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Charter Goes All-Digital in North Texas

Charter Goes All-Digital in North Texas 6/23/2013 8:00 PM Eastern

Charter Communications’ analog-reclamation plan took a big step forward last week when the MSO completed an all-digital upgrade in North Texas that covers Fort Worth and 40 surrounding communities, allowing it to reuse valuable spectrum toward HDTV and video-on-demand services.

Charter said the upgrade enabled it to clear out room for 80 additional HDTV channels, including ABC Family, BET, Cartoon Network, Fox News Channel, The Longhorn Network and MSNBC, and to expand its high-definition lineup in the region to 141 channels. The MSO’s VOD platform for North Texas now contains more than 12,000 on-demand “options,” including 2,500 titles in HD format.

The MSO has not completed all-digital upgrades in any other markets, a Charter spokeswoman said. But this initial conversion is one step toward the St. Louisbased MSO’s grand goal of going all-digital across the board. Charter, which halted the sale of analog video packages in mid-2012, is expected to concentrate initially on markets that have already achieved relatively high digital video penetration rates.

CABLECARDS DEALT IN

At this stage, Charter is using two-way CableCard-based set-tops to assist with its transition, eschewing simple, less expensive one-way digital transport adapters (DTAs) that MSOs such have Comcast have leaned on to power their analog reclamation strategies.

Charter plans to introduce a new type of dual-security box that supports an integrated version of its legacy conditional- access system alongside a new downloadable security platform.

In April, the MSO secured a conditional, two-year waiver from the Federal Communications Commission that cleared it to use boxes with integrated security to assist in its all-digital transition and its migration to the new downloadable system. Charter argued that developing dual-security boxes that relied on CableCards would be prohibitively expensive and delay the MSO’s all-digital migration.

But that part of Charter’s plan is getting some static. The Consumer Electronics Association has asked the FCC to perform a review of the Media Bureau’s grant of the waiver, holding that the bureau did not have the authority to make the decision. TiVo, meanwhile, has asked the FCC to reconsider the waiver and modify it in a way that requires Charter to continue to supply and support CableCards to customers who use retail devices. TiVo is also asking the FCC to clarify that the bureau has made no findings regarding whether Charter’s planned system or any other downloadable system complies with the integration ban.

2016 DEADLINE

As a condition of its FCC waiver, Charter has committed to converting 100% of its systems, including its entire rural footprint, to all-digital within nine months after the end of the two-year waiver. If Charter follows that timetable, it would complete the migration by the first half of 2016.

But Charter could end up completing the conversion sooner than that. In February, during Charter’s first-quarter earnings call held before the FCC waiver was granted, CEO Tom Rutledge said the MSO anticipated completing the all-digital migration by the end of 2014.

TAKEAWAY

Charter’s all-digital upgrade in North Texas is a major step forward in the MSO’s analog-reclamation plan.

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