Market Insight

Cox and TWC fined for using SDV

October 27, 2008

Daniel Simmons Daniel Simmons Executive Director, Enterprise & Residential Communications Technology, IHS Markit

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Cox, Time Warner Cable (TWC) and TWC division Oceanic have been ordered to refund affected customers and fined $20,000 dollars each for preventing subscribers using customer-owned Cablecard host devices (CHDs) such as integrated digital TVs from viewing channels delivered via Switched Digital Video. Cablecards and CHDs were first introduced in 2004 by the FCC in order to allow cable TV subscribers to own their own digital cable viewing devices instead of having to rent set-top boxes (STBs) from cable provider at significant additional expense and improving consumer choice by breaking Scientific Atlanta ( now owed by Cisco) and Motorola's duopoly over STB supply. Since July 1 2007 Cable operators in the US have been banned from deploying STBs with integrated conditional access components.


SDV is a technique that allows cable operators to save bandwidth across their networks by unicasting digital channels one channel at a time to subscribers instead of broadcasting all the channels at once. The move to SDV has not affected the vast majority of subscribers which view digital channels via STBs rented from their cable provider. However, SDV relies on the viewing device being capable of two-way communication with the cable network in order to request a channel change. The current installed base of customer-owned CHDs (just 0.7 percent of the US installed base of 65.3m digital cable receivers) is incapable of two-way communication because they are incompatible with the tightly licensed proprietary middleware deployed by the cable operators. This renders them unable to receive content delivered via SDV which often includes premium HD channels.

Cable operators have pledged support for the Tru2way open middleware standard which any CHD manufacture may integrate into its product allowing them to receive SDV channels and other interactive services. Any long term potential for SDV to undermine the goals of the FCC's integration ban is unlikely with Tru2way services and compatible integrated digital TVs already launched in Chicago by Comcast and Panasonic.


Cox Communications TWC
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