Comcast Starts to Lock Up Its Basic TV Tier

MSO Offers Free Boxes to Descramble Signals in 'Select Markets' Where it Has Unleashed Basic Encryption

Comcast has begun to encrypt limited basic channels in its most basic "B1" tier in a select number of all-digital systems, a move that comes about four months after new rules at the Federal Communications Commission (FCC) paved the way.

The decision will affect a small portion of customers who are receiving that tier on TVs without a set-top in systems where Comcast has introduced basic encryption.  According to a Web page detailing the plan, limited basic customers who currently do not use set-tops are eligible to receive up to two Digital Transport Adapters (DTAs) at no charge for two years, or five years if they also receive Medicaid, if they request DTAs during the equipment offer period at or around the time of encryption.   Customers who subscribe to a higher level of service and get limited basic service on a secondary TV without a Comcast-supplied set-top are eligible for one device at no charge for one year.   

Customers who subscribe to HD service at the time of encryption and get limited basic on a secondary TV without a Comcast-supplied box are eligible  for one HD-DTA, upon request, at no charge for one year if it's ordered during the promotional offer period, which begins 30 days before the date of encryption and ends 120 days after encryption.  DTAs are one-way, downstream-only devices that don't have access to pay-per-view content, premium channels, or Comcast's video-on-demand programming.

"We are beginning to proactively notify customers in select markets that we will begin to encrypt limited basic channels as now permitted by last year's FCC B1 Encryption Order," Comcast said, in a statement. "While the vast majority of our customers won't be impacted because they already have digital equipment connected to their TVs, we understand this will be a change for a small number of customers and will be making it as convenient as possible for them to get the digital equipment they may need to continue watching limited basic channels."

Comcast isn’t revealing which all-digital systems are encrypting B1 early on, but a spokeswoman noted last week that the MSO expects to phase in basic tier security in additional markets over the coming months.

As reported earlier, Comcast is also making available a new type of “Ethernet” DTA with home networking capabilities that enables Boxee’s new Cloud DVR box to receive the encrypted version of the B1 tier.  E-DTAs are not compatible with the original Boxee Box, however.

FCC lifted the basic TV encryption ban on Dec. 10, 2012, clearing the way for operators to secure basic tiers in all-digital systems.  Cable successfully argued that basic encryption would help operators cut down on service theft and reduce truck rolls, because it would allow MSOs to activate and deactivate services remotely in most cases.

The largest six incumbent U.S. cable MSOs (Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks), representing about 86 percent of all U.S. cable subscribers,  also agreed to let IP-based retail devices receive  basic TV tiers without a CableCARD.   Longer term, CE companies will also have the ability to license that technology and build it into their products. 

Boxee and Comcast signed a separate agreement that focused on the E-DTA component, but it’s representative of the retail component of the new FCC rule.

Among other major MSOs, Cablevision received a waiver to encrypt its basic tier prior to the new FCC rule.  Meanwhile, Cox has not begun to encrypt its basic TV tier yet, as it currently provides both analog and digital service across its systems, so the new FCC rule does not yet apply to the MSO, a Cox spokesman said.

The new rule will affect a fraction of cable's video customer base, even as more MSOs cut off analog.  U.S. cable ended 2012 with about 56.4 million video subs, with 46.8 million on digital video tiers, leaving fewer than 10 million analog cable customers, says  SNL Kagan senior analyst Ian Olgeirson.  He estimates that between 8% to 10% of U.S. cable subs still take some type of B1 or “lifeline”  video tier.