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Huawei Gets Box Break at the FCC

The Federal Communications Commission (FCC) has granted a waiver to Huawei Technologies Co. Ltd. that gives the Chinese giant the green light to sell simple Digital Terminal Adapter (DTA) units with embedded security to US cable operators.

Huawei, using its North American subsidiary name of FutureWei , took its shot at the waiver last September, seeking special dispensation for two "limited capability" set-tops -- the DC-730 and the DC-732. Such waivers are required following a rule that took effect in July 2007 that bans MSOs from buying and deploying boxes with integrated security. (See Huawei Takes On US Set-Top Market, Countdown to 'Seven-Oh-Seven', and Verizon & Others Get Their Waivers.)

The FCC granted the waiver to Huawei despite a plea from another box maker, IPCO LLC, that asked the Commission to dismiss existing DTA waivers to avoid granting any new ones, claiming the waivers are killing IPCO's ability to sell cheap CableCARD-compliant boxes that adhere to the separable security rule. (See Box Maker Blames FCC for Everything.)

The FCC reasoned that Huawei's DTAs were no more advanced than two models from Evolution Broadband LLC that became the first to win such a waiver from the Commission last June. (See FCC Believes in Evolution-ary DTAs.)

The waiver gives Huawei the ability to sell its DTAs with encryption enabled. Industry sources recently said Suddenlink Communications and Mediacom Communications Corp. are among the early buyers for Huawei-made DTAs. It's also believed that the vendor has signed on to license "Privacy Mode," a content-protection scheme that's present (but not necessarily activated) in all of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s DTAs. However, it's not yet clear if Huawei has scored any set-top sales with Comcast. (See Huawei Breaks US Set-Top Seal and Comcast Lights Up DTA Encryption .)

In other FCC box action, Evolution also came away with the OK for three new DTA models -- a "Gen 2," smaller version of its original standard-definition DTA outfitted with the Conax AS conditional access system; a Gen 2 model that also supports MPEG-4; and a "uDTA" design that's can operate on legacy Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Inc. (NYSE: MOT)-based digital cable systems.

Evolution's also trying to obtain a waiver for an hi-def DTA, but the FCC has yet to take action on that one, according to Brent Smith, president of Evolution's digital division.

Huawei's got company: CoShip
Huawei isn't the only China-based vendor with DTAs on the menu that's also trying to make a go of it in the U.S. cable market. Coship Electronics Co. Ltd. recently filed for a waiver on two models -- the N5500C and N6600C -- claiming they are no more advanced than DTA's already approved by the Commission.

Comments and oppositions on CoShip's try are due to the FCC by Feb. 13, 2010.

CoShip's interest isn't a huge surprise. Last year CoShip was revealed as one of several vendors that's trying to get in the door at CableOne with a low-cost DTA that can display HD programming. (See Cable ONE Seeks $50 HD Box.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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