FCC OK of Cable Encryption Still Seen Likely, Even With CE Concerns
Cable operators still will be able to scramble all channels, as FCC staff are working toward an order allowing encrypting on the basic tier, agency and industry officials said. They said work continues to be slowed by concerns that some consumer electronics wouldn’t work at all with encrypted systems (CD Feb 9 p4). But top aides in the Media Bureau and office of FCC Chairman Julius Genachowski are still believed by CE and cable officials to be inclined to circulate for a vote by commissioners an order allowing encrypting. Operators have said encrypting all broadcast and other expanded-basic channels would let them reduce carbon dioxide emissions when technicians drive to customer homes to turn on and off video, though CE companies still say those claims are overblown.
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Bureau officials are now trying to figure out how to proceed with an order while addressing the concerns of makers of Boxee TV and other devices that directly get unencrypted shows without using a CableCARD that would jack up the equipment’s price, agency and industry officials on both sides of the debate told us Monday. FCC members seem likely to have a vote within a month or so an order to allow the encryptions for all operators, industry officials predicted. Also possible is a related proceeding on moving to a nationwide standard for non-proprietary home networking between home devices and cable set-top boxes, some executives said. A bureau spokeswoman declined to comment.
FCC inaction is expected to continue for now on proposing AllVid rules that would require cable operators to all connect directly to a wide variety of CE devices without using a CableCARD, cable and CE officials said. Instead, the bureau is believed to be looking at issuing a rulemaking notice or taking other action on home-networking standards for set-tops. Some speculate the bureau may seek to get one port on the back of some set-tops that would allow for home networking, such as what was accomplished through the IEEE 1394 jack that’s being phased out. CableCARD rules taking effect in December require outputs on some set-tops that allow for home networking, and some said the Digital Living Network Alliance could be a standard. CEA and NCTA officials declined to comment.
There’s little room for technical solutions so clear QAM devices can get in short order programming without needing to use a CableCARD, which some of the products don’t have outputs for, that would let cable operators encrypt all content in all-digital systems, according to CE executives. They said the only solution might be to require cable operators to use traps so their video service couldn’t be stolen by people who don’t pay for it. “There’s a technical solution to eliminate clear QAM” concerns on encrypting, “if the cable operators want to do this,” said CEO Ken Plotkin of Hauppauge Computer Works, maker of clear QAM products. “If they had just put in traps that could be remotely enabled or disabled, this wouldn’t be an issue."
"I understand the FCC is inclined to doing this, but they're being pushed very hard by the cable operators, and if they do this, it’s really premature,” Plotkin said of the possibility of an upcoming order allowing encrypting. “The cable MSOs have created some compelling arguments, but the problem is a lot of their arguments just do not hold water.” Coming up with a replacement to 1394 jacks “is fine and good, but our position is you shouldn’t need to have a cable-TV box at all,” he said. “Cable-TV boxes consume a great amount of power.” NCTA’s filing last week responding to Boxee’s concerns about encryption “does not mention the environmental benefits described in prior filings” from the association, the company noted in a Monday filing.
The cable and CE industries continued trading FCC filings and blog posts about encryption. Boxee was the latest to trade rhetorical barbs with cable. CEO Avner Ronen posted a blog entry Monday taking issue with NCTA, and the company made a filing in docket 11-169 (http://xrl.us/bmryjk) responding to the association. Both documents from Boxee said the cable industry made misleading comments (http://xrl.us/bmryq5) to the commission, in contending Clear QAM supporters want pay-TV customers to have to wait for a technician to show up to turn on service. “When you disconnect from Cable (which we certainly encourage you to do if you have good antenna reception) you don’t have to wait for a cable guy to come to your home,” Ronen wrote (http://xrl.us/bmryjp). “If the cable company wants to block you from getting service they actually do it outside of your home.”
Boxee and Hauppauge contend many cable customers would be affected by encrypting, because they use clear QAM devices that would be rendered inoperable. Those companies say the NCTA is downplaying the number of such devices and hasn’t provided concrete estimates. And “implementing a CableCARD based solution would have made the Boxee Live TV tuner 2-3 times more expensive for consumers, would require a CableCARD from a local cable company, and an extra monthly rental fee,” Ronen wrote. “The data suggests that a significant number of U.S. cable subscribers will be affected should this rule be passed,” the company said in a filing (http://xrl.us/bmrykf). It cited Nielsen estimates that there are 2.93 TVs on average per home, and the FCC’s encryption rulemaking stating more than 75 percent of cable customers have at least one device at home that demodulates and decrypts programming. Plotkin noted that all Windows Media Center PCs sold by Dell and Hewlett-Packard since 2007 have allowed for clear QAM.
A small CE retailer, Hephner TV and Electronics, chimed in, asking the FCC not to allow encryptions. With a single store in Kansas, it’s the smallest member of the Consumer Electronics Retailer Coalition, which also includes major retail chains. Owner Greg Hephner said the fees that Cox Communications, which serves his area, charges for set-tops and other equipment show why encryptions shouldn’t be allowed. “The ‘Cox Box’ is one of our greatest objects of consumer complaint,” with the cable operator charging about $5 monthly per box and an $11 “digital gateway” fee, he wrote. Cox’s set-top “charges vary by market,” a spokesman said. “We agree with NCTA that encryption should be an option for cable systems that want to transition all of their customers to digital. This is appealing for systems in areas with very high digital penetration already and allows operators to more efficiently serve customers, with fewer truck rolls and more expeditious service changes by communicating remotely with the digital set top box."
"In addition, we have a multitude of customers who simply want basic TV at the cheapest cost” and are “are not interested in 200 channels,” Hephner wrote. “CableCARD is not a viable alternative for those who want to watch TV without any set-top box. No major TV manufacturer still produces a CableCARD-equipped set. When they did a few years back it was a nightmare for us and our customers.”