Verizon is looking for a next generation set-top box and conditional access system for its FiOS TV initiative. The communications company says it could be looking for over 26 million units, worth several billion dollars.
Verizon has issued a request for proposal for set-top boxes which indicates the scale of ambition for its fibre-optic interactive television platform. It also represents something of a threat to Motorola, its current supplier. It presents an opportunity to competitors such as Scientific Atlanta, now part of Cisco, as well as other specialist suppliers of set-top boxes and security systems, and major consumer electronics companies.
One of the issues that Verizon may have to address is the requirement to provide a separate security system. The Motorola system currently employs an embedded conditional access system.
A Federal Communications Commission mandate that service providers offer new customers a separable security system, such as CableCard, came into effect at the beginning of the month. Verizon successfully applied for a temporary waiver to allow it to continue to use its existing system. The company submitted that it is seeking to implement an interoperable downloadable conditional access system.
The use of a separate or downloadable security system would facilitate a choice of consumer electronics suppliers, which is likely to maintain competitive pricing.
Of all the telecommunications companies that are entering the television market, Verizon appears particularly committed to taking on the cable companies with a competitive proposition. Verizon recently announced that it had acquired half a million subscribers to its new service. It is currently testing its own advanced interactive media guide after taking over development from Microsoft.