Boxee clashes with cable companies over encryption

Boxee’s live TV dongle has only been available for a few weeks, but the company is already embroiled in a fight with cable giants like Comcast (s CMCSK) and Time Warner Cable over it, and it is now getting support from groups like Public Knowledge and the Consumer Electronics Association.

At the core of the issue is whether cable companies should be allowed to encrypt their basic cable programming, something that existing regulation doesn’t allow. Unencrypted signals can be used by tuners built into most modern TV sets as well as equipment like Boxee’s live TV tuner to access these basic cable channels straight from the coax cable that comes out of your wall, without the need for any set-top box.

Cable companies have asked the FCC for waivers to these restrictions, arguing that encrypted channels would reduce piracy and that encrypted cable connections can be remotely serviced, eliminating the need for many service visits. The FCC is currently hearing all sides of the issue as it contemplates whether to do away with the restrictions and allow all cable companies to encrypt basic cable. Boxee has filed multiple letters with the commission and met with its staff last week.

On Wednesday, the startup wrote on its blog:

“[The cable companies’] real motivation is to prevent you from being able to connect the cable from the wall directly to your TV or Boxee Box. You will need to rent a set-top box from your cable provider, pay an extra $5–$15 per month and it will no longer work with your Boxee Box or similar devices. The cable companies are losing subscribers every quarter. If they want to reverse that trend they should look into building better products, reducing prices and improving customer service, not going to the government asking for rule changes to force consumers into spending more money and blocking start-ups from competing.”

Boxee’s position has been shared by Public Knowledge as well as the Consumer Electronics Association and consumer electronics manufacturers like Hauppauge, which makes the Boxee dongle. The cable companies, on the other hand, have been getting support from the Motion Picture Association of America (MPAA) as well as some municipalities, including Miami.

Altogether, more than 80 documents have been filed with the FCC on the issue. Many of these filings from both sides make it clear that this is about not only what is going to happen to those basic cable channels but also the role that consumer electronics manufacturers, cable companies and startups like Boxee will play in the future of pay TV.

Consumer electronics makers have long favored a new standard called AllVid that would provide a new interface among traditional pay-TV services, online competition and connected devices. Cable companies opposed the standard; Boxee, on the other hand, came out in favor of AllVid in the presentation to the FCC last week, stating on one of its slides that “AllVid holds exciting potential for development of new consumer devices delivering integrated entertainment experiences.”

Check out our video review below to see how Boxee’s live TV tuner works:

Image courtesy of Flickr user familymwr