Cable ONE Sizes Up EchoStar, TiVo Set-Tops

EchoStar Corp. LLC (Nasdaq: SATS) and TiVo Inc. (Nasdaq: TIVO) are in the mix at Cable One Inc. as the MSO considers which horse to ride for a new, advanced set-top box platform, Light Reading Cable has learned.

Industry sources familiar with those talks say the operator is in discussions with both companies but has yet to make a final decision, though it is said to be particularly intrigued by the video place-shifting capabilities that EchoStar brings to the table with its SlingLoaded HD-DVR boxes. (See EchoStar: We're Cable's Answer .)

As for possible timing, it's understood that Cable ONE probably won't make any big buying decisions until after the Federal Communications Commission (FCC) acts on some new CableCARD-related rules that could provide exemptions that would allow Cable ONE and other MSOs to buy and deploy hi-def Digital Terminal Adapter (DTA) devices with embedded security. (See FCC Inches Towards Net-Agnostic Gateways.)

Cable ONE is still the only MSO to possess such a waiver, though what it actually has in-hand limits HD-DTA deployments to one small system deployment in Tennessee. For that, Cable ONE has already put in a purchase for about 25,000 HD-DTA boxes from Digital Multimedia Technology Co. Ltd. (DMT) outfitted with security from Nagravision SA , according to sources. (See Scoop! Cable ONE Makes HD-DTA Picks .)

How Cable ONE proceeds on the advanced box front will likely depend on how well deployments of those relatively low-end HD-DTA boxes go, and wait until after it gets more clarity on how the new FCC proposal will effect the existing separable security rules. Regardless of how all that shakes out, it's understood that Cable ONE remains interested in moving to a video platform that doesn't use the conditional access systems of the US duopoly of Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO).

But whatever choice it does make on the advanced box side, Cable ONE will still likely have to start with devices that support CableCARDs and adhere to the FCC's integrated security ban.

To date, CableLabs has qualified CableCARDs from Motorola, Cisco, NDS Ltd. , and, most recently, from Evolution Digital LLC, which has developed a module based on Conax AS 's video security system. (See CableLabs Blesses Evolution's CableCARD .)

Nagravision, which is already in the door at CableONE for HD-DTA security, has not announced any plans to develop a CableCARD for the US cable industry. However, it would hardly take an Act of God to get that done rather quickly. Nagravision shares corporate ties with SmarDTV, one of the few companies on the planet that makes CableCARD modules, through parent company Kudelski Group .

Deal could mean more for EchoStar
Getting the Cable ONE deal would be a big boon for EchoStar. The technology and set-top spinoff has been eager to break into the cable box business, but it's fighting to get a foothold despite the stigma of being connected to cable rival Dish Network LLC (Nasdaq: DISH) and its leader, Charlie Ergen.

Even if EchoStar came up short of a bona fide box deal at Cable ONE, the MSO could still take advantage of EchoStar's video place-shifting capabilities by buying and pairing standalone Slingboxes with legacy set-tops or more advanced TiVo DVRs.

EchoStar hasn't announced any cable deals, but is believed to have a box deal cooking with Germany's Unitymedia GmbH . EchoStar CEO Mike Dugan said on the company's most recent earnings call that undisclosed US MSOs are currently evaluating some of his company's products, and that he has seen interest pick up in recent months. (See EchoStar Gains Foothold at Unitymedia.)

If Cable ONE, with about 720,000 customers in 19 states, goes with TiVo, it would mark just the latest in a string of domestic cable deals for the DVR pioneer. It already has agreements with some large MSOs, including Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , and RCN Corp. , and is trying to make waves in with Tier 2 operators. (See RCN to Expand TiVo 'Premiere' Rollout and TiVo Covers Its Cable Bases .)

Cable ONE and the suppliers in question declined comment on this story.

— Jeff Baumgartner, Site Editor, Light Reading Cable

bbahlmann 2/17/2014 | 9:44:53 AM
re: Cable ONE Sizes Up EchoStar, TiVo Set-Tops Interestiing, has the FCC ever changed its stance on integrated security as referred to in this article?

Back when the first DTAs were being developed, most of them already had security built into the SoC. It was just disabled by default, but could be easily lit up with with a simple configuration change.

So, I guess it is a little weird that FCC is holding anyone back - other than I guess to make everything official and allow operators to use functionality they have already deployed in their networks - only just haven't yet used unless they have a waiver.
Jeff Baumgartner 12/5/2012 | 4:35:20 PM
re: Cable ONE Sizes Up EchoStar, TiVo Set-Tops

Not sure why this didn't dawn on me right away, but it is truly ironic that TiVo and EchoStar appear to be battling for this business at Cable ONE as they continue to battle it out in court.  JB

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