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Conax: Blankom Must Go Through Evolution

Jeff Baumgartner
10/21/2008

If Blankom USA LLC wants to pitch integrated digital video systems to North American cable operators using the Conax AS conditional access (CA) system, it must obtain rights for it through Evolution Broadband LLC .

Conax and Evolution Broadband announced an exclusive partnership for the North American cable market earlier this week, but there were questions about whether a previous relationship between Conax and Germany-based Blankom Antennentechnik GmbH would enable Blankom's domestic division to sidestep the exclusivity pact and purchase CA products directly from Conax's Oslo, Norway headquarters. (See Evolution, Blankom Scrum Over Conax , Blankom Plays US Digital Video Card , and Evolution, Conax Sign Exclusive Deal.)

Conax COO and director of sales and marketing Geir Bjørndal clarified that situation in an email to Cable Digital News Tuesday evening, stressing that Blankom must go to Evolution if it intends to use the Conax CA in tandem with any integrated digital video systems it plans to offer to North American cable operators.

"But let it be clear. Conax and Evolution have entered into an exclusive deal for the North American cable market. Conax CA is only available through Evolution, in North America, and cannot be bought directly from Oslo, Norway," Bjørndal wrote.

But what about that previous business relationship between Conax and Blankom? Bjørndal has acknowledged that Conax sent an offer to Blankom's Germany-based division in the spring to use the firm's CA system. Although Blankom has yet to place an actual order, it intends to do so "very soon," Gerhard Franz, president of Blankom's U.S. operations, said in an interview earlier this week.

Bjørndal stated earlier that Conax would honor that original offer, which came together before the exclusive deal with Evolution was announced. However, Bjørndal now describes that an isolated situation, rather than a "general rule," that has no bearing on Blankom's intended use of the Conax CA in the North American cable market.

Blankom had previously indicated that it has no intention of obtaining the Conax CA through Evolution, noting that Blankom and Evolution are head-on competitors in the North American cable market.

A statement from Franz today did not address whether Blankom has changed its mind, but that door appears to be open.

“Blankom Antennentechnik GmbH and Blankom USA work with many vendors in providing the cable operator with the system solution that best fits their needs at affordable prices. We’re happy to work with all vendors and their distribution channels," Franz said, in the prepared statement.

Evolution and Conax, meanwhile, have developed a CableCARD that carries the Evolution label and uses the Conax encryption system. Evolution has submitted the device to CableLabs for qualification testing, with the hopes that it can be paired with a new line of set-tops that adhere to tru2way specifications.

"They [Evolution] have shown a commitment and have made investments to open up this [North American cable] market" for Conax, Bjørndal said.

As an aside, Bjørndal confirmed that Conax's existing agreement with Transparent Video Systems Inc. (TVS) for the North American cable market still stands because that deal was completed well before Conax and Evolution announced their exclusive pact last week.

Still to be determined is how the Evolution-Blankom tiff will affect NexHorizon Communications Inc. , which is using Blankom headends to upgrade a system in Chula Vista, Calif. (See NexHorizon Taps Blankom.)

Blankom intends to provide NexHorizons with a fully-integrated system, but Franz says it's up to the operator to decide which CA system and set-tops it will use. NexHorizon officials were not immediately available for comment Tuesday afternoon and have yet to return a call seeking comment.

— Jeff Baumgartner, Site Editor, Cable Digital News

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