The FCC has finally granted cable operators permission to encrypt their very basic cable programming. This freedom granted after lengthy reviews might be what technology needed to do away with the confinement of having to plug a TV into the wall to get cable TV services.

However, the commission still has in place some stringent policies that will help prevent cutting off the public from their TVs and opening the door for third-party set-top boxes. In order for the six largest US cable providers to go through this breakthrough in the cable industry, they will have no option but to meet a number of requirements.

First, the companies will have to provide viable software and/or hardware solutions to enable their customers access their services in a hassle free manner. This might simplify to issuance of network-connected converter boxes compatible with the encrypted signal free of charge in the first two years to skipping the hardware solutions and opting for software upgrades that will use existing hardware with the desired effect.

According to FCC (News - Alert) standards, the cable TV providers that opt to keep their distance from hardware upgrades will have to produce software-based solutions for third-party IP components licensed under a “good faith” requirement. This leaves cable providers with the option to name their fee. Ridiculously high prices though might draw regulators’ attention.

Smaller providers like Bright House, however, are exempt from these conditions. The FCC feels that their impact in the market cannot fully compete with that of full-fledged providers in embracing IP functionality. The leeway has, however, been left open to consideration in case the initial assumptions prove to be wrong.

The response from both cable operators and Boxee (third IP solution providers) seems to be quite positive and encouraging. NCTA (News - Alert) terms the move as one that will hasten the pace in which the industry morphs into a digital framework hence shielding providers from the constant liability accrued from cable theft.

On the other hand, Boxee (News - Alert) expressed its willingness to collaborate with third service providers to deliver to customers next-generation services to drive the industry forward. Though these highly expectative opinions still stand to test by market forces, many still cling to the uncertainty in how well consumer demand will embrace this new transition. Even FCC said that the viability of the rules will depend on how consumers embrace the innovation.