New FCC Rules Could Spell an End to Cable TV Boxes

WASHINGTON — Within three years, TV viewers may be able to dump cable boxes and replace them with specially equipped televisions and video recorders, if government rules to be proposed today are adopted.

The Federal Communications Commission’s proposals would require that cable boxes be replaced by small, paperback book-sized cartridges that snap into newly designed television sets and videocassette recorders.

Cable boxes are necessary to unscramble pictures in some systems and for people who lack cable-compatible TVs and VCRs in others.

“We want this to go,” Alan Stillwell, the FCC economist who drafted the proposed rules, said Tuesday. “These sets will probably be on the market some time in 1996.”

The National Cable Television Assn. and the electronics industry have signed off on the rules, which would solve problems created by cable boxes and create a market for the new TVs and VCRs.

But consumer advocates have some doubts about the proposals, concerned that cable customers may foot the bill. The FCC will vote whether to adopt the rules, which are required under the 1992 cable consumer law, on April 3, 1994.

Current boxes get only one signal at a time and cannot be controlled by the TV tuner. That frustrates viewers who want to watch one station while recording another, or set their VCR to record future programs on a variety of channels.

The new cartridge would abolish those problems, allowing customers to tune a channel directly from a newly designed TV or VCR.

It would also come as a boon to the consumer electronics industry, which would get a shot in the arm by producing tens of millions of the new-generation TVs and VCRs that accept the cable cartridge.

Stillwell calls the upgrade minor and says it would cost the manufacturers only $5 or $6 a set, though other estimates are higher.

The FCC proposal would abolish the separate charge for cable boxes but permit cable companies to build cartridge rental into their monthly charges.

Cable companies now make money by charging as much as $4 a month for boxes that cost only $100 to $150 to buy.

The Consumers Federation of America wants to get cable companies out of the equipment business. It says that should be left to TV and VCR manufacturers.

“It simply makes competition impossible,” said Brad Stillman of the federation. “Consumers will be held hostage to whatever cable companies want to charge and won’t even know how much they’re being charged.”

Because of problems tracking cable accounting, the FCC acknowledges that it doesn’t really know how much money the companies make on the boxes.

The cartridge--or a cable box--will be necessary to receive everything except basic channels, which the FCC prohibits cable companies from scrambling.

The FCC’s Stillwell said that as the commission establishes national standards for cable systems over the next few years, the law requires opening them to competition as much as possible.

That would mean that most of the electronic muscle should be in the TVs and VCRs, with only a basic code in the cartridge.

The law, Stillwell said, is aimed at moving the cable industry in the direction of the phone industry, where consumers may own phones instead of renting them.

But the cable industry is going to fight for the right to rent out cartridges.

Wendall Bailey, vice president for science and technology at the National Cable Television Assn., contends that if too much electronics is in the TV, the system could be beaten by people intent on cheating.

“How does the cable industry recover if that happens?” he asked. “That’s been a problem of every security system produced on a commercial level.”

He said the industry should retain the right to update its cartridge if someone figures out how to beat it.