Cablevision Looks to Lock Up Basic Video Tier

Cablevision Systems Corp. (NYSE: CVC) wants the Federal Communications Commission (FCC) to lift a rule that keeps it from encrypting its basic video tier. If the FCC does so, consumers who use digital TVs with embedded QAM tuners to receive basic channels "in the clear" today would be forced to rent or buy a set-top box capable of displaying the newly encrypted programming.

Cablevision wants the rule lifted as it makes plans to convert its New York City system to all-digital, claiming the move will "have virtually no negative impact on customers" while reducing costs and helping the MSO to improve customer service. On that last point, Cablevision's emphasizing that a waiver of the encryption rule coupled with an all-digital cutover would also help it "activate and terminate service without appointments," while also beefing up the overall security of the network.

Going all-digital, of course, would likewise allow the MSO to reclaim valuable analog spectrum for more HD services, even more channels for Docsis 3.0 services, and capacity for the streams it will need to support its ambitious RS-DVR service. (See Supremes Stand Clear of RS-DVR Case.)

Cablevision has already made a move in this direction, announcing in March that it plans to stop marketing its expanded basic tier in analog format by year's end. At the time, the MSO said just 5 percent of its subs get that tier, which is made up of about 60 channels. Basic tiers generally contain far fewer channels, relegated to local broadcast stations and PEG (public, education, and government) access channels). [Ed. note: We've asked Cablevision for an update on how many channels currently make up its basic video tier.] (See Cablevision Eyes All-Digital Future .)

UPDATE: A Cablevision spokesman says about 20 channels, mostly broadcast networks, make up the basic video tier, with everything else above that's already encrypted. Among other updates, the company noted in the original petition that encrypting the basic tier will reduce on-site visits to service drops, estimating that the number of eliminated truck rolls would save more than 3.5 million gallons of fuel annually. It also believes the encryption of the basic tier will help to reduce service theft.

Cablevision claims that 99 percent of its customers now take digital video service, so the vast majority already use either a digital set-top box or some other CableCARD-equipped device to decrypt and view digital programming. "Granting the waiver in these circumstances will not lead to any 'widespread' compatibility problems that would justify denial of the waiver," Cablevision argued.

But if the waiver is granted and encryption is added, the few Cablevision basic tier customers still using TVs with QAM tuners will need to obtain a box to get that programming.

The FCC Media Bureau has put the request out for comment, with comments and opposing views due by Oct. 22, 2009. Cablevision's replies to those comments will be due Nov. 6, 2009.

The whole matter will be discussed in docket No. 09-168 for those of you out there who want to watch the fireworks fly.

The FCC alert did not go into detail on how Cablevision intends to encrypt the basic tier. Today, its digital boxes use a mix of CableCARDs and SmartCards. Cablevision has also recently introduced a downloadable conditional access system based on the NDS Ltd. "key ladder." (See Cablevision Starts Downloading .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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