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Comcast makes up with Boxee after cable encryption spat

Cable TV + internet boxes sector keeps swelling

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The proliferation of third-party aggregation devices to combine cable TV with internet content in the home is set to continue in the US following a landmark deal between Comcast and Boxee.

This is significant because Comcast is the largest US multi-system operator – with 22.5 million pay TV customers – while Boxee is the most prominent supplier of third-party devices that can access cable TV content directly – so long as it is unencrypted, as is the case for some local and basic channels.

Such boxes are sometimes referred to as Clear QAM devices, and have exploited the fact that US MSOs have been obliged to deliver some mandatory "must carry" basic channels in the clear so that they can be picked up without needing a set top box. But recently the US cable industry has been lobbying the FCC to change the rule so that they can encrypt QAM and shut down this whole bypass mechanism, which would lock out a large numbers of TVs. This also threatens this burgeoning business in IP-connected third-party devices that bring together basic cable and internet TV. Cable TV makers have wanted to cut down on this trend because it threatened their own OTT and hybrid strategies, and have also argued full encryption is needed to combat piracy, and facilitate remote service turn off to reduce support costs.

But Boxee has taken the fight to them, and has now reached a two-part agreement. The first part involves a temporary solution comprising hardware connected to the Boxee box via an Ethernet port, to decrypt the signals. This enables the MSOs to encrypt all content, while Boxee users can get access to it. But it is an untidy solution involving an extra device and more wires, so the second part of the agreement entails development in the longer term of software based decryption for incorporation in future Boxee devices. Although this agreement, subject to FCC approval, is just between Boxee and Comcast, it will set a precedent for the rest of the US cable industry and other makers of these IP-capable Clear QAM boxes.

Copyright © 2012, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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