Charter Communications Inc. has exercised an exit clause in its contract with Cable Television Laboratories Inc. that would allow it to withdraw from the consortium in three years, CableLabs CEO Richard Green said last week.
CableLabs — the research-and-development group funded through monthly dues paid by its 53 MSO members — was notified by Charter in a letter sent on April 4, Green said.
Both Green and Charter spokesman Dave Andersen downplayed the move, insisting it does not signal that the MSO will pull out.
All CableLabs members must give the consortium three years' notice if they want to withdraw membership, Green said. "Many companies exercise that right to notify us, and then they renew it every year," he added.
Green said CableLabs members pay monthly dues of 2 cents per subscriber At that rate, Charter — which counts 6.8 million basic subscribers — would save $1.6 million per year by pulling out.
Charter spokesman Dave Andersen termed the letter a formality. "It's smart in today's business environment to leave your options open," he said.
Charter CEO Carl Vogel sits on the executive committee of the CableLabs board of directors. About a month ago, Green said, Vogel informed him that the MSO planned to send the letter.
CableLabs, which was founded in 1988, has led industry initiatives to create interoperable hardware, through initiatives like the Data Over Cable Service Interface Specification for cable modems and the OpenCable project, which aims to create interoperable set-tops that could eventually be sold through retail outlets.
Charter wouldn't be the first major MSO to leave the consortium. Cablevision Systems Corp. pulled out of CableLabs a few years ago.
"In order to be a member of CableLabs, you have to spend a lot of time," Cablevision executive vice president of engineering and technology Wilt Hildenbrand said in a December interview. "We found we weren't devoting the time to it."
Both Cablevision and Charter have pursued unique hardware rollouts, compared to the rest of the industry. Cablevision is rolling out a digital platform based on a Sony Corp. platform, while Charter plans to rollout high-end set-tops designed by Digeo Inc., a company owned by Charter chairman Paul Allen.
Green said Charter officials haven't told him that they have concerns involving the direction of the technology that CableLabs is pursuing. CableLabs also wants to incorporate the technology Charter is developing with Digeo, Green said.
"In the area of cable set-tops and advanced video services, Charter has a lot of capability in that area, because they've got business associations through Paul Allen, and we are very interested in taking advantage of that knowledge and capability," Green added.