FCC Proposes Allowing Basic Encryption

Had previously prohibited cable operators from scrambling their digital basic tiers
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FCC Chairman Julius Genachowski is proposing allowing cable operators to encrypt their digital basic tier, according to a commissioner aide familiar with the Notice of Proposed Rulemaking, which he said was circulated to the other commissioners for their votes this week.

The FCC adopted the rule prohibiting cable operators from scrambling their digital basic tiers so viewers with cable-ready sets would not have to buy or rent a set-top.

But it left room for waivers and granted one—most prominently—to Cablevision in 2010 to encrypt its New York-area systems, pointing to benefits such as “reduced costs for Cablevision, improved customer service and reduced fuel consumption and CO2 emissions.” It also helped that 99% of Cablevision’s customers had either a set-top or a CableCard.

According to an aide to one of the commissioners who has seen the item, the notice of proposed rulemaking suggests allowing all cable operators to encrypt digital basic, given that the world is going digital and it would save gas on truck rolls by allowing activation and de-activation remotely, as well as make it easier to prevent theft of service.

The commission has granted several waivers already, with still more in the hopper from cable operators. “We basically just copied the Cablevision petition,” is how one cable attorney described it to the commission staffer.

One byproduct of encryption would be for those third and fourth sets in the home, some of them analog, that would now need a set-top to receive the scrambled signal. “The issue of who it will affect the most is those who have one set-top but four TVs, and I think part of the item is to try to figure out what’s the best way forward for that,” the source said.

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