Video services

Boxee, Cable Spar Over Video Encryption

The cable industry and OTT video specialist Boxee are slugging it out at the Federal Communications Commission (FCC) about a proceeding that might let MSOs encrypt their basic video tiers.

Boiled down, cable wants the rule changed, and Boxee thinks consumers are best served if cable's most basic digital video tiers are kept "in the clear" -- something also called "Clear QAM."

Boxee is trying to appeal to so-called cord-cutters by giving consumers a less expensive video alternative. Of recent note, Boxee has introduced a new dongle that lets its broadband-connected device bring in over-the-air digital broadcast channels. But not everyone can get a good over-the-air signal, so using the integrated QAM tuner would let the box also pipe in basic cable channels, so long as they aren't encrypted. Otherwise, Boxee would have to use a CableCARD or some form of cable-approved downloadable security.

"If Clear QAM is eliminated, consumers who have little or no OTA antenna reception will not only be denied the choice of 'shaving the cord' with a product such as Boxee," but will be forced to rent set-tops from MSOs, Boxee told the Commission.

In response, the National Cable & Telecommunications Association (NCTA) argued that basic-tier encryption would be good for consumers in part because it would eliminate truck rolls when service is turned on or off. And, the organization added, it would reduce cable theft and help MSOs go all-digital, noting that cable operators would commit to give away boxes so customers could continue to view basic channels after they are encrypted.

Many of these arguments mimic those that Cablevision Systems Corp. (NYSE: CVC) presented to the FCC when it sought a waiver to the existing rules. The FCC ended up granting Cablevision the waiver about two years ago, but the agency has yet to act on this broader encryption proceeding or decide to move forward on a possible CableCARD successor called AllVid.

Why this matters
Boxee wants to sell more boxes and offer more content options without having to deal with the expense and headache of integrating a CableCARD or another FCC-approved removable security mechanism. A Clear QAM option would add more value to the Boxee device and play into its plan to provide what it thinks is a cheaper alternative to traditional pay-TV.

The proceeding is coming into play as cable operators, notably Comcast Corp. (Nasdaq: CMCSA, CMCSK), are in the process of reclaiming all of their analog spectrum to beef up their high-speed data capacity, add HD services and, possibly, install an IP simulcast. Once that migration is done, all of cable's video services will be piped in digitally. (See Comcast Says Goodbye to Analog TV.)

For more
Read more about Boxee's cord-cutting (and cord-shaving) ambitions, and how Cablevision got the FCC to see it the MSO's way on the basic video encryption issue.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:43:02 PM
re: Boxee, Cable Spar Over Video Encryption

Interesting response/blog from NCTA's Neal Goldberg, including this line:

" Instead of telling regulators that its service is a replacement for pay TV service, they now seem to be saying that their service is dependent on subscription TV and that regulators must… wait for it… dictate how cable service is delivered to its customers."

It is ironic to see Boxee, which is catering to cord-cutters and telling customers to get rid of cable TV service is also implying here that many of its customers currently rely on cable service, too.  But it's still hard to not blame them for not wanting to implement a CableCARD slot when they just have to look at the pain and suffering TiVo went through to get even this far.  JB

Cooper10 12/5/2012 | 5:42:54 PM
re: Boxee, Cable Spar Over Video Encryption

Until a few weeks ago, when Boxee introduced their Live TV adapter (which is still on back order for many customers), there was no way to use pay TV with Boxee - that is, anybody using both pay TV and Boxee were using different inputs on the TV, because there was no way to integrate a pay TV feed on the Boxee box.

But now suddenly 40% of Boxee's customers "rely" on pay TV??  Avner Ronen's math is suspect, at best, and more likely intentionally misleading.

Newsflash for Boxee - these customers can continue to use cable on a different input of their TV with Limited Basic encrypted, just like they did before Boxee made the Live TV adapter available.  If you want to offer a product compatible with pay TV, then build a product that is compatible with pay TV, or take your chances with OTA reception.  You can't have it both ways.

Jeff Baumgartner 12/5/2012 | 5:42:53 PM
re: Boxee, Cable Spar Over Video Encryption

It was surprising and a bit ironic to learn of Boxee's claims that so many of its users rely on pay TV.  And it's true that TVs with QAM tuners can already get those channels... though I suspect Boxee's wants its device to integrate thta component and be the Input 1 device rather than requiring users to toggle. But, you're right, they could make a cablecard device... i just don't see them jumping through the technical hoops and paying the price  to make that work.

In the meantime, Boxee Avner Ronen lobbed his latest volley on the debate with a blog post/response to the NCTA filing, claiming the cable guys' argument was full of falsehoods, particularly around cable's position that encrypting the clear qam channels will boost service times and reduce truck rolls.

He also claims that a cablecard slot would make the Boxee Live TV tuner 2-3 times more expensive for consumers. JB

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