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Pace-Made Layer3 TV Box Spotted

Layer3 TV, the Denver-based “next generation cable operator,” has not yet outlined its go-to-market strategy, but it’s becoming clear – in bright pink and orange, no less – that the resulting service will operate in part on an IP-based device made by Pace plc.

The Donohue Report spotted the device as it passed through the FCC. Though short in technical detail, the device located is model number CI2516, and has a colorful, humorous sticker on its underside that reads:  “WOOO OOAHH!! Who Turned Everything Upside Down?”  The Pace-made device also sports a DOCSIS MAC ID sticker, meaning it's for HFC networks. U.K.-based Pace is in the process of being acquired by Arris for $2.1 billion.

Layer3 TV is expected to support a variety of IP-connected devices, but it has dropped hints that it will also offer its own consumer gear, including a set-top that would be capable of supporting 4K/Ultra HD. As for other hints, a job posting from March 2014 proclaimed: "Knowing what RDK is counts as extra credit!," an indication that the company was at least considering a platform that uses the Reference Design Kit, the preintegrated software stack being managed by Comcast, Time  Warner Cable and Liberty Global. 

Layer3 TV, which recently changed its logo, has been asked for comment on the device.

Update: "We don't comment on equipment filings with the FCC," said Layer3 TV's head of marketing Eric Kuhn. "However, we have promised to be a next generation cable operator, so maybe pink and orange is the new black?"

The finding at the FCC marks the first evidence of a consumer device from Layer3 TV, which is expected to launch its IP-based service this year. The Denver-based outfit has not announced its specific plans and product strategy and roadmap, including whether it will offer a direct-to-consumer service or work in partnership with existing MVPDs.

However, a recent FCC filing by the company seems to add fuel to the notion that Layer3 TV will operate as a virtual MVPD of sorts. It told the FCC in July (subscription required) that it’s possible to build a platform that looks and acts like a traditional multichannel video programming distributor from a Commission-requirements standpoint, but can still be innovative and compete head on with legacy pay TV service providers.

A person familiar with the company’s plan told Multichannel News that would be inaccurate to label Layer3 TV an OTT service because it’s aiming to become a “new class” of distributor.

Layer3 TV did describe itself as having a “facilities-based architecture” to the FCC, which is looking to define online video providers (OVDs) that deliver a linear programming stream as MVPDs. If defined as such, an OVD would have access to content through the FCC’s program-access rules, but likewise would have to negotiate for retransmission consent with broadcasters.

The July 22 ex parte filing — which describes a meeting between several staff members of FCC chairman Tom Wheeler and Layer3 TV executives, including co-founders Jeffrey Binder (CEO) and David Fellows (chief technology officer) as well as Kuhn  — appears to confirm that Layer3 TV is approaching its business as a bona fide MVPD with the rights and privileges that such status would confer.

Layer3 TV likewise proposed to the FCC that a “technology-neutral” approach would paradoxically inhibit competition and degrade the quality of content that consumers demand, were the FCC to jettison certain obligations aimed at protecting the consumer interest, including requirements such as Emergency Alert System compliance, closed captioning, limits on commercial audio volume and the provision of public, educational and governmental (PEG) access channels.

“Compliance with those legacy rights and obligations that remain applicable, regardless of the delivery technology, is neither impossible nor anti-competitive,” Layer3 TV argued. “Nor is such a requirement unduly burdensome for new entrants, as Layer 3 TV said it would soon demonstrate.”

Layer3 TV hasn’t announced a launch date, but it is gearing up amid the recent debut of OTT-delivered pay TV services such as Sling TV, Dish Network’s slimmed-down service for cord-cutters, and PlayStation Vue, a more-robust multichannel offering Sony is currently selling in seven markets: Dallas, Miami, Chicago, Philadelphia, Los Angeles, New York and San Francisco.

Of recent note, Layer3 TV added programming vets Lynne Costantini (now president of business development at TheBlaze and a former exec of Scripps Networks and Time Warner Cable) and Sean Riley (an exec with multiscreen video tech firm 1 Mainstream who is also late of Fox Networks) to its content advisory board, which is now led by its chief content officer Lindsay Gardner, a programming vet who was formerly with Fox and Cox Communications.

In June, Layer3 TV  raised a $51 million “B” round that extended its total to $80 million.

Layer3 TV, founded in 2013,  opened its Denver headquarters in September 2014