Huawei, Echostar, and others apparently see a chance to crack the US cable market, as Cable ONE tries to squeeze down the price of its HD set-top

Jeff Baumgartner, Senior Editor

November 25, 2009

5 Min Read
Cable ONE Seeks $50 HD Box

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

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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