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A Charter-TWC Deal Could Trip Up RDK

Platform Not Part Of Charter's Set-Top Strategy 1/20/2014 12:00 AM Eastern

Comcast and Time Warner Cable joined forces on the Reference Design Kit last year in part to give the preintegrated software platform for set-tops and gateways more volume and scale, but Charter’s proposed takeover of TWC threatens to slow down those efforts.

Comcast is already moving forward aggressively with the RDK in boxes that power its new X1 platform. TWC has yet to deploy RDK boxes, but the company has said it intends to use it in next-generation, Internet protocol-based gateways and video clients as it pushes a plan to establish a common software layer that can also be extended to multipurpose gateways that also support TWC’s voice and broadband services.

‘WORLD’ BEYOND RDK

Charter’s strategy for next-generation video clients, which includes a cloud-oriented device it’s internally labeling the “World Box,” has nothing to do with the RDK. Instead, Charter has essentially aligned with a technology strategy underway at Cablevision Systems that will use a downloadable security platform and a non-RDK software stack, according to industry sources.

Charter and Cablevision Systems are closely enough aligned on the matter that executives from both companies have held multiple tech-oriented meetings each month as part of an effort to assist with Charter’s implementation, people familiar with those meetings said.

Charter “is not seriously considering the RDK,” says a source who is close to Charter’s plan. “Their strategy is set for the next 12 to 18 months. There are no technology synergies between Time Warner Cable and Charter” when it comes to new set-tops and gateways that are in the development pipeline, the source added.

But Charter is not ignoring the RDK completely. Sources said several Charter engineers are keeping close tabs on RDK developments, but acknowledge that Charter has not made any commitments to use it.

The wild card in this is Liberty Global, which now holds a 27% stake in Charter. Unlike Charter, Liberty Global has been a vocal supporter of the RDK.

LIBERTY BELIEVES

At the SCTE Cable-Tec Expo in Atlanta last October, Bill Warga, vice president of technology at Liberty Global, said on a panel that the MSO will use the platform to assist its migration of the user interface for its new Horizon video platform to the cloud.

If Charter is successful in acquiring TWC, the fate of the RDK at the combined company will likely be determined by how far along TWC is by then with its rollout. If TWC is already well downstream with the RDK, it might not make financial sense for Charter to pull that all back. If TWC RDK trials and deployments are at an early stage, it’s possible that Charter could move swiftly to unify everything under the non-RDK platform it’s working on now.

A person with knowledge of the strategy of RDK Development LLC, the Comcast-TWC joint venture in charge of managing the software stack, said the venture is working with operators of all sizes, but for the sake of scale it is focusing the bulk of its efforts on large global MSOs such as Rogers Communications, Liberty Global, Kabel Deutschland and Cox Communications, which has been evaluating the RDK.

While the current, most formal endorsements by Comcast and TWC give the RDK the initial scale it will need to achieve significant volumes, RDK suppliers along the entire ecosystem — from the chipsets, to the software to the boxes themselves — are keeping a watchful eye on how the landscape might shift, should TWC fall into Charter’s hands.

TAKEAWAY

A Charter takeover of Time Warner Cable could take out a major backer of the Reference Design Kit, delaying the nextgeneration set-top platform’s development.

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