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January 8, 2010
The Federal Communications Commission (FCC) will now allow Cablevision Systems Corp. (NYSE: CVC) to encrypt its basic video tier in its New York City franchise area, but only on the condition that the MSO complies with a handful of set-top- and CableCARD-related concessions.
Cablevision brought the issue up last fall as it made plans to convert its NYC system to all digital, claiming that having encrypted basic tier programming would improve customer service, reduce costly truck rolls, and beef up the overall security of the network. (See Cablevision Looks to Lock Up Basic Video Tier .)
About 20 channels, mostly of the broadcast network variety, make up the MSO's basic video tier. The vast majority (99 percent) of Cablevision's customers already subscribe to a digital TV service. Cablevision's basic tier will continue to run unencrypted in its Yonkers, N.Y., and Connecticut systems.
Going all digital in the NYC footprint will also allow the MSO to free up analog spectrum for other, more advanced services, and perhaps open up required streaming capacity for its ambitious Remote Storage–DVR (RS-DVR) service. (See Supremes Stand Clear of RS-DVR Case.)
Twenty-three organizations, including the Consumer Electronics Association (CEA) , formally opposed Cablevision's basic tier lockup. Some felt encryption of the basic tier would require Cablevision to foist boxes and unnecessary fees on the existing basic customer base. Some feared companies that make devices and software that rely on clear-QAM signals (such as Elgato Systems) might go out of business, since TVs with clear-QAM tuners are only capable of displaying unencrypted digital cable programming.
The FCC will allow Cablevision to encrypt its basic programming tier, but wants the MSO to:
Offer current basic-only subs up to two set-tops or CableCARDs without charge for up to two years
Give digital customers another set-top or CableCARD for no charge for one year if they have an additional TV presently receiving basic-only service
Provide qualified low-income basic-only subs up to two set-tops or CableCARDs without charge for five years
Give current basic-only subs with "clear-QAM" devices up to two set-tops or CableCARDs without charge for up to 10 years
Not charge connection fees for pro installs of all those devices for basic-only subs once it begins encrypting the basic tier
Cablevision is also on the hook to provide the Commission with three-month, six-month, and 12-month reports detailing the number of customer complaints tied to the waiver; the number of boxes, CableCARDs, and installations provided at no charge; and what impact the waiver has had on truck-roll reductions.
Cablevision declined to say when it will start to encrypt its basic tier.
Cablevision is just the fourth MSO to get such special dispensation from the FCC. In 2003, the agency awarded similar rule waivers to two MSOs in Puerto Rico -- Liberty Cablevision and Centennial Puerto Rico Cable TV Corp. -- to help them clamp down on rampant service theft. Waitsfield Cable Company of Vermont got the first back in 2001 to help it connect and disconnect services remotely to a resort area full of "transient subscribers" and seasonal rental properties.
— Jeff Baumgartner, Site Editor, Cable Digital News
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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