Operators want to encrypt the basic tier in all-digital systems in part to reduce TV service theft by broadband-only customers. But the idea has met resistance from parties such as Boxee , which enables its broadband-connected box to support unencrypted "clear QAM" TV channels in the basic tier. (See Boxee, Cable Spar Over Video Encryption .)
The operators are proposing the creation of two encryption options, as submitted in a letter to FCC Chairman Julius Genachowski from Michael Powell, the National Cable & Telecommunications Association (NCTA) CEO:
- An operator-supplied adapter, such as a digital transport adapter (DTA), with home-networking capability (using Wi-Fi or a DLNA-enabled Ethernet connector) that can decrypt basic TV signals and pass them along to IP-connected video devices sold at retail. Operators would have to offer this equipment at no charge for a limited time.
- An alternative method, not involving operator-supplied equipment such as set-tops, DTAs or CableCARDs, that retail device makers could license on a non-discriminatory basis. This option could involve software-based security systems such as the one Cablevision Systems Corp. (NYSE: CVC) is currently using, and Time Warner Cable Inc. (NYSE: TWC) has at least taken a look at. (See CableLabs OKs the Cablevision Way and Cablevision May Take Security for a Spin(off) .)
The six largest incumbent cable MSOs -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable, Cox Communications Inc. , Charter Communications Inc. , Cablevision, Bright House Networks -- have pledged to support the proposed framework. They serve more than 84 percent of the nation's cable customers, according to the NCTA's estimates.
A separate proposal from Comcast and Boxee, also floated at the FCC, would use Ethernet-connected DTAs to pass basic video signals and a longer-term option that would let companies like Boxee obtain licenses to embed the DTA functionality.
Why this matters
The nation's major MSOs are chomping at the bit to encrypt their basic tiers and hope this proposal will not only appease the consumer electronics industry but also get the FCC to act favorably on the proposed rulemaking.
If the idea is approved, it may be the final nail in the coffin of AllVid, a possible successor to the CableCARD circulating at the Commission that would apply to cable, telco and satellite TV service providers. The cable industry is keen to avoid another government mandate and, in fact, would rather have the FCC abolish the existing ban on set-tops with integrated security, which took effect in July 2007.
- Comcast & Boxee Connect on Video Security
- Broadcasters Push for Basic Cable TV Encryption
- Comcast Lights Up DTA Encryption
- NCTA to FCC: Call Off 'AllVid'
— Jeff Baumgartner, Site Editor, Light Reading Cable