Hatboro, Pa. -- General Instrument Corp. completed its
planned acquisition of the access-control and encryption portion of Tele-Communications
Inc.'s Headend in the Sky service last week, executives said.
GI announced plans to acquire the security portion of HITS
earlier this year, at the same time when it trotted out plans to issue warrants to nine
cable operators, including TCI, upon shipment of the advanced-digital set-tops that the
MSOs had ordered.
Now, GI officially takes over the assets and licensing
rights to operate the set-top-authorization business -- the heart of HITS, which controls
the receipt of cable-programming services delivered to subscribers.
As part of the now-finalized deal, GI will transfer
21,356,000 newly issued shares of its stock to TCI, representing about 10 percent of
GI's fully diluted equity securities.
Ed Breen, chairman and CEO of GI, said in a prepared
statement that the HITS encryption technology is "one that we are very familiar
with," and that GI "looks forward to being able to fully market to cable
operators across the country the secure transmission of an array of digital-cable
Cable operators that haven't yet signed with HITS have
said that they're wary of placing key access-control and encryption techniques in
TCI's hands. The GI deal was intended to mitigate those concerns, executives have
"It has been a long-term goal of TCI to make the HITS
authorization-center services available on a cable-industry basis," said David
Beddow, senior vice president of TCI Technology Ventures Inc.