Cable MSOs Prepare for Launches of OCAP Set-Tops

At last count, a good half dozen of the nation’s largest MSOs -- Comcast, Time Warner Cable, Charter Communications, Cox Communications, Cablevision Systems and Advance/Newhouse Communications -- are laying the path for interoperable TV sets and set-tops. The six MSOs are upgrading their cable system headends so they can support digital TV boxes equipped with OpenCable Application Platform (OCAP) middleware from CableLabs, a key component in the retail drive.

If all goes according to schedule, the six MSOs will deploy the OCAP software in more than a dozen markets by year’s end. New York, Philadelphia, Boston, Indianapolis, Denver and other metro regions head the list of early markets.

“We're laying the tracks for it from a technology perspective,” said Wayne Davis, outgoing CTO of Charter, which is initially preparing two of its large cable systems for the OpenCable boxes. “It’s important for us to be in a position to support them (OCAP set-tops) when they show up”, he said.

Amid these planned rollouts, some consumer electronics officials and other cable critics claim the MSOs really are just making token offerings to appease federal regulators pushing for retail sale of competitive set-top boxes. The critics contend cable operators have been dragging their feet because they don’t want to disrupt their traditional business model of leasing set-tops to subscribers.

Even with these announced launches, it’s still unclear when two-way digital cable-ready TV sets will hit the retail market in large numbers. Officials at Panasonic, LG Electronics and Samsung Electronics, three of the large consumer electronics manufacturers committed to building OpenCable TV sets, have said they can’t guarantee that many two-way sets will be ready this fall.

“The system is very complicated and it has to be reliable,” Woo Paik, president and chief technical advisor at LG Electronics, said: “We need to do extensive field trials.”

Nevertheless, two leading cable technology executives insisted last week that their companies are committed to OCAP. Speaking at the Society of Cable Telecom Engineers’ (SCTE’s) Cable-Tec Expo conference in Denver, they claimed steady progress on rollouts despite engineering headaches.

David Fellows, exec. vp and CTO of Comcast, reiterated his company’s aim to roll out by year’s end OCAP-enabled sets and set-tops in four markets - Boston, Denver, northern New Jersey and its hometown Philadelphia region. He said the MSO is working with Panasonic on its launch. In January, Comcast contracted with Panasonic for at least 250,000 OCAP-enabled set-tops with high-definition (HD) and digital video recording (DVR) capabilities.

Marwan Fawaz, departing CTO of Adelphia Communications and incoming CTO of Charter, said his new company intends to upgrade two markets for OCAP sets and set-tops by Dec. 31. He was vague about the markets, but said Charter will stage one launch on a Motorola-supported cable system and the other on a Scientific-Atlanta-backed system. “One manufacturer is more ready than the other,” said Fawaz, declining to name the vendor that’s further along. “I lose sleep worrying about it,” he said.

With OCAP’s long-awaited debut imminent, a leading CE executive said he thinks cable operators should speed their launch plans to counter DirecTV and EchoStar, plus other new national video rivals like AT&T and Verizon Communications. “Without OCAP, the cable industry would be at a severe competitive disadvantage,” Paul Liao, CTO of Panasonic Corp. of N. America, said: “From a competitive perspective, I don’t see how you can’t do OCAP as quickly as possible.”

Liao and other CE executives want to see OCAP boxes deployed swiftly for their own competitive reasons. Besides Panasonic, two other large CE manufacturers -- LG Electronics and Samsung -- have enlisted to build the OpenCable two-way digital TV sets that would run OCAP middleware. “From Panasonic’s perspective, OCAP is an absolutely critical and essential step,” Liao said: “There’s only one thing that will make it better -- get it deployed.”

A growing point of contention between cable and CE is how to split OCAP box resources among different applications. The industries agree on the need for a “monitoring” application acting as a traffic cop, but not on who controls that monitor, Liao said.

Ironically, the cable industry is looking to make its set-tops more retail-friendly just as that the retail-oriented DBS industry is adopting cable’s traditional model of leasing gear to customers. For example, in March DirecTV made a major shift in hardware strategy, instituting a new leasing program that pays dealers commissions only for renting, not selling, satellite receivers to consumers. Previously, DirecTV subsidized the cost of its set-tops to retailers.