Charter Communications and Verizon are the latest service operators to formally request that the FCC waive an upcoming ban on the distribution of digital set-tops with integrated security.
Over the summer, Charter requested that the FCC okay a waiver on certain "low-cost" digital set-tops. Verizon, meanwhile, has asked for a waiver pending deployment of downloadable security, considered a less expensive and more elegant replacement for the removable CableCARD.
In August, the National Cable & Telecommunications Association put in a formal request seeking an extension on a mandate that would prohibit cable operators from deploying digital set-tops with embedded security as of July 1, 2007.
At the time, the NCTA noted that the re-engineering required to enable leased devices to work with CableCARDs would add $72 to $93 per box, with direct costs to the cable industry of more than $500 million per year. Some costs would also have to be leveled on consumers, who would end up paying between $2 to $3 more in monthly lease charges for devices that use CableCARDs to authorize cable services. At last count, U.S. cable operators had deployed more than 200,000 CableCARDs.
Although that number is relatively small, operators have lamented technical and compatibility issues with CableCARDs and the slots they slide into. NCTA recently disclosed in a filing that Cablevision Systems Corp. found that 63 percent of CableCARD issues reported by customers could be traced to the host (TV). Charter Communications, meanwhile, claimed 100 percent of the issues were tied to CE equipment.
To help remedy these compatibility and cost issues, the U.S. cable industry is working on a Downloadable Conditional Access System (DCAS). PolyCipher, a non-profit joint venture linked to Comcast Corp., Time Warner Cable, and Cox Communications, is heading up that project. Operators have already invested more than $30 million in the establishment of PolyCipher.
Although Verizon is a cable competitor, its request to pursue downloadable CA systems could aid cable's wavier-seeking position.
In comments made to the FCC, the NCTA argued that Verizon, a cable competitor, "makes a strong case that a waiver is appropriate and in the public interest because a less costly and more efficient solution to achieve the goal of the ban is on the horizon, i.e., the prospect of downloadable security."
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