Cablevision Inks S-A Set-Top Deal

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Less than one month after Cablevision Systems Corp. said it would look beyond
Sony Corp. to buy digital set-top boxes, the MSO announced a deal with
Scientific-Atlanta Inc. to buy 'Explorer 4200' boxes, headend gear and
associated software.

The deal has widespread implications. First, Cablevision will buy S-A headend
gear, effectively building a parallel network to its existing network -- an
unusual move for a cable operator trying to rein in capital expenditures.

Although Cablevision is looking for multiple set-top vendors, the deal would
appear to block Motorola Broadband Communications Sector from the picture, since
such a deal would require Cablevision to buy a third set of headend
equipment.

A second key element is the integration of NDS Ltd., which has supplied the
conditional access to Cablevision's Sony boxes.

NDS signed a nonbonding letter of intent to incorporate its
conditional-access technology into S-A's Explorer set-tops. It's the first time
S-A has signed a deal to put another conditional-access system into its box,
home to 'PowerKey.'

Cablevision foreshadowed the move during an analysts' meeting one month ago,
saying it was drastically reducing its commitment to Sony for set-top boxes.

The MSO -- which, at one time, contemplated buying 300,000-plus Sony set-tops
-- reduced its Sony financial commitment from $1.38 billion to $138 million over
the past few months.

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