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Cable Technology Feature Article

February 09, 2012

Is Cable Television Nearing Extinction?

By Nick McDonald, Contributing Writer

Cable companies feeling the heat from a loss of subscribers and an increase in digital television alternatives are asking the Federal Communications Commission (FCC) to reconsider a rule regarding the encryption of basic cable. In the early nineties, the FCC (News - Alert) adopted a rule to make sure cable companies kept a portion of the broadcast stations completely unencrypted. These stations are known as “basic cable” by the public, and are accessed without the need of a set-top box. Basic cable has been used in households that have multiple televisions and do not want to pay an additional $5 to $15 for each set-top box.

Cable companies are stating that costs will go down by eliminating the basic cable option, with the ability to remotely service digital boxes rather than sending out support to the home directly. However, this would put customers in the position of having to pay the extra money each month for a cable box, and it would also allow the cable companies to have full control over access to these stations, allowing them to charge licensing fees to any alternative company that offers a separate interface to watch television on, such as Boxee. 

Boxee (News - Alert) representatives that flew to Washington D.C. to discuss the issue with the FCC believe changing the rule would be a very poor decision. Besides the obvious fact that Boxee would have to pay licensing fees to the cable companies, its representatives also argued that reversing the original decision would eliminate all existing computer TV systems currently in American households and it would put low income families that already have problems paying for television at an even greater disadvantage. Another interesting point made was that by adding extra television boxes into households, it could drastically increase power consumption, consequently raising utility prices as well.

Over the last few years, cable companies have been feeling the heat from newer, cheaper alternatives like Verizon FIOS and Boxee that offer affordable substitutes. Verizon’s (News - Alert) alternative offers a cheaper substitute by bundling Internet access, telephone and television over a single fiber-optic communications network, creating a more affordable option that connects a household to all three.

As these newer alternatives are becoming more popular, it is no surprise cable companies are trying to fight back. Channel availability and variety are still better on cable boxes but if you cannot afford it, features from companies like Boxee are quickly catching up. For example, Boxee’s newest feature, SlingPlayer, is giving its users access it never had before.

"The addition of SlingPlayer greatly expands the content and capabilities of the Boxee Box by D-Link (News - Alert) and brings today's connected home to yet another level, Missing your favorite show or game is a thing of the past. With SlingPlayer, people can easily enjoy and access their TV content with the ultimate convenience, from changing the channel to controlling the DVR," reads a message on the company site.

With changes like this, it is no wonder that cable is trying to prevent these new alternatives from reaching legitimacy. By offering a cheaper, more interactive way to view television programs and other types of media from your TV set, cable television is becoming outdated. Although they have tried to adapt and by offering grand subscription packages, phone and Internet services, the increased prices with these add-ons aren’t pulling in lost users, they are scaring away current ones. If the FCC decides to rule against the cable companies lobbying the change, the in home entertainment industry may be drastically changing in the next few years and for consumers strapped for cash it may be for the better.

A recent graduate from the University of Oregon, Nick aspires to build a career in the digital world with a focus on technology, sports, and online media.

Edited by Rich Steeves

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