Comcast Gets Assertive Over Set-Tops

Led by deals with Motorola Inc. and Pace Micro Technologies plc, Comcast Corp. is taking a much greater role in set-top design and development as it uses its status as the No. 1 MSO to speed up development work with vendors.

“We have a family of set-top boxes where we influence the design and feature set much more heavily than in the past,” said Comcast senior vice president of digital television Mark Hess. “We're now working with chip and set-top companies to lay out functional requirements, technology, software, et cetera.”

In March, Comcast signed a wide-ranging deal with Motorola, valued at $1 billion, that covered both set-top co-development efforts and co-licensing agreements for MediaCipher. The latter gives Comcast greater control over the licensing and costs associated with MediaCipher conditional-access technology.


In May, Comcast signed a three-year pact with Pace valued at $375 million to $550 million. The agreement superseded an earlier deal between the companies and covers the purchase of set-tops, including Pace's Tahoe HD digital video recorder. Comcast also gained the right to sublicense Pace's EngineWare software and specified designs for the North American cable market.

“We're creating a family of products,” Pace Americas president Michael Pulli said. “We will put the EngineWare software across all our products.”

Although there is no “new” deal between Comcast and S-A, its other set-top supplier, the vendor reports increased activity with Comcast on a number of fronts.

The company will double, if not triple, its Comcast business once the Adelphia Communications Corp. transaction with Time Warner Cable is complete.

“We're working more closely [with Comcast] than we ever had,” said S-A engineering director Burchall Cooper.

S-A has six different working groups devoted to Comcast, he said, covering set-top design, downloadable conditional access, next-generation video on demand and Data Over Cable Service Interface Specification signaling gateway development.

Hess said Comcast is working on reference designs for three levels of set-tops for all its set-top vendors.

The development includes work on an entry level device that does VOD, the Open Cable Applications Platform and has a DOCSIS digital set-top gateway modem, Hess said. The second set-top would do all the above functions, plus add HD and digital video recorder capabilities.

The third box is a media-center device. While somewhat less defined, Hess said, “we need the lowest cost, highest functionality DVR box,” he said.

On the low end, Hess said, “We have a low-cost DCT 700 that's an OK bridge for now. But eventually we would like more processing and memory and have DOCSIS.”


The good news, Hess said, is that current chips on the market can handle most of what Comcast wants to achieve. It can typically take upwards of 12 to 18 months to design a chip from scratch, an eternity in the media business.

Although Motorola and Pace have grabbed the headlines, Hess said Comcast will grow its S-A footprint with the Adelphia deal. “They are pretty good at building DVR boxes,” he said. “We're making sure everyone understands we want to have openness in the market.”

Cooper said S-A is involved with multiple initiatives with Comcast, including the residential set-tops specifications laid out by Hess.

Downloadable conditional access is another S-A working group, Cooper said. S-A had been working on downloadable security even before the cable industry got an extension on two-way CableCard deployment from the Federal Communications Commission in February. The delay was designed to allow cable and its vendors to pursue downloadable security schemes.

“We're probably the lead vendor with Comcast defining that architecture,” Cooper said.

“Another initiative is advanced DSG deployment,” Cooper said. S-A has had its DSG interoperability verified at Comcast labs and plans to do a trial with the MSO using advanced DSG on a DVR, he said.


Cooper said S-A's own set-top development work lines up fairly closely with what Comcast is trying to achieve. The company is working on next generation DVRs that would include advance codecs, such as H. 264 and VC-1, plus DOCSIS 2.0 and downloadable conditional access.

Pace also has been pulled closer to the Comcast orbit. “We're creating a family of products,” covering both standard definition and HDTV versions of set-tops, said Pace president Mike Pulli.

The Comcast deal is a three-year extension of a Pace deal signed years earlier, and covers the company's Tahoe HD DVR.

The deal also covers Pace's licensing software, EngineWare. “We writing software that works across boxes and different vendor implementations for VOD, etc.,” Pulli said. “It will ease porting of applications.”

In the past, Pulli said, the biggest fear an MSO had was that it had to take whatever set-top a vendor provided. To Pulli, innovation was left in the hands of Motorola and S-A.

He points to direct-broadcast satellite provider EchoStar Communications Corp., which does its own set-top development and has been able to get to market quicker with newer products.

“They control what they put in the field,” he said. Comcast is getting closer to that model with the work it has undertaken, Pulli added.


Comcast also is reaching out to the traditional TV manufacturer crowd for set-top development or inclusion of traditional set-top capabilities in future two-way TV sets. Several companies, including Panasonic Corp. of North America, LG Electronics and Samsung Electronics have signed a two-way cable host licensing agreement with Cable Television Laboratories Inc.

Hess sees those companies developing TVs that might include a DVR or even a DVD burner, to start. Over time, integration efforts could include other devices those companies make, such as cameras and camcorders.

The new deals haven't had much effect on other MSOs, executives say. “I don't think what Comcast has done impacts Cox any differently than how [Tele-Communications Inc.] used to do in the old days,” said Dallas Clement, senior vice president of strategy and development at Cox Communications Inc.

Set-top design has evolved where it's a more open structure and more development environment, he said. “The choices we make today aren't party of a closed ecosystem.”

Cox also is large enough to hold some sway with set-top vendors. “We tend to be an objective third party that hopefully brings new thinking and independent thinking” to set-top design and applications, Clement said.