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Cable subscribers are about to get a sneaky fee

by Herb Weisbaum, NBC News contributor /  / Updated 

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If you have cable TV service, you probably have at least one set-top box in your house. On Monday, a federal rule change takes effect that could eventually force you to rent more cable boxes.

Right now, most cable systems don’t scramble the “basic tier” service which includes local broadcast stations, public, government and education channels, as well as some non-premium programming. Buy basic service and you can plug the cable into a digital set that has a QAM tuner and see these unencrypted channels without a set-top box.

Cable companies want to scramble everything coming through their wire, including basic service. They say this will allow them to reduce theft – prevent people from watching programs they didn’t pay for – and improve customer service.

Their plan is to keep every cable household connected to the network and then activate or terminate service remotely, rather than sending out the cable guy. They say this will improve efficiency – technicians can focus on more difficult installations – and reduce the need for customers to stay at home waiting for service.

The Federal Communications Commission had prohibited the encryption of basic cable since 1994. But in October, the commission voted to allow it, starting on Dec. 10.

“By permitting cable operators to join their competitors in encrypting the basic service tier, the Commission has adopted a sensible, pro-consumer approach that will reduce overall in-home service calls and accelerate cable operators’ transition to all-digital networks,” said Michael Powell, president of the National Cable & Telecommunications Association (NCTA) in a statement.

Should your cable company do that, you will need a set-top box on every TV in the house to watch any cable programming.

A charge for every television
“The cable companies, with the FCC’s blessing, have figured out how to pick the pockets of cable customers and charge them for every television they have – even when they don’t really need a cable box,” said consumer advocate Edgar Dworsky, founder of ConsumerWorld.org

Dworsky told me he has “secondary” television sets in his kitchen, office and guest room. Each of these has the cable wire from the wall connected to it so he can watch his local TV stations. If his cable company encrypts those stations, which he expects it to do sometime in the next six months, he’ll need to get converter boxes for each of those sets – or buy an antenna.

The FCC acknowledged that its rule change would “adversely affect a small number” of cable subscribers.

Dworsky calls that “ludicrous.”  And he points to comments filed by the City of Boston, which warned the commission that allowing cable operators to encrypt basic service “would result in real and substantial benefits for cable operators, and equally real and substantial costs for consumers.” 

None of the six major cable companies in the country has announced a date to encrypt basic channels.

In an email to NBC News, NCTA spokesman Brian Dietz noted that Cablevision already encrypts basic service in New York City under a waiver granted by the FCC in 2010. Dietz said the company did not receive any complaints from its customers.

When asked what it planned to do, Comcast, the country’s largest cable service provider, said in a statement:

“Currently, we do not have any announcements to make. Should we plan any changes in the future, we will notify any impacted customers well ahead of time.”  

(Comcast is the parent company of NBC Universal, which owns NBC News.)

Dworsky insists Comcast and other cable companies would not have lobbied so hard for the rule change if they did not plan to scramble basic cable channels. 

The details of the FCC’s encryption decision
Before a cable company can encrypt basic service, it must give customers 30 days advance notice. The FCC rule requires them to give two free converter boxes to customers with only basic service for two years and one free box to everyone else for one year. After that, the cable companies could sell or rent the boxes.

The FCC’s decision does not require those free converter boxes to deliver high-definition signals. For basic service in HD, customers would have to rent an HD box which could cost as much as $10 a month.

Consumer advocates say these box rentals will become a new revenue stream for cable companies.

“People have gotten used to seeing these channels for free, so this is going to be a setback for many folks,” said Linda Sherry, director of national priorities at Consumer Action. “People have to ask themselves if cable TV is something they want and can afford, because it’s going to continue to go up in price.”

Dworsky hopes unhappy customers will let the FCC and their cable companies know how they feel about the rule change.

“This will be a good test to see which cable companies really care about their customers and which care more about their bottom line,” he said.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

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