The Federal Communications Commission has unanimously approved a proposal to allow cable TV companies to encrypt their basic service tiers in the interest of fighting service theft. The 5-0 vote came almost two months after reports that the proposal had been circulated among FCC commissioners by Chairman Julius Genachowski.
Genachowski (Source: FCC)
Allowing basic service encryption for cable TV companies puts them on a level playing field with their competitors, such as satellite TV and telco TV service providers, for whom there had been no such restriction. The FCC previously had banned the cable TV incumbents from encrypting basic service so that customers would not be required to rent a set-top box to watch their local TV stations.
Encrypting service would allow the cable TV companies to remotely disconnect illegal connections once they are detected, rather than requiring them to spend money to send a technician out to the location to manually disconnect the illegal service.
Basic cable theft has been a thorn in the side of the industry almost since its inception, with a common scenario being a household located near a cable line illegally accessing service via a wire split. Back in 2004, the National Cable & Telecommunications Association reported that about 5 percent of homes near cable lines accessed service without paying. Though that seems like a tiny figure, it translated to about $5 billion in lost revenue for cable TV companies that year.
There has been discussion about lifting the ban on basic service encryption for several years, though it never has been fully supported by the entire industry. Many smaller cable TV companies, represented by the American Cable Association, have feared that requiring cable TV providers to encrypt basic service through set-top boxes would require the smaller companies to buy more boxes to support service they now support without the boxes.
- read this Engadget post
The ACA was opposed to requiring encryption through set-tops
A proposal to lift the ban has been circulating at the FCC