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By Jeffrey Krauss,
Trinket Tabulator
and President of Telecommunications and Technology Policy
The one hot new idea at the 2002 Western Cable Show came from Sony: "Let's go after the crown jewels!" The crown jewels of a cable system are the conditional access (CA) system and the out-of-band (OOB) channel. And the crown jewelers are Motorola and Scientific-Atlanta. The messages carried on the OOB are proprietary, not standardized, and the conditional access entitlement messages are very, very proprietary. The headend equipment, supplied by either Motorola or Scientific-Atlanta, controls the technical details of the OOB channel and the CA messages. And up until now, Motorola and S-A have used that control to maintain marketplace control over set-top boxes, in spite of FCC regulations promoting retail sales of set-top boxes.

Sony has figured out that the only way to establish a competitive retail market for set-top boxes is to break down control over the CA system and the OOB channel. So the company has developed a system concept it calls "Passage" (www.sony.com/passage) to bypass the Motorola and S-A control.

Suppose you are a cable MSO with Motorola or S-A equipment installed, but you would like to add Sony set-top boxes to your inventory, and you would like to migrate away from the Motorola/S-A CA system. Until now, you would have to totally duplicate every encrypted video channel, carrying one stream using the Motorola/S-A system and a duplicate stream using the Sony system. You would need 100 percent duplication of the encrypted programming. (To be more accurate, Sony doesn't make a conditional access system, but its partners Nagra, Irdeto and NDS do.)

The Sony theory is elegant. For digital premium channels carried as compressed MPEG packets, today, all the MPEG packets are encrypted. But Sony believes that encrypting all the packets is overkill. Only the most critical packets need to be encrypted to provide adequate security, because these critical packets contain the instructions for when and how to reconstruct the video from the rest of the packets. The critical packets are only 2 percent to 10 percent of all the MPEG packets, and in order to carry a duplicate stream, only these critical packets need to be duplicated and then encrypted.

So for each encrypted TV channel, you need a Sony box at the headend (called a "critical packet selector") that splits out the critical packets, duplicates them, sends one to the Motorola/S-A encryptor and one to the Sony encryptor, and sends the other 90 percent of packets without encryption. And instead of using the proprietary OOB channel to carry CA entitlement messages, the Sony system includes a DOCSIS modem in every set-top box and uses that to carry entitlement messages.

This is an attack on the Motorola and Scientific-Atlanta crown jewels. Every MSO has a significant investment in headend equipment and set-top boxes from either Motorola or S-A, and the proprietary nature of the crown jewels of a cable system gives Motorola and S-A a hammerlock. The Sony system provides a way to break the hammerlock without throwing away all the existing investment.

Of course, implementing this new system doesn't come for free, and does require some duplication of equipment. First, every encrypted channel needs a "critical packet selector" box. Those would be made by Sony partners that make headend equipment, like BigBand, Cisco, Harmonic and Terayon. Next, every encrypted channel, in addition to the encryption box made by Motorola or S-A, would need one from Nagra, Irdeto or NDS. And finally, carrying the critical packets encrypted two ways will eat up channel capacity, anywhere from 2 percent to 10 percent.

In addition, there may be a security risk. While it seems plausible that with MPEG compression, some packets are critical for reconstructing the video and some are not, maybe that assumption needs a little more investigation. Maybe both the Motorola/S-A and Sony encrypted stream would become more susceptible to piracy when only 10 percent of the packets are encrypted, instead of 100 percent.

Of course, these are merely the issues that occurred to me. Undoubtedly Motorola and S-A will come up with a dozen more reasons for MSOs to avoid the costs and risks of the Sony system.

And make no mistake, this is not a quick fix for the absence of a retail market for set-top boxes. First, it does nothing for analog scrambling. Most cable systems today are adding digital channels, but they are not eliminating analog scrambled premium services. It may happen in a few years that all premium services migrate to digital, but each MSO will make its own decision on that, and decisions will be made on a system-by-system basis. Second, retailers insist on a cut of the monthly service fees, but MSOs have balked. That's how retailers make their money when they sell cellular phones. And anyway, because of FCC rate regulation for set-top boxes, it is usually more attractive for subscribers to rent than buy a set-top box.

Will this be a successful attack on the entrenched positions of Motorola and S-A? Sony's main business interest is the set-top box market. But Sony has established a team that consists of the major headend equipment suppliers, the major conditional access system suppliers, and even a few other set-top box suppliers. It will be interesting to watch the marketplace dynamics over the next year or two.

Have a comment? Contact Jeff via e-mail at: jkrauss@cpcug.org

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