Cable Anti-Theft Crusade Hits Web

Baltimore -- Cable-industry executives who want
cable-service pirates to walk the plank are expanding their crusade into the Internet,
where high-tech crooks are heavily promoting their black boxes and other illegal wares.

In fact, Showtime Networks Inc. vice president of sales and
affiliate marketing Ralph Valenti -- speaking at a "Theft of Service" panel at
the East Coast Cable '99 show here last week -- said the industry's Anti-Theft
Cable Task Force is becoming the Broadband & Internet Security Task Force.

The task force's latest name change reflects the
changing cable industry and the fact that tech-savvy pirates rely heavily on the Web to
promote their theft devices to consumers, Valenti said.

He and the other panelists estimated that cable theft is a
$5 billion to $6 billion annual problem. They didn't break down those numbers, but
the National Cable Television Association has previously said that its estimate of $6
billion in annual theft losses excludes pay-per-view.

Those illegal "entrepreneurs" are raking in
between $500 million and $1 billion yearly from pirating devices, General Instrument Corp.
director of security programs Stan Durey said.

Whatever estimates are used, Valenti said, "An
extraordinary amount" of revenues is being lost in theft of basic-cable service

The task force is trying different approaches to get both
the industry and the public behind the anti-theft crusade.

For the industry, Valenti said, the focus is on the fact
that reducing such theft represents "a revenue opportunity" -- and a significant
one, even if just one-third of the illegals are converted to paying customers.

For the public, he said, the latest spots -- available from
Dan Backo, director of the NCTA's Office of Cable Signal Theft -- the emphasis is on
parents as role models. "What kind of example are you setting for your
children?" the spots ask, before closing with, "It's not only wrong --
it's a crime."

Past industry spots threatening jail time didn't work,
Valenti said, because the public knows that won't happen. As proof, he showed clips
from fall-1998 focus-group sessions in which consumers in three markets agreed.

Those sessions also indicated that cable-operator employees
are among those contributing to cable theft, and that consumers see telephone companies as
more prone to crack down on illegal hookups than cable.

Further complicating the industry's crackdown hopes is
the fact that federal prosecutors tend to focus only on those cases involving hefty dollar
losses, and little or no action is being taken at the state level, the speakers said.

Still, the potential for theft will only escalate in the
new era, as operators move into digital, Internet access, telephony and other enhanced
services, Backo and Durey warned. Moreover, consumers have no incentive to buy digital
services if they're getting analog service free, albeit illegally, Backo pointed out.

Pam Stuart, a Washington, D.C.-based attorney who
represents Backo's office, said another promising development is that the Department
of Justice is forming a task force to target Internet crime.

She urged cable executives to contact the DOJ in order to
add cable concerns to that unit's agenda.