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The Federal Communications Commission has granted cable operators permission to completely encrypt their television lineups, potentially requiring every subscriber to rent set top boxes or CableCARD technology to continue watching cable-TV.
The FCC voted last week 5-0 to allow total encryption, a reversal of an older rule that prohibited encryption of the basic tier, allowing cable customers to watch local stations and other community programming without the expense of extra equipment.
The cable industry said the decision is a victory against cable theft, claiming that nearly five percent of all cable television hookups are illegally stealing service, at a cost estimated at $5 billion in lost revenue annually.
But some third party companies offering alternatives to costly set top boxes with endless monthly rental fees claim the industry move towards encryption is more about protecting the cable monopoly than controlling signal theft.
Current licensing agreements do not allow third party set top manufacturers to support scrambled channels without an added-cost, cable company-supplied set top box or card. That means a would-be customer would have to invest in a third party set top box and a cable company-supplied set top box to manage scrambled channels. That may leave customers wondering why they need the third party box at all.
This presented a problem for Boxee, which manufactures third party set top boxes, some with DVR capability. If cable systems completely encrypt their lineups, Boxee customers will need to rent a cable box and work through a complicated procedure to get both to work together.
Boxee officials suggest both an interim and long term solution to the dilemma — both requiring the goodwill of the cable industry to work out the details.
For now, Boxee and Comcast have agreed to work together on an HD digital transport adapter (DTA) with built-in Ethernet (E-DTA). A Boxee user would then access basic tier channels directly through an Ethernet connection and change channels remotely using their enhanced set top via a DLNA protocol.
A longer term solution would be to create a licensing path for an integrated DTA solution included inside third party set top boxes. This would eliminate the need for an added cost E-DTA box.
Cable operators planning to encrypt their entire television lineup will soon begin notifying customers of their plans. Under an agreement with the FCC, those with broadcast basic service will get up to two boxes for two years without charge (five years if the customer is on public assistance). Those who already have a cable box or DVR will get one box for two years at no charge. The cable company can impose monthly rental fees on additional boxes and begin charging for every box after two years.
Former FCC chairman Michael Powell, who now presides over the nation’s largest cable lobbying group, called the FCC decision “pro-consumer” despite the added expense and inconvenient many customers will experience.
“By permitting cable operators to join their competitors in encrypting the basic service tier, the commission has adopted a sensible, pro-consumer approach that will reduce overall in- home service calls,” said Powell, president of the National Cable and Telecommunications Association. “Encryption of the basic tier also enhances security of the network which reduces service theft that harms honest customers.”
Comcast is a leading proponent of total encryption, because it would allow them to start and stop service remotely, without having to schedule a service call to disconnect service. Cablevision already encrypts its entire lineup in certain areas under a previously-obtained waiver from the FCC. The company said it saved money reducing labor costs associated with service calls to physically connect and disconnect service.
Other stories of interest:
- Boxee Goes On Offensive Against Basic Cable Encryption: What a Waste of Money and Energy
- Cablevision Going All-Digital in New Jersey; $6.95/Mo Cable Boxes Offered Free… for Now
- Time Warner Cable Begins Digital Cable Conversion in Upstate New York
- Say Goodbye to Analog Cable TV: Operators Need the Space for IP-Based Video
- Connecticut Man Wants to Charge Cable Companies Room and Board for Unwanted Cable Boxes
This is outrageous. The FCC is bought and paid for.
“The company said it saved money reducing labor costs associated with service calls to physically connect and disconnect service.”
For some reason I get this feeling that those savings will NOT be passed on to the consumer and prices will continue to increase. This just gives cable companies another way to charge consumers a fee to rent equipment because we won’t be able to buy our own from a third party for a reasonable price.
Exactly. All of the benefits will accrue in the industry’s pockets. Consumers will gain nothing from this except a bigger bill.
Everything the cable companies have stated is just misdirection and an attempt to cover up the truth. This plan is being pushed solely to force their captives, er, customers to rent a box for $10 to $20 per tv per month. Just like their plans to charge $4 month for a $40 modem. Think about the additional revenue they will make from that. Now they can pay off politicians and FCC members and still make a nice profit from these charges.
Jeremy,
While I am not in favor of this move, the charge for the DTA required to receive basic channels will be around $3 (that’s the price currently being charged AFTER the 2 to 5 year FREE period has expired. As for your supposed $10-$20/month charge: That would be for a full functioning cable box, or DVR – not the limited function DTA that would be needed here.
That is not what the articles from Engadget and other sites are stating. I have read 3 articles, and all are pretty much the same as below. I might qualify for 1 free one for 5 years. If there is a might involved, that means the cable operator will do all they can to limit or deny it.
http://www.engadget.com/2012/10/14/fcc-to-allow-encryption-of-basic-cable-with-a-few-strings-that/#comments
“…The other, less interesting stipulation, is that you might be entitled to at least one free set-top box or CableCARD for up to five years, depending on what package you subscribe to or if you are on Medicaid. The free hardware will only be for existing customers who apply within four months of when your provider rolls out the basic cable encryption. The real loser here are those few who actually use the Clear-QAM tuner in their TV, or perhaps those that use HTPC software that’ll never get an update.”
From Time Warner’s own page:
http://www.timewarnercable.com/en/residential-home/tv/equipment.html
DVR box and service – $19.90/mo
Standard box – $8.95/mo
Besides that, I have no interest in putting a box on the floor with extra cables running up and down the walls in the bedrooms where the current Clear-QAM basic cable tvs are, along with another shoddy remote that doesn’t properly work with the tvs.
While cable companies are free to extend the “free period,” the terms of the FCC decision are elaborated for everyone below:
{http://www.fcc.gov/document/commission-relaxes-cable-encryption-prohibition}
— begin quote:
To limit the costs that affected consumers may face due to encryption, we adopt our proposed consumer-protection measures that require a cable operator that chooses to encrypt the basic service tier to:
(i) offer to existing subscribers who subscribe only to the basic service tier and do not use a set-top box or CableCARD, the subscriber’s choice of a set-top box or CableCARD on up to two television sets without charge for two years from the date of encryption;
(ii) offer existing subscribers who subscribe to a level of service above “basic only” but use an additional television set to access only the basic service tier without the use of a set-top box or CableCARD at the time of encryption, the subscriber’s choice of a set-top box or CableCARD on one television set without charge for one year from the date of encryption; and
(iii) offer existing subscribers who receive Medicaid, subscribe only to the basic service tier, and do not use a set-top box or CableCARD, the subscriber’s choice of a set-top box or CableCARD on up to two television sets without charge for five years from the date of encryption.
— end quote
As has been industry practice, after the two year free period expires, cable companies can begin charging a monthly rental fee for each box. Current DTA boxes typically rent for $0.99 a month each. The enhanced boxes required to make this work for third party devices may rent for more ($1.99 a month was one estimate).
No, these boxes will not cost nearly as much as current DVR boxes do, but it comes at an added expense on already high cable bills. Most cable companies will not allow you to purchase these devices — you have to rent them forever. The “consumer benefits” Powell trumpets are phony baloney. This is a total win for the cable industry. Signal theft may be a problem, but solving it will not reduce anyone’s cable bill — the companies will just book it as extra revenue and profit. This solution allows for the wholesale conversion of cable systems to encrypted digital, which is really what is going to happen here, and makes the subscriber pay for it. This equipment should come permanently free of charge to the subscriber, subsidized by all of the benefits the industry will win for itself.
One MAJOR reason that some folks might not want a DTA, even if it is free, is that DTA is clutter. I have one relative who has beautifully clean living room with a flat screen mounted over the fireplace. No place for a DTA.
Another is that DTAs can be a pain in the Ass to use.- particularly for Senior Citizens. As the DTA is a separate device it has to be turned off and on separately. While the remote that is usually supplied turns both the DTA & TV on and off at (almost) the same time often the two will get out of sync (turning the TV on and the DTA off). While the folks reading this blog can likely deal with this problem, I have met many seniors who could not.
Time Warner’s comes with Velcro strips designed to let you affix the box to the back of the television itself. It is small enough that it might just work for people in this situation.
BTW, mounting a television above the fireplace has always been not recommended. The extra heat from the fireplace shortens the life of the television, and viewing angles are supposed to be straight-on, to avoid neck strain. We considered doing something similar until we realized manufacturers were issuing memos to retailers urging people not to do this because sets began failing after 3-5 years from the excess heat problem.
Interesting on the velcro. Might work in some situations – but I wonder if the IR will work.
RE: Fireplace mounting. I’m with you but in the case I referred to the WAF (Wife Acceptance Factor) RULES! That’s the only way she finds it acceptable to have a TV in the living room. And it is a lovely living room!!
What about locals that are sent in clear QAM now? I pay for locals only just to get the triple play and have a HTPC with multiple tuners in it that can get clear QAM channels. I realize that this rule change allows the encryption of basic service but there was nothing about encrypting the local stations.
It is my understanding local stations can be encrypted as well, since the decision renders the old prohibition against encrypting the broadcast basic tier moot. That tier was primarily for the carriage of local stations. Clear QAM is definitely an endangered species. The cable industry thinks it represents a major target for signal pirates.