Although digital television is off to an admittedly slow start, a number of new initiatives are pushing set-top manufacturers and component developers to develop new approaches that will ultimately result in lower-cost units, paving the way for mass deployment. More specifically, as recently as last month there were at least four different requests for proposals (RFP) on the street, and at least one integrated chip manufacturer announced a new, three-chip silicon solution specifically designed for digital set-tops.
The upshot is that soon, a new pecking order for set-tops could turn the whole industry upside down and relegate a 1-million unit order toward the bottom of the priority list.
Indeed, when one considers that millions of cable TV subscribers were supposed to be viewing satellite-delivered digitally compressed programming by now, it's perhaps ironic to realize that instead, millions of viewers are watching digitally encoded commercials that are inserted by the local cable system.
As a result of numerous frustrating delays associated with the development of the digital transport network-and more specifically, the digital set-top box-the cable industry will not be the first to deploy digital compression, as was promised several years ago. With the exception of Time Warner in Orlando, the cable industry has yet to deploy digital set-tops in any meaningful numbers.
Meanwhile, competitors have struck. DirecTv, the direct broadcast satellite service, has already sold more than 1 million units and is stealing as much as 2 to 3 percent of cable TV's marketshare in some places. And now, the likes of Tele-TV, US West Communications and americast are all girding to order millions of set-tops, which could displace MSOs like TCI and Time Warner out of the top spot.
Likewise, DBS newcomer AlphaStar last month opened its digital earth station in Oxford, Conn. and is completing its system integration process. AlphaStar took over a satellite tracking and telemetry site formerly owned by GE Spacenet and spent another $40 million upgrading the facility. AlphaStar is scheduled to begin beaming MPEG-2 video that is Digital Video Broadcast encryption compliant by the end of March 1996.
AlphaStar has been testing its digital reception equipment for several months via Skynet's 402R satellite located at 89 degrees west longitude.Big changes coming
Cable operators have had to watch these announcements and, through gnashed teeth, admit that they have missed being on the cutting edge when it comes to digital deployment. Although the industry has already spent millions to deploy digital ad insertion equipment (see story on p.48 of this month's CED Magazine), it's only flirting with the digital future it will eventually learn and come to love.
But all of that is about to change.
As of last month, at least three different network operators had formal requests for proposals on the streets seeking fully-featured set-tops for "significantly less" than $400, and one integrated chip manufacturer was hailing the arrival of the $300 digital set-top as a result of chip integration.
In addition, General Instrument is finally prepared to ramp up production of its DigiCipher system, having successfully demonstrated the system during the Western Cable Show in Anaheim, Calif. last December. During that demo, video was uplinked from TCI's National Digital Television Center, received by Multivision in Anaheim and sent to a working digital set-top located in the General Instrument booth on the convention floor.
The company intends to ship a quantity of test units to TCI and other MSOs beginning in this quarter, according to Dave Robinson, vice president and general manager of digital network systems at GI. After that, production units will begin to roll off the assembly line in the second half of the year, he says.
At least 10 different cable operators years ago signed letters of intent to purchase the set-tops, and most remain poised to do so. One that isn't, however, is Time Warner Cable, which last month sent out a 123-page request for proposals for a real-time, two-way set-top box it is calling "Pegasus." The hybrid box will be able to receive both analog and digital signals and will feature an interactive program guide, a real-time return channel and rich two-dimensional graphics.
Time Warner intends to purchase between 500,000 and 1 million of these Pegasus units, beginning in the first quarter of 1997, according to Mike Hayashi, vice president of advanced engineering at Time Warner Cable.
Time Warner needs the new set-top to position itself as the primary provider of both digital and analog entertainment, communications and information services in its service areas, according to Jim Chiddix, senior vice president of engineering and technology at the MSO. This set-top, along with the ongoing plant upgrades to hybrid fiber/coax architecture, represents the "first phase" of Time Warner's interactive digital systems deployment strategy.
Specifically, Time Warner is requesting a set-top that is heavily based on accepted standards, such as MPEG-2 transport. Further, it must have a central processor that performs at least 25 million instructions per second (MIPS), has a minimum tuning range of 750 MHz ("although we'd like to see it hit 860 MHz," says Hayashi), is graphically rich (a minimum of 8-bit color with a wide range of special effects capabilities built into the hardware) and has an upper limit of 4 megabytes of "unified" memory. Oh, and Time Warner wants all that for "substantially less than $400."
With this set-top, Time Warner hopes to capitalize on the trend toward "shared" memory, as opposed to dedicating a fixed amount of expensive DRAM to specific functions. In this scenario, the DRAM that is used for MPEG-2 decompression would also be used for applications and graphics if MPEG-2 decompression is not used or is used in lower resolutions, according to the RFP document.
But "probably the most important aspect of this box is the real-time two-way return," says Hayashi. Pegasus is expected to support several "forward application transport (FAT)" channels that run at 64- or 256-QAM, which transport 27- or 36-Mbps, respectively. In addition, a forward QPSK data channel is called for, as is a shared reverse QPSK channel that supports a minimum of 1.544 Mbps.
Responses to Time Warner's RFP are due by April 25.
While the RFP doesn't ask for a specific encryption and access control method, Time Warner wants to "take advantage of standards," says Hayashi. The MPEG standard allows for multiple types of conditional access. "This is a timing sensitive issue," notes Hayashi.
Time Warner actually hopes to leverage the transport technology it specified in the Pegasus set-top with high-speed data modems it hopes to deploy. "The transport system we have specified . . . has much in common with the kinds of transport that we believe will be viable for high-speed cable modem services," wrote Chiddix in the RFP's cover letter to vendors. "We believe there is an opportunity to capitalize on the investment in Pegasus by using the same device for the delivery of high-speed data services to a PC or a game device."
To ready itself for the coming digital future, Time Warner has been upgrading its cable networks feverishly to modern HFC design. The company's stated goal was to have its major urban clusters upgraded by the end of 1998. Since that statement was made, however, the company has acquired more subscribers - which could push that timetable out a bit, according to Chiddix. "We've been upgrading at the rate of 10,000 to 20,000 miles per year," he notes. "Last year we were Siecor's largest customer (for fiber optic cable) and I believe we might have been the largest fiber customer in the world."Telco efforts are strong and deep
Meanwhile, the telco consortium known as Tele-TV also issued an RFP for its "Unity" digital set-top to 21 different manufacturers last month, to which responses were due March 21. This set-top, for which Tele-TV wants to pay about $300 each, is expected to integrate MPEG-2 digital video and audio with a PowerPC-like central processor and will support a RISC architecture to manage the user interface and execute server-based interactive applications like video-on-demand and other information and transaction services.
In addition, the box must have a minimum of 4 megabytes of RAM (over and above the 2 MB needed for full MPEG decompression) for applications, according to Craig Tanner, vice president of advanced technologies for Tele-TV Systems.
Tele-TV is a partnership between Bell Atlantic, Nynex and Pacific Telesis designed to spearhead entry into the video entertainment market.
Other features of the Unity set-top include a hardware accelerated graphics subsystem that will support three-dimensional graphics and the new IEEE-1394 digital interface for interconnection with personal computers and future digital consumer electronics, including camcorders and VCRs, says Tanner.
The Unity box will consist of a core processor that is attached to a "network interface module" which will allow the platform to be attached to any network architecture, including HFC, asymmetric digital subscriber line (ADSL), switched digital video or direct broadcast satellite. Tele-TV got to this point about a year ago, having actually pared the list of potential manufacturers down to eight finalists, when the company switched its focus to developing a digital set-top for MMDS applications.
In fact, at the end of February, Tele-TV and Thomson Consumer Electronics formally signed a $1 billion contract where Thomson will supply up to 3 million set-tops beginning in the fall of 1996 and continuing through 1999. A number of Tele-TV's parent companies have made significant investments in MMDS companies in an attempt to quickly enter the video marketplace. With the advent of digital compression, MMDS systems that have been limited to 33 channels can now offer many times that number.
Specifically, Bell Atlantic and Nynex have invested in CAI Wireless based in Albany, N.Y., and Pacific Telesis acquired Cross Country Wireless, Wireless Holdings and Videotron Bay Area, which holds MMDS licenses across California.
As for the wired Unity set-top, Tele-TV has already held a one-day manufacturer's conference where a series of business and technical questions were addressed, says Tanner. "Nothing earthshaking was discussed, it was all pretty much arcane technical issues," he says.
In addition to those two, high-profile RFPs, US West Communications and americast, the consortium of Ameritech, GTE, The Disney Company, SBC Communications and BellSouth, had requests floating recently as well.
While Jody Miller, senior vice president of operations at americast, confirmed that the RFP was issued, she declined to provide any technical or market details, noting that the whole process was subject to non-disclosure agreements by all the participants. She did, in fact, express surprise that the trade press had learned of the RFP's existence, but said americast hopes to complete the RFP process and make a selection early in the second quarter of 1996.
US West, meanwhile, had issued an RFP and closed it without making a vendor selection, according to a company spokesman. Details of that RFP were also unavailable, but it reportedly was similar to the one issued by Tele-TV and detailed above. No information about the number of units involved or when purchase might actually occur was available.Is the $300 box really here?
Are these network operators asking too much when they specify a $300 digital set-top? After all, Time Warner deployed a highly interactive box in Orlando that cost nearly 20 times that amount. And set-top manufacturers with long histories of engineering out costly items say it will be a while before digital boxes reach that price level.
But, clearly, steps are being made in that direction. LSI Logic turned a few heads last month when it announced a three-chip solution that could make the $300 set-top a reality.
Because it has reduced the number of chips needed to perform the digital compression and control functions from 10 or so chips to three and will make that chipset available for less than $75, LSI Logic argues that the set-top should cost no more than $300 because the remaining bill of materials-power supply, digital logic, 2.5 megabytes of memory and circuit boards-costs no more than an additional $75 to $100. (See figure 1)
The company claims this "Integra 1000" solution can be used for cable, satellite and telco set-tops, regardless of what region of the world they are deployed in. Further, the chips are based on open standards, such as MIPS and MPEG-2, says Kishore Maghnani, director of marketing for LSI Logic.
The chipset makes use of "intelligent partitioning" between hardware and software and uses the shared DRAM concept to increase performance at costs that are lower than today's solutions, claims Maghnani. Also, the chipset will be driven by a lightning-fast microprocessor that performs 45 million instructions per second (MIPS), as opposed to today's set-tops that use micros that operate at about 5 to 10 MIPS.
Such a processor gives a set-top enough power to support a wide range of applications, and for content developers, the box "is a dream come true," says Maghnani, because applications that run over the processor can be written in C language instead of some complicated and cumbersome assembly language.
While cable operators generally cheered the LSI Logic announcement, set-top manufacturers openly chastised the company, taking it to task for attempting to set the price for a finished product.
GI's Robinson is one who is openly critical of LSI's aberrant behavior. "If it's so easy to build a $300 digital set-top, why don't they build it themselves?" he asks rhetorically. "The experts at building the boxes are not the chip suppliers."
Furthermore, Robinson says LSI's new chipset is far from being a breakthrough. "It's important work. It's essential work," he notes. "But is it a breakthrough? No. There are probably six to 10 companies all over the world working on the very same thing. It's the same approach we're taking in our own development."
David Levitan, vice president of strategic planning at Scientific-Atlanta, echoes Robinson's thoughts. "Three chips don't make a total system solution," he notes.
Others have said the same thing in the past, making note that many electronics companies that have significant success in digital consumer electronics or personal computers often become stumped when they have to integrate analog RF technology. "It's never as easy as these (manufacturers) would have you believe," says one executive who declines to be identified.
Nevertheless, Hayashi of Time Warner is pleased to hear of the development. "I'm delighted to hear they (LSI) are working on this," he says. "What we tried to put in our RFP is hopefully a good reflection of the direction the industry is taking. It's very encouraging.
"It shows the power of having good standards," continues Hayashi. "We can take advantage of all the other MPEG efforts." That would come as a pleasant surprise to some cable MSOs who fear that the combined buying power of groups like Tele-TV and americast will push them down in the pecking order. Watching how this plays out will be interesting.