Published:
15-Jun-09
The Federal Communications Commission (FCC) has granted two key exemptions to its ban prohibiting cable operators' deploying set-top boxes (STB) with integrated conditional access (CA). Evolution Digital has been granted a 3 year waiver allowing it to supply Digital Terminal Adapters (DTA), with integrated CA from Conax, to any cable TV operator in the US. DTAs are very basic STBs, capable only of converting digital video signals to analogue. They do not have EPGs, PVRs or the interactive capabilities required to deliver on-demand content. Cable TV operator Cable One has also been granted a waiver, which will permit the trial deployment of HD capable DTAs on its Dyersburg, Tennessee network.
Cable operators have been banned from supplying STBs with integrated CA to subscribers since July 2007. The aim of this legislation was to prevent operators from charging excessive monthly rental fees for STBs by creating an open retail market for subscriber owned STBs and integrated digital TVs. The ban, by making operators technology reliant, was put in place to ensure operator support for separable CA modules known as Cablecards, which grant subscribers access to encrypted content for use in their own devices.
Our take...By granting these waivers the FFC has acknowledged that the deployment of inexpensive, low-capability STBs with integrated CA does not undermine its integrated CA ban. This ruling will be vital to many operators looking to DTAs as a way of expediting the conversion to all-digital networks. Operators, including Comcast, are beginning to install $40 DTAs in basic analogue subscriber homes as well as on secondary TV sets in premium subscriber homes. Once this process is complete the analogue signals can be terminated and the bandwidth reclaimed for use with high value advanced services. These services, which include EPGs, PVRs and VoD, require STBs which must still comply with the integration ban; this in turn ensures cable operators' reliance on and continued support of Cablecards on their networks.
Being able to deploy DTAs with integrated CA will effectively allow operators to all but eliminate the piracy that currently plagues analogue cable networks, which in turn will render up-selling premium content to those low value customers a much more viable business case. The potential to up-sell HD content to basic subscribers could also temporarily stall price-sensitive, independent operators' DTA rollout. They will be weighing the one-off cost of creating an all HD DTA installed base versus the cost of deploying SD DTAs now and upgrading to HD later. Alternatively, larger national operators will likely use HD content to leverage the sale of advanced services as they continue to deploy SD DTAs.
Whilst Evolution's waiver will no doubt generate some revenue for itself and its Korean DTA supplier Homecast, the FCC has taken care to create a competitive market for DTAs. It has invited other manufacturers to apply for similar waivers, promising expedited reviews of all requests. Motorola, Pace and Thomson, whose DTAs are being deployed by Comcast, are likely applicants for waivers. Their DTAs have a light CA from Motorola embedded in the chipset which has not yet been activated but could be if waivers were granted.
USA,
