filing that's asking the Federal Communications Commission (FCC) for more time to complete an all-digital conversion.

That project relies on a new breed of one-way box that Cable ONE calls the "HD-capable, all-digital device" (HD-ADD).

Cable ONE's plans went into high gear on May 29, when the FCC granted a waiver for the MSO's Dyersburg, Tenn., system, allowing deployment of HD-ADDs with embedded security. The waiver lets Cable ONE sidestep the FCC's 2007 mandate. (See Cable ONE Snares HD Set-Top Waiver and Countdown to 'Seven-Oh-Seven'.)

That system serves just 6,400 subscribers, but a successful deployment there could set the table for similar deployments by Cable ONE and other Tier 2 and Tier 3 MSOs that want to go all-digital using inexpensive boxes that can display HD.

But Cable ONE's waiver is weighted down with stipulations. Cable ONE pledged to migrate the system to all-digital within one year of getting the waiver; to provide at least 50 HD channels alongside a tier that simulcasts those channels in standard definition; and to provide one hi-def box to subscribers at no cost and offer additional HD-ADDs for a monthly fee of no more than $1 per month. Cable ONE also promised to continue supporting retail TVs and set-tops that use the CableCARD security interface.

In a modified request filed November 20, Cable ONE is now asking the FCC to give the MSO until Jan. 31, 2010, to place orders for "sufficient" one-way HD-ADDs for the digital conversion in Dyersburg. It also wants allowances to complete the all-digital transition and launch its 50 HD networks within six months after the delivery of the necessary HD-ADD components.

Hard target: $50
Part of the problem is that Cable ONE's plan largely hinges on getting the boxes for $50, well below the $300 to $400 the MSO estimates it would cost to purchase two-way boxes with removable CableCARD security modules. Cable ONE estimates it will need up to 21,000 HD-ADD devices for its Dyersburg conversion.

Cable ONE is talking to vendors, but according to the filing, "at present [Cable ONE's emphasis], none of the potential options results in the availability of an HD ADD at the requisite wholesale price of $50 or less."

Who's Cable ONE talking to? Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO), which make up the U.S. cable set-top "duopoly," are in the mix. But so are a number of others that are trying to break into the U.S. cable market, including EchoStar, Huawei, Latens, and Conax AS . (See Huawei Seen as Likely Moto Suitor, Huawei Breaks US Set-Top Seal , and EchoStar: We're Cable's Answer .)

Table 1: In the mix

Vendor Hardware Software/User Interface Conditional Access
Beyond Broadband Technologies (BBT) -- -- X
Cisco X X X
Conax -- -- X
Coship X -- --
DMT X -- --
EchoStar X X --
Evolution Broadband -- X --
Homecast X -- --
Huawei X -- --
Humax X -- --
Irdeto -- -- X
Latens -- -- X
Motorola X X X
Nagravision -- X X
NDS -- X X
Pace Micro Technology X -- --
Rinatto X -- --
Thomson X X --
Ubee Interactive X -- --
Source: Cable ONE




Cable ONE thinks suppliers will be able to hit the price target, but acknowledged it's going to take longer than anticipated, considering some of the products under discussion aren't commercially available yet. Plus, if Cable ONE opts to mix and match software and hardware from multiple vendors, it will likely need time to complete the necessary integration work.

— Jeff Baumgartner, Site Editor, Cable Digital News

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kjuneja
kjuneja
12/5/2012 | 3:52:02 PM
re: Cable ONE Seeks $50 HD Box


 


Seems like Moto and Cisco have a duopoly because no other company has a product that integrates Hardware, User Interface, and Conditional Access in one box.


Simple solution to get the boxes down in price is to combine someone that has 2 of the above with another one that has the other.  Example, Beyond Broadband Technologies (Conditional Access) and Echostar (Hardware,Software/User Interface). 


 


300 dollars for a box that deencrypts mpeg4 signals is ridiculous in 2009.

Anti Duopolist
Anti Duopolist
12/5/2012 | 3:52:01 PM
re: Cable ONE Seeks $50 HD Box
Dear Kjuneja:
I have to respectfully disagree that there is no alternative integrated solution to Cisco and Moto. We (Evolution Digital), provide a complete turnkey digital solution, which includes:
- Conditional Access (Conax DVB CA), both in the form of a smart card, AND a Cablecard
- Set-top Hardware, in the form of low cost Mpeg 4 and Mpeg 2 HD and SD DTA's (embedded CA using Conax smart cards), as well as Tivo DVR's for advanced set-tops (using Conax Cablecard).
User Interface. All low cost DTA devices come with an integrated program list for channel navigation as well as parental controls, favorites list, etc and the advanced Tivo box comes with the industry's best UI.

Evolution was the first company to receive FCC product waivers for our SD DTA with embedded security, and we have already submitted a product waiver request for our MPEG 4/2 HD DTA with embedded Conax CA. I can assure you that the selling price for this unit is below $100, significantly below the ridiculous price of $300!
kjuneja
kjuneja
12/5/2012 | 3:52:00 PM
re: Cable ONE Seeks $50 HD Box








Duopolist, I was going off the information provided in the article.  There are certainly alternatives available, Tivo and Moxi come to mind, but they target a different set of consumers.  Its good to know there are alternatives out there.  


I'm still at a loss to understand why CE manufactures don't produce (or maybe publicize?) either a CableCard or Smartcard equipped box that is not a DVR.  The FCC mandated the security token cannot be integrated into the STB enabling these boxes to come to market, but it hasn't happened.  


There is a significant portion of the population that does not want DVR functionality (ruling out Moxi and TiVo) and does not want to pay monthly fees for a STB rental.  Between the fees for "digital outlets" and STB rental, the average customer is paying at least $5 a month (I'm aware most MSO's provide the first box for free).  FCC - I'm looking at you.  Or maybe you, Evolution Digital.  





 

Anti Duopolist
Anti Duopolist
12/5/2012 | 3:51:59 PM
re: Cable ONE Seeks $50 HD Box
Kjuneja, the major problem which is inhibiting the full integration of security and user interface into CE devices (i.e. TVGÇÖs), is the changing landscape on how content is distributed on cable networks. A number of major MSOGÇÖs are using switched digital to free up more bandwidth, which means any CE device would require a 2-way communication path with the cable operator. Additionally, operators are relying more and more on their VOD platform to deliver unique and discretionary content, which also requires a 2-way connection back to the operator. In both scenarios, the 2-way communication path is proprietary to the legacy CA system (Cisco or Moto). The only solution to this is for CE vendors to use a GÇ¥tuning resolverGÇ¥ device in conjunction with their TV or set top box, or to comply with the new Tru2Way specification. Again, in both of these scenarios, the cost and complexity to support 2-way communication goes up exponentially, which further inhibits wide scale adoption. We (Evolution) firmly believe that the best way for operators to move forward, and increase the level of service to their subscribers, is to convert to all digital, using low cost SD and HD devices (which could given away, rented, or purchased), and then use the reclaimed analog spectrum for more HD, and transition to an IPTV platform, using Docsis 3. Once operators move to IPTV, they can take advantage dramatically lower cost CPE devices, due largely to it being a more open and competitive platform. By the way, Tivo just announced that they are supplying their UI to non DVR set-tops ( see JeffGÇÖs recent article on Virgin Media). Hopefully this is a sign of more things to come!
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