Comcast Spends Billion with Motorola

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In a push to draw more suppliers of cable set-tops, cable operator Comcast cut a deal with Motorola to unleash a critical element, the encryption system allowing operators to protect their signal.

The deal was the less-flashy part of a “broader strategic relationship” between Comcast and Motorola.

The big headline was Comcast’ commitment to buy more than $1 billion in new set-tops from the electronics company, which is the Comcast’s largest set-top supplier.
But the deal also gives Comcast a nonexclusive license to its MediaCipher conditional-access technology, the software that ensures subscribers can’t watch HBO or pay-per-view movies unless they’re paying for them.
A Comcast-controlled venture with Motorola is expected to relicense the technology for little or no cost to other electronics manufacturers.
Comcast’s Senior Vice President of  Digital Cable Mark Hess wouldn’t detail the fee plan but acknowledged that “part of the answer there is to make it easy to license.”
While Hess talks about his company’s “very positive relationship” with Motorola, Comcast and other operators have long groused that they’re beholden to what is largely a duopoly of Motorola and Scientific-Atlanta.

They believe that not only keeps their costs high, but impedes their ability to get new products to market. While DBS companies were rolling out digital video recorders aggressively, Comcast had to wait 18 months for Motorola to get a working model to market.
Because so many of its systems employ Motorola’s encryption system, Comcast had nowhere else to turn for product.

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