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
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
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.