Cablevision Systems Corp. has inked a deal to deploy Scientific-Atlanta Inc. digital set-tops and headend gear in support of the MSO's ambitious digital cable service, iO: Interactive Optimum. Financial terms were not disclosed.
Cablevision said it will purchase an undisclosed number of S-A digital boxes, including the Explorer 4200, which will become available later this year.
The MSO will also buy S-A digital headend equipment and license related headend and application software. Cablevision said it plans to begin deploying S-A boxes to new digital customers this fall.
S-A becomes Cablevision's second source of digital set-tops. Sony Corp. was the first. News of a new Cablevision set-top vendor first bubbled to the surface on Aug. 8, when MSO executives disclosed that they had restructured Cablevision's hardware relationship with Sony and that it would begin to work with other set-top vendors.
Although Cablevision will add a new box to its digital mix, the MSO will retain its conditional access (CA) system, currently supplied by NDS Group. S-A said it will incorporate the NDS CA into Explorer set-tops. However, S-A digital headends that Cablevision eventually puts on its broadband networks will also support PowerKey, S-A's proprietary CA platform. Cablevision's S-A boxes, meanwhile, will continue to support the imbedded PowerKey CA, but leverage a smart card slot to run the NDS CA.
Cablevision, for now, expects to maintain NDS as its starting CA, and keep PowerKey in the bullpen. Wilt Hildenbrand, Cablevision's executive vice president of engineering and technology, said the MSO will continue to focus on the NDS CA, but will have the ability to use PowerKey "if we chose to at some point in time."
Hildenbrand also stressed that Cablevision will not have to run parallel networks to accommodate S-A's digital equipment, noting that most network elements will remain unchanged. "Architecturally, certainly at a high level, [there aren't] two different networks. They're just two different executions," he added.
Hildenbrand said both costs and factors facing the interactive television sector played a part in the decision.
iTV, for example, has become a less important focus as other aspects of digital television, such as HDTV, came into play, Hildenbrand said. Plus, the current set-up with Sony "was a little too expensive for the conditions right now," he added. "It was very, very hard for [Sony], without a user base like Motorola [Broadband], S-A or Pace [Micro Technology] had, to get the cost down to where it needed to go."
Although Cablevision has given special attention to S-A's Explorer 4200, a box that carries a price greater than $400 per unit, it's been speculated that the MSO is also interested in a new, less-expensive 1800-class box currently under development at S-A. To wit, Cablevision New York President Tom Rutledge told analysts during a second quarter conference call that the MSO intends to spend, on average, about $215 per set-top.
Cablevision's addition of S-A won't necessarily close the door on Motorola Broadband. Motorola forged a conditional access deal with NDS back in June.
Thanks to that combo, "you could end up seeing some of [Motorola's] stuff here, too," Hildenbrand said.
Whoever's stuff ends up on Cablevi-sion's digital systems, expect the MSO to make a major digital push through the end of this year and into 2003. Cablevision expects to have 3.4 million digital video-capable homes by the end of this year, and about 4.4 million by year-end 2003.
Cablevision's modified financial commitment to Sony probably won't spell the end of its technical affiliation with the consumer electronics giant. "We just did away with a business deal. We didn't do away with a relationship," Hilden-brand said.
Sony, for its part, plans to continue on with a cable set-top strategy with Cable-vision and other U.S. MSOs, said Michael Fidler, senior vice president, Sony Electronics.
He added that Sony hopes to use OpenCable as a springboard into the domestic cable set-top sector. Sony also has looked into obtaining CA licenses for legacy S-A and Motorola digital cable platforms.
"We've had discussions, and we're exploring all of our options," Fidler said, noting that he believes Sony's experience with home networking, high-definition television and digital video recording technology will strengthen its North American cable strategy.