DCT-1000 dead in the water(LSI box)..................................
multichannel.com
VOLUME 18 NUMBER 47 NOVEMBER 24, 1997
Many Ops Still Wary About Digital
By CRAIG KUHL
Agreements between NextLevel Systems Inc. and 78 system operators last year did not turn into much beyond mild intent, according to several executives who participated in the process.
Last August, NextLevel (then General Instrument Corp.) boasted that 78 cable, telephone and wireless operators intended to buy a combined 480,000 set-tops.
But despite their enthusiasm for digital video at the time, many small to midsized cable operators now say that they'll move slowly and cautiously.
Some small operators said they'll postpone the purchase of NextLevel's set-top converters until a more clearly defined set of test results is available.
Others said the recent OpenCable initiative aiming to "fast-track" interoperability among advanced digital set-top terminals gives them reason to wait for the next generation of digital set-top converters, to avoid any potential "orphaning" of current technology.
OpenCable, which is aimed at consensus on interoperable digital set-tops, may also calm the nerves of operators nationwide that have been reluctant to commit to a single brand of digital set-tops, like NextLevel's DCT-1000.
From the list of 78 small to midsized operators that initially suggested that they would purchase digital terminals from NextLevel, a "modest" quantity has actually been shipped, said Dave Robinson, vice president and general manager of NextLevel's Digital Network Systems business unit.
"A relatively small number of smaller operators have installed the technology -- some through [Tele-Communications Inc.'s Headend in the Sky service], and some directly with us," Robinson said.
Raystay Co., a small cable operator in Carlisle, Pa., is one example of a small operator that views digital video as an important element in its service mix. "We've ordered 150 DCT-1000s, but we haven't turned them on yet," said Rich Forsyth, director of engineering for Raystay, who added that field tests and installation dates are still under discussion. "Hopefully, by year-end, we'll have them installed and operating -- we're really excited about compressed digital."
Harmon Cable Communications in Englewood, Colo., will begin testing next year, said Bill Rogers, its vice president of engineering.
"We're committed to digital in our smaller, rural systems," Rogers said.
At the end of the third quarter, NextLevel shipped 500,000 DCT-1000/1200 and DWT-1000 terminals to 20 cable and wireless operators, representing 322 headends, or 15 percent of its announced committed customers. NextLevel said it has commitments for more than 3.5 million of its digital units, with 2 million currently under contract. DWT-1000 is NextLevel's digital equipment for wireless cable operators, and it represents less than 5 percent of the total units, according to Robinson.
TCI represents the vast majority of NextLevel's digital set-top shipping list, Robinson said, adding that NextLevel is encouraging small to midsized operators to commit to digital when they feel that the time is right.
"The people committed to digital deployment are moving ahead, but it is significant for smaller operators to wait until they're comfortable. It's like waiting to buy a computer until the price goes down," Robinson said.
And for smaller operators, price remains a key issue. Today, a DCT-1000 costs about $400, and it will drop to $350 in March, Robinson said.
Some larger MSOs, such as Adelphia Communications Corp., are moving ahead with plans to launch digital service using NextLevel's DCT-1000, albeit in small portions, and they are receiving the equipment "as needed," said Dan Liberatore, vice president of engineering for Adelphia.
"We have ordered 10,000 thus far, with 5,000 on the way. But the total number that we order will depend on our penetration and subscriber rate," Liberatore said. He added that Adelphia will conduct a "soft marketing campaign" as the holiday season approaches.
"Our intent is to target people who are considering DBS [direct-broadcast satellite], whom we feel represent about 2 percent of our total customer base," he said. Liberatore echoed the thoughts of several other operators that are concerned about short-lived digital technologies and next-generation digital set-top boxes.
"We are being deliberately cautious on how we proceed with next-generation boxes," he said, describing a careful watch of Scientific-Atlanta Inc.'s Explorer line and NextLevel's DCT-5000 set-top. "We're also watching OpenCable very carefully, so that we don't get caught with antiquated equipment," Liberatore said. Many smaller operators will simply wait.
"We're waiting for the dust to clear, when the level of compression settles down and the technology, software and administration bugs have been worked out. When we put the service into the hands of our customers, we want it all to work well," said Pete Smith, vice president of engineering for Rifkin & Associates Inc.
Three years ago, Rifkin placed tentative orders with NextLevel for digital gear, but Smith said no orders have been confirmed yet.
"We want to buy from all vendors -- that's why we're keeping an eye on OpenCable. If there's a defining scheme among all folks, that's good. We should all know what to expect and play by the same rules. We don't need proprietary systems," Smith said. Still others are simply not convinced.
"Digital is not in our immediate plans, and it won't be for a while, probably at least until next year," said Ted Gleason, president and CEO of Tristar Cable in Junction City, Kan.
Testing is also critical for operators intending to expand into digital services, and TCI is providing the lesson plan, said Smith.
"TCI is doing all of the activity out there [in digital set-top testing], and we're all interested in [what they learn], especially down to a certain system size, because once you go below about 5,000 subscribers, it might not be worth it," Smith said. |
