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FCC Vets Encryption-Ban Order

WASHINGTON — Federal Communications Commission
chairman Julius Genachowski has circulated an order
allowing cable operators to encrypt basic-cable tiers,
which operators say should mean a dramatic decrease
in theft of service and savings on millions of truck rolls,
though it also means investment in equipment to ensure
viewers can still get a signal.

According to multiple sources, the 40-page order incorporates
a general pledge by cable operators on accommodating
Internet protocol-enabled devices and
a specific agreement between Comcast and Boxee, a
video-delivery device.

According to FCC sources, cable operators are generally
OK with the FCC draft order, as are both the Democratic
and Republican commissioners, although there
could still be edits.

The FCC adopted the ban on scrambling digital-basic
tiers so that viewers with cable-ready sets would not
have to buy or rent a set-top box, but it has concluded the
cost-benefit balance of encouraging the move to digital
cable — which will free up bandwidth for things like
faster broadband — tips in favor of lifting it.

In a July 25 letter to the FCC, in response to complaints
by Boxee and others about the inability of such devices to
access programming on basic tiers once they are encrypted,
the National Cable & Telecommunications Association said
that it thought the concerns were misplaced. Its six largest
members, though, would make a three-year commitment
to ensuring those devices could receive a signal through one
of two options pertaining to retail boxes, the NCTA said.

The FCC has incorporated the cable proposals into its
order, though it has not adopted the three-year sunset
on the cable fix for IP-enabled devices. Instead, it agreed
to review the marketplace after two years.