$1B Set-Top Deal for Comcast, Moto

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Comcast Corp. and Motorola Inc. Tuesday announced “a broader strategic relationship” that includes an agreement for a multiyear set-top commitment valued at more than $1 billion.

The deal marks the largest set-top-purchase agreement in the MSO’s history, Comcast said. Motorola will provide HD digital-video recorders, as well as standard-definition entry-level models.

The two companies will also form two joint ventures focused on next-generation conditional-access technologies. As part of that initiative, Motorola granted the ventures a nonexclusive license for its “MediaCipher” conditional-access technology.

The first joint venture, managed by both companies, is charged with developing next-generation conditional-access systems. The second will focus on licensing conditional-access systems and other cable technologies to U.S. cable operators and other parties, such as content players. Comcast will manage that joint venture.

The move allows Comcast to direct development and assume a greater degree of control over future conditional-access systems, including software that is directly downloaded to set-tops or two-way-enabled TVs purchased by consumers at retail.

The Motorola deal is patterned after Comcast’s Guideworks joint venture with Gemstar-TV Guide International Inc., which allows the MSO to take core software from an outside vendor and bring future development of that application in-house.

“This partnership with an industry leader like Motorola will help us to continue to aggressively advance our interactive digital platform and more rapidly develop and deploy video products," Comcast chief operating officer Steve Burke said in a prepared statement.

“This is part of Comcast's continued focus on the development of industrywide specifications for key components of set-top boxes -- including conditional-access systems, interactive program guides and middleware -- that will help to add consumer value and reinforce cable's position as the provider of choice for home entertainment and information,” Burke added.

“By extending our relationship with Comcast for conditional access and set-tops, we continue to drive innovation for advanced digital-cable services," Motorola executive vice president and president, Connected Home Solutions business Dan Moloney said in a prepared statement.

“Further, with these announcements today, Motorola has established itself as a key technology partner to Comcast, and we look forward to exploring together a broad array of future services, leveraging our strength in voice, video and data,” Moloney added.

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