Broadcast Network Backing of Encryption Comes as FCC Staff Works on Order
Interests of cable operators and the Big Four broadcast TV networks aligned in what some called a rarity late last week. The owners of the ABC, CBS, Fox and NBC networks backed encryption of cable’s basic programming tier (CD March 2 p4) that includes signals of their affiliates by all-digital cable systems. It’s the first time cable programmers have directly weighed in on an FCC rulemaking proposing to let operators scramble basic channels to cut down on signal theft of unencrypted signals and let companies turn on and off service without technician visits to subscribers. The most vociferous consumer electronics manufacturer against encryption continued to oppose it: Boxee said broadcasters added no new reasons for the commission to act.
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The Media Bureau continues to work out details of what’s expected to eventually amount to a draft order that will circulate for a vote allowing the encryption, agency and industry officials said. They said work continues to be slowed by Boxee’s concerns that CE devices using clear QAM channels that aren’t scrambled and lacking CableCARD plugs won’t be able to get cable after encryption occurs. The bureau seems to want to OK encryption, it’s just taking more time than expected to work out the details of an order, a cable lawyer said. A bureau spokeswoman declined to comment.
The broadcasters portrayed encryption as a way to cut theft of basic-cable service and so of their programs, making it an issue that could prevent the loss of U.S. jobs tied to creating the content and avert broadcast content moving only to pay TV. “Transmission of this valuable programming to consumers’ homes in unencrypted digital format increases the risk of service theft and unauthorized copying,” wrote executives of Disney, CBS, Comcast’s NBCUniversal and News Corp. They backed “reasonable transitional measures” for consumers who need other CE equipment to continue to get cable programming that’s encrypted. The filing Thursday in docket 11-169 (http://xrl.us/bmxmxm) noted the FCC’s encryption rulemaking proposed that operators give subscribers during a “transitional period” devices to decrypt basic-tier programs.
"Encryption also will benefit consumers because it will streamline the provision of digital service to consumers by eliminating the need for on-site service calls to activate service,” the broadcasters said. “Encryption is the universally accepted way to secure distribution of pay digital content, including via satellite, telco, IPTV, and online video providers. As content companies, we support allowing cable operators to have the same ability to fully encrypt their digital programming, including the basic service tier.” The CEOs of 14 cable operators large and small wrote the FCC recently seeking prompt action on encryption. Comcast Senior Vice President Kathy Zachem reported discussing that letter with FCC Chief of Staff Zac Katz and in another conversation with Sherrese Smith, chief counsel to Chairman Julius Genachowski. “I also encouraged the Commission to move forward expeditiously to complete the rulemaking,” Zachem wrote in an ex parte filing posted to the docket Thursday (http://xrl.us/bmxmye).
Broadcaster backing of a cable initiative drew attention. A proponent of encryption called it further reason for the FCC to act, and CE foes of scrambling said the support’s to be expected. “It’s not everyday that ACA and the Big Four networks will agree on policy, but when it happens, you have to take notice,” said Vice President Ross Lieberman of the American Cable Association. “I think it also shows ... there is a reason for doing this.” The commission should OK scrambling, “because the record has now been fully developed,” Lieberman said. He noted RCN has a pending request for encryption dating to before the rulemaking notice. Agency and industry officials have said that request and a few others may wait until the FCC issues new rules for the entire cable industry. The NCTA declined to comment.
"The letter just shows that encryption will benefit content companies in addition to cable companies” and Boxee doesn’t doubt that, General Counsel Melissa Marks said by email. “It doesn’t change the fact that it will HARM consumers, and do so unnecessarily since the same outcome can be achieved through other, less harmful means.” AllVid rules for all pay-TV systems to connect directly to CE devices or an Internet Protocol feed of programming to devices are alternatives, she said. “If cable companies are allowed to have their cake and eat it too at this critical juncture, they will have no motivation to work towards one of the more consumer-friendly, competition-friendly options in the future."
CEO Ken Plotkin of Hauppauge Computer Works also is skeptical of broadcasters’ intentions. “Of course the content owners would appreciate encryption of all of their content” but he said he doesn’t “understand what kind of point they are trying to make here.” All networks and many TV stations broadcast in HD unencrypted signals using the Advanced Technical Standards Committee’s standard, he noted. “Are they trying to say that the next step after encrypting clear QAM is they'd like to encrypt ATSC, so that you need a set-top box to get over-the-air high definition ATSC television,” Plotkin asked. He said that’s “not in the best interests of American consumers” and seems “a bit wacko.”