Top MSOs Deploy Nearly 20M CableCard Set-Tops

By Todd Spangler -- Multichannel News, 4/5/2010 2:57:01 AM

Cable operators continue to spend millions complying with the Federal Communications Commission’s separable-security rules, even though less than 2.5% of their customers have opted to use CableCards in standalone devices.

The 10 biggest cable operators have put into service more than 19.5 million set-tops with CableCards since the FCC’s so-called “integration ban” went into effect on July 1, 2007. By contrast, those MSOs have deployed just 489,000 CableCards for standalone devices, such as TiVo digital video recorders, according to a National Cable & Telecommunications Association notice filed last week with the FCC.

And the CableCard regime, which prohibits operators from deploying any advanced digital set-tops with integrated security, could become even more onerous: The FCC has proposed changes to go into effect later in 2010 that, among other things, would require operators to “standardize installation policies for retail and operatorleased CableCard devices” (see Rules).

Separately, the American Cable Association last week pressed the FCC to move forward on Evolution Digital’s eight-month-old request to exempt low-cost, limitedfunction HD set-tops from the separable-security requirements.

“In numerous filings in support of set-top box waiver requests, ACA has demonstrated the critical need for the availability of low-cost integrated set-top boxes to small and medium-sized operators,” ACA CEO Matt Polka wrote in a March 31 letter.

Evolution in July 2009 filed a petition with the FCC for a waiver for its HD digital terminal adapter — priced less than $100 — from the integrated set-top ban.

Low-cost digital terminal adapters, or DTAs, are designed to allow cable systems to free up spectrum by allowing operators to retire analog TV channels. The FCC in June 2009 approved Evolution Broadband’s request for a three-year waiver for standard-definition DTAs with integrated security functions.

According to Polka, the absence of low-cost, HD devices with integrated security is forcing cable operators to make a choice. They can purchase and deploy low-cost non-HD integrated set-top boxes. Alternately, they can wait to see whether the FCC will expand the applicability of the Cable One order — which allows that MSO to use low-cost HD boxes in one market — to permit any cable operator to purchase and deploy low-cost, limited-capability HD set-top boxes.

“The Commission’s delay in publicly addressing this issue — one that has been pending at the Commission since last year — is negatively impacting the marketplace and consumers, particularly in smaller markets and rural areas served by small cable operators,” Polka said.