See PODs on Parade at Western Show

They're not very flashy, but some of the most
attention-getting features of the cable set-top boxes at next week's Western Show may
be credit-card-sized, flat metal modules.

With an impetus provided primarily by government mandate,
the show will feature one of the biggest public displays and demonstrations yet of
point-of-deployment security modules that are interoperable with a variety of set-tops and
integrated television sets.

The demos -- largely under the umbrella of the annual
CableNET technology showcase -- are intended to give show-goers a taste of the equipment
that is supposed to be the basis of a new retail market for set-tops. Maybe more
important, they also wave the flag for cable's efforts to comply with Federal
Communications Commission directives ordering that the gear be available at retail by

"If you can touch it, you feel better," said
Himanshu Parikh, director of business development for Scientific-Atlanta Inc.'s
subscriber-networks division. "If the FCC folks walk by, they'll feel better,
too, that the cable-industry folks have stepped up and are living up to their agreement.
We want to prove to the FCC that we're not in the way."

S-A is one of about one-dozen major vendors that will show
OpenCable-designed set-tops and PODs that are interoperable with a variety of host devices
and conditional-access systems at CableNET, which is sponsored by Cable Television
Laboratories Inc. and the California Cable Television Association.

First, vendors planned to participate in the latest
POD-interoperability test held by CableLabs today (Dec. 6) at a MediaOne Group Inc.
facility in Los Angeles before moving to set up in the Los Angeles Convention Center.

The FCC requires that starting in July, cable customers
should be able to buy in retail stores cable set-tops without the usual embedded security
functions preventing unauthorized viewing of premium content such as pay channels.

Those security functions are to be provided by cable
operators via the POD, a PCMCIA-standard (Personal Computer Memory Card International
Association) PC-card form-factor device that plugs into the set-top.

Under the auspices of the industry's OpenCable
interoperability project, vendors have been developing the platform enabling the creation
of usable, retail-ready host devices and PODs and ensuring their interoperability. This
way, they don't run the risk of alienating retail customers, who will expect any
compliant set-top they buy to work with their local cable company's service.

"Right now, we think the POD is really the road to
retail," said Paul Pishal, director of business development for Philips
Electronics' Philips Broadband Networks unit, which will be showing, among other
things, an OpenCable set-top and POD. "So for a retail manufacturer such as us,
it's very important for that [POD development] to occur."

Aside from a smattering of displays and internal demos, the
CableNET exhibition will be the most significant venue yet for operators to see the
equipment in action and get a sense of its capabilities.

Although the devices must be built to OpenCable
specifications, they will be shown in variations differing by manufacturer.

Parikh said S-A was working to get its "PowerKey"
POD ready in the final PCMCIA form factor in time for the show, where it will be
demonstrated for conditional-access, encryption and copy-protection functions with a
prototype set-top combining features of its "Explorer 2000" and "6000"

The guts of the card include S-A's PowerKey security
technology, which incorporates public-key/private-key implementations for authentication.
The POD also includes core multiplexers and demultiplexers using a custom
application-specific integrated circuit that S-A designed, as well as the standard PCMCIA
interface to the set-top or other host.

"Technologywise, it's not a stumbling
block," Parikh said of the POD's role in creating a retail set-top market.
"We're trying to figure out how to make the business model fly, though, so a
customer can go into the store in July and buy these host devices. We're getting
closer to defining this model. Then, it's just a matter of pulling the trigger and
doing it."

Actual demonstrations will try to show easy
interoperability. Mindport, working with SCM Microsystems Inc., incorporated its own
Irdeto Access conditional-access technology into a prototype POD showing interoperability,
as well as removable security.

For example, a demo might show three different video
streams: one secured by Irdeto, another unsecured stream and a third secured by NDS
Ltd.'s conditional access. Set-tops without PODs should be able to show the clear
video stream, but not the other two; the clear and Irdeto-secured streams when the
Mindport POD is plugged in; and the clear and NDS-secured streams with NDS' POD.

"We will show that you plug the POD in, you see video,
you pull it out and the video stops," Mindport engineering manager Viny Sathe said.
"Hopefully, we can show that on multiple set-top boxes."

NDS -- a major international provider of conditional-access
technology and applications -- is also among those demonstrating a POD based on its
"OpenVideoGuard" system. NDS' POD was developed jointly with SCM.

NDS, a subsidiary of News Corp., will also demonstrate its
OpenCable test tools, which CableLabs is using in its interoperability testing of PODs and
host devices.

Among other participants, Samsung Telecommunications
America Inc. will demonstrate an OpenCable-compliant, POD-ready set-top-box design that
supports both standard-definition and high-definition digital-TV signals.

That design, however, is intended to be the basis of a
television with integrated set-top functions, which Samsung believes will be a more
effective retail product than a stand-alone set-top, according to Jack Chaney, director of
Samsung Information Systems America's multimedia-technology center in San Jose,

The design can be adapted to an all-format TV receiver or
an SDTV-HDTV format set, he added.

"If you're going to buy something at retail, why
not get something that does the HDTV decoding and display that will eventually become
popular, even though cable hasn't concentrated on it yet?" Chaney said.

Cable operators and vendors are putting a lot of weight
behind the technology that will support the retail market. But some operators are still
unsure whether customers will be ready to go into consumer-electronics stories in large
numbers next year and plunk down $300 or more for digital-cable boxes.

"As far as OpenCable is concerned, to be blunt,
we've done what we legally have to do, and that is placed orders for PODs," Cox
Communications Inc. chief technology officer Alex Best said. "Quite frankly,
we'd be quite surprised if we see any host devices to put those PODs into in the
retail stores this year. Obviously, we have to support retail devices. There is some
question in a lot of people's minds as to whether the consumer will really go to
Circuit City [Stores Inc.] and pay."

But vendors agreed that while it was unclear what the
retail customer base will look like for a while, operators needed to be ready for both the
sales and leasing options.

"Once the POD's available, it will be just an
option, whether the consumer wants to buy an integrated set-top or buy a host and get a
POD from his cable operator," said Denton Kanouff, marketing vice president for
General Instrument Corp.'s digital-network-systems unit. "And each cable
operator will have a preference. From a platform point of view, we want to offer both
options to the cable operator and leave it up to him."

Kanouff noted that some operators have already begun retail
service trials without waiting for OpenCable host and POD implementation, working beyond
the technology aspect to scope out the most effective customer proposition and best
business proposition between the operator and retailer.

Other OpenCable set-top and POD-module participants at
CableNET include Microsoft Corp.; Panasonic Consumer Electronics, which will display an
integrated OpenCable TV set; Zenith Electronics Corp.; NagraVision; and SCM.