Would you pay Time Warner Cable $6.99 a month to guarantee they will update your equipment on a regular basis to provide you with reliable service?

An unspecified number of customers participating in a Time Warner Cable focus group are being asked that question this month as the cable company ponders charging the new fee in the future.

“As technology, Internet speeds, and entertainment options keep getting better, you want, and need, your equipment to keep up. That’s why we’re introducing Time Warner Cable’s Future Proof Guarantee. Starting next month you will see a $6.99 equipment lease fee on your bill, which will guarantee you have the right equipment for all your TWC services. That means we will keep your Modem, and DVR set-top box up-to-date so you can enjoy a seamless, reliable experience and the service you expect.”

To be clear, Time Warner is only considering this new fee and is testing the concept with its focus group to gauge potential customer reaction.

The Stop the Cap! reader and focus group member who shared the news with us was not impressed.

“This feels like another money grab from an already very-profitable company,” our tipster told both us and the cable company.

The new fee would double-down on Time Warner’s already lucrative new cable modem rental fee, now $3.95 a month. The new $7 fee would cover “upgrades” that most subscribers might assume they were already entitled to as paying customers. We have no word if this fee would replace existing equipment rental fees or would apply in addition to those rental fees.

Any customer renting equipment can generally be assured of getting a free “technology upgrade” just by swapping existing equipment at any Time Warner Cable store — no additional fee required.

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.

Analog cable service is on the way out in Montreal.

Vidéotron Ltd. has stopped accepting orders for analog cable service from new customers as it prepares to make the transition to all-digital operation sometime in 2013.

The cable operator, dominant in Quebec, wants to dump analog service to make room for additional HD channels and faster broadband service, and although the company has retained a few dozen analog channels in some areas for the benefit of hotel operators and budget-minded seniors, the time has come to turn the lights out on the 60 year old technology.

Vidéotron is transitioning its customers hanging on to analog service in chunks, according to a report in the Gazette.  The vast majority of those customers are seniors, but hotel rooms also comprise a substantial percentage of the 412,000 holdouts.

Vidéotron experimented with a partial transition to digital in the Gatineau region, cutting analog service to just 30 channels. To entice customers to switch to digital, Vidéotron offered free digital set-top boxes to existing analog customers and special promotional packages that gave them digital service at the analog price. Company officials say it is unlikely customers across the Island of Montreal would get similar deals, but some price concessions on equipment are likely.

Vidéotron hopes the transition will make room for up to 100 new HD channels on a system that currently has just 71. The cable operator is facing increasing competition from Bell’s Fibe TV and satellite service, which provides a larger selection of HD channels, particularly for Anglophones in the province.

Time Warner Cable executives told investors on a morning conference call the cable company has embarked on a gradual transition to an all-IP-based distribution platform which could eventually mean the end of today’s set top boxes and radically increase the amount of bandwidth available for its broadband and video networks.

“Whatever the merits of that from an engineering sense, all things IP are the standards that the world is building devices to,” said Time Warner Cable CEO Glenn Britt. “So that’s the standard we’re going to end up migrating to until something better comes along.”

The transition will help Time Warner Cable support additional customer-owned equipment, including video game consoles, streaming online video boxes, and televisions with built-in support for cable-delivered channels.

“If you look at the cable in 1980s, there weren’t a lot of set-tops, and I think we’re going back to that over time,” Britt said.

Britt has repeatedly criticized set top box equipment as cumbersome, expensive, outdated, and disliked from the perspective of customers. He noted the only reason Time Warner uses the boxes is to support traditional televisions that cannot handle all of the services the cable company offers today, including video-on-demand and encrypted premium channels. Moving to a different technology platform can result in significant savings if cable operators adopt open standard devices and technology.

Later this year, Time Warner will also be launching a nationwide channel realignment, affecting virtually every subscriber around the country. The cable company is adopting a unified, genre-based, national channel lineup, putting popular cable networks on identical channel numbers in every city.

Time Warner’s reported results found the company losing an additional 169,000 video subscribers during the quarter, a new record loss for the cable operator. Despite that, the company still booked an 8% increase in profits, thanks to higher prices for service and increases in the number of broadband customers. Time Warner blamed the video subscriber drop on seasonal losses from departing college students and those heading to vacation properties, as well as the downturned economy.

But the nation’s second biggest cable operator reports it has several initiatives under way for subscribers which they feel will boost earnings and subscriber numbers:

• Over the last 60 days, Time Warner deployed a new set-top box guide throughout the eastern region. After the Olympics conclude, the company will introduce the new guide across the western half of the country. The new guide features a new color scheme and better graphics, and is supposed to make navigation and search easier to use;

• The company will introduce IP-based set top boxes and home gateway devices by next year. The newest gateway is a combination DVR, DOCSIS 3.0 cable modem, and a video transcoder that can convert QAM-based video to IP for devices including game consoles and new IP set top boxes. Time Warner’s newest DVR will include the capability of recording five shows at the same time while watching another and 1TB of storage.

Install it yourself.

• Time Warner Cable’s TV Everywhere service will expand to include video on demand and the possibility of watching certain networks while outside of the home. The current service only works when you watch over your home Wi-Fi network.

• The cable operator’s Internet Essentials offer, which includes a 5GB monthly usage cap, will move beyond Texas and reach everywhere the cable operator serves by the second half of next year. When a usage meter shows up on your My Services page on Time Warner Cable’s website, you will know this new, optional plan is on the way.

• Time Warner is revamping their website to let customers shop, order, and buy more services online.

• Self-install kits will become increasingly common for customers comfortable installing their own services. The Easy Connect packages are available in stores or by mail, and are free of charge with no installation fee.

• Service call windows will continue to be refined. In most cities, two hour windows are currently offered, but the company is now moving to one-hour windows in many markets. In some cities, 15-minute windows for the first appointment of each shift are now available to customers who don’t want to sit at home and wait all day for the cable guy. The company is now also including an estimate of how long it typically takes to complete the type of service call requested.

• Customers continue to gravitate towards faster broadband service plans. The company’s Turbo, Extreme and Ultimate tiers together garnered 157,000 new adds in the second quarter and now comprise over 21% of high-speed data customers, up from 17% a year ago and 9% three years ago.

Britt also took questions about the impact Google Fiber will have on Time Warner Cable’s operations in Kansas City.

“There’s a lot of effort going on around the country to see what we could do as a society with more bandwidth in kind of a laboratory sense,” Britt said. “I view the Google effort as that. […] And I think that’s good for our business. We have a wonderful infrastructure, we have bandwidth, we have a way to go much faster with DOCSIS 3.0 by adding [higher speeds] to the offering. And the more the people figure out how to use broadband, the better off we’re going to be. So I think this is a good thing, not a bad thing, that people are trying to figure out how to use this technology.”

Time Warner Cable is rolling out a new look to its online program guide and set top box menus after ongoing criticism from customers who found the old look hard to read and software cumbersome to use.

Central New Yorkers woke up this morning to the upgraded look, which the company says now features a sleeker and more modern appearance. It also adjusts the color scheme to make on-screen text easier to read and channels easier to find.

Set top box software is criticized even by cable executives, who call the often-proprietary software outdated and difficult to update and manage. Some cable operators have licensed set top box software from TiVo, while others are switching to an IP-based “web”-like experience that can offer viewers more detail and a customized appearance.

Ultimately, some cable executives would like to see the back of set top boxes altogether, hoping future technology upgrades will let viewers access cable programming and features from hardware built-in to modern televisions.

Time Warner Cable CEO Glenn Britt is among them.

“I hate set-top boxes,” Britt said in a recent interview.

[flv width=”432″ height=”260″]http://www.phillipdampier.com/video/YNN Syracuse Time Warner Cable makes changes to onscreen guide 6-4-12.mp4[/flv]

YNN Central New York reports on the latest update to Time Warner Cable’s Navigator set top box software, unveiled early this morning in the Syracuse area. (1 minute)