There may be a $1 billion price tag affixed to an expanded set-top agreement between Comcast Cable and Motorola Inc., but the more significant piece of the deal gives Comcast unprecedented access to Motorola's precious conditional access (CA) technology.
The set-top and network infrastructure agreement solidifies Motorola's position as Comcast's primary set-top supplier, but more, far-reaching implications are found in two CA joint ventures.
In the first venture, the companies will collaborate on a "next-generation" conditional access system based on Motorola's MediaCipher platform. The second, to be managed by Comcast, will enable the MSO to license MediaCipher to other U.S. cable operators and third-parties that could include other set-top makers, television suppliers and various consumer electronics companies.
Comcast and Motorola did not say much about what that next-generation CA might look like, but it's widely known that Comcast, as well as other operators, are interested in decoupling the CA from the cable infrastructure and employing downloadable, software-based conditional access systems.
Developing a software-based CA "is certainly a piece of [the agreement]," said Dan Moloney, president of Motorola's Connected Home Solutions Division. "What we have done...is enabled the core MediaCipher [technology] to be at the foundation of the downloadable security we develop with Comcast."
On the telco side of the house, Motorola is already developing a software-based CA platform for IPTV set-tops via a partnership with Widevine Technologies.
Historically, Motorola had been stingy with licenses for MediaCipher, which any digital set-top must support in order to operate on a cable system based on the Motorola CA. But Motorola has lightened its position somewhat in recent months as the list of MediaCipher licensees has grown to include Advanced Digital Broadcast Inc., Pace Micro Technology, and Pioneer Electronics, among others.
A joint venture, however, will likely expedite additional MediaCipher license agreements, and give Comcast the power to determine who gets to license the technology.
Moloney pointed out, however, that Motorola will maintain all rights to MediaCipher. "It didn't take us out of the business, but gave us a foothold for next-generation conditional access [technology] in the U.S," he explained.
The licensing J.V. will also enable other set-top makers to compete in the set-top market. Not that Motorola is very worried about that.
"We are very prepared to compete in an open environment," Moloney said, pointing out that Motorola has been able to build and maintain market share in the DOCSIS cable modem sector.
Mark Hess, Comcast's SVP of digital television, said systems based on PowerKEY (Scientific-Atlanta's CA) will remain intact. "We'll see how we evolve the S-A relationship; we'd like to get them involved," Hess said. Presently, 90 percent of Comcast's footprint is based on MediaCipher, the balance on PowerKEY.
The agreement with Motorola also marks the latest move by Comcast that gives the MSO a better hand in controlling its technological development. Among the more recent developments, Comcast has formed the GuideWorks venture with Gemstar-TV Guide International, has teamed with Cox Communications on a pending purchase of iTV software specialist Liberate Technologies, and has partnered with Time Warner Cable on an OCAP licensing entity called OCAP Development LLC.