Ops boost basic digital boxes - Broadcasting & Cable

Ops boost basic digital boxes

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Anaheim, Calif. -- Cable operators defended their retreat away from advanced
set-top converters, saying they can deliver plenty of new services with the more
limited series that have been available for three years.

MSOs are generally shelving plans to roll out 'smarter' set-tops, such as the
Motorola Broadband Communications Sector 'DCT-5000,' which were to carry greater
memory and processing power.

Instead, they're sticking with the original generation of digital converters,
which allow functions like video-on-demand and electronic program guides, but
contain little Internet or electronic-commerce capability.

'I feel like I'm getting pushed to put more technology into the home,' Cox
Communications Inc. chief operating officer Pat Esser said at the Western Show's
general session here Thursday. 'I think sometimes we get ahead of ourselves and
think that we have to put a new box out there.'

Adelphia Communications Corp. chief financial officer Tim Rigas said MSOs'
caution has proven prudent through the years.

'The industry has done an extremely good job at not spending money on bad
technology,' he added.

Charter Communications Inc. and Cablevision Systems Corp. have decided to go
with advanced set-tops, but AT&T Broadband, Insight Communications Co. Inc.,
Cox, Comcast Corp. and others will not.

Lee Masters, departing chairman of Liberty Digital, said the move was
'personally disappointing' because it is leading to the disappearance of his
company.

Masters had built a portfolio of investments around the premise that the
cable set-top would become a high-powered interactive gateway.

Parent Liberty Media Corp. is buying out the company's public shareholders
and capturing what investments remain viable -- most notably a 50 percent
interest in Game Show Network, a very conventional cable channel.

Cable operators have been promising interactivity for more than 15 years.

When Liberty formed Liberty Digital three years ago, Masters said, his colleagues thought, 'We are so smart, we have picked the right time.' It wasn't.
- John M. Higgins

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