• r------~ablee------Cablevision rounds up pirates Calls it company's largest-ever antitheft campaign By Joe Schlosser signal illegally tuned in to "We don't like having to watch a movie on a premium be the cable police, but we ablevision Systems Corp. of channel. all they gm was snow." New York City is shooting says Hamill of Cablevision's do want to get our people Cdown cable pirates in a roundup first attempt to slow down the signed up legally. " it calls "the largest electronic antitheft piracy. initiative ever." The direct result. Cablevision Through the use of an electronic says. was a 17% increase in the -John Hamill, Cablevision of New bUllet. Cablevision is sending out upgrading of premium services York CIty's manager of public affairs enhanced signals that "zap out" ser by its Bronx customers. A vice in all households and businesses month ago. after a similar firing that are receiving the service illegally. in Brooklyn. the increase in upgrades "The results of the earl y firings "We don't like having to be the was estimated at a minimum 35%. showed us that we could increase our cable police. but we do want to get our Cablevision advenised its first fir revenue tremendously. so now we are people signed up legally." says John ings well in advance on its cable going after all of them." Hamill says. Hamill. Cablevision of New York access channels. But now. the compa "We have the capacity to shoot the City's manager of public affairs. "This ny is going all-out: no more advance bullet out every day. and we just might is costing us millions each and every warnings. do that" - year." Cablevision. which serves 450.000 customers throughout the Bronx and j Brooklyn. estimates that it is losing nearly 25% of its yearly revenue to signal theft. The National Cable Tele vision Association puts the industry loss at more than $4.7 billion a year. Cablevision says it will criminally prosecute those who have been selling illegal boxes. As for those who have been receiving the signal illegally and now want to pay for the service. Cablevision has plans for them as well. "It's not going to be like 'tum your self in and all is well.·.. says Hamill. "There is not going to be any amnesty. We Want people who have been steal ing the signal. to be legal subscribers. But it is not going to be like all has been forgotten. There are going to be some payments made." Cablevision. is just the lastest opera tor to fire a salvo at the pirates. Time Warner Cable of New York City has also employed the technology. "We did it about four years ago. and we successfully prosecuted about 200 people." says Barry Rosenblum. presi dent of Time Wamer Cable of New York City. "When we do this. we receive thousands of phone calls from people claiming to have service prob lems. When we ask their names, they hang up." Four months ago, Cablevision took aim at piracy in the Bronx. with premi· urn channels such as Home Box Office and Cinemax the primary targets. 04- -e "When people who were gelling our 'Bn o..-d c. '-'-<,,-f \ f1!J C!Lh i FePy-wv"1 17, I q ~ 7 LOS ANGELES nMES The company pianO' to pursue cn'll actIOn agamst the most senous offenders, m addltlon to pressmg law enforcement to assess the maxImum S1.000 misdemeanor flne for rere1\'mg the 111e~al eqUIpment. the spokesman said Five Arrested in Cnder state law. a person ad,'erusmg four or morp illegal ron"ener boxes for sale or pos' Raids on Alleged ~essmg mne or more Illegal can, \'ener boxes for eventual sale faces up to one year In Jd!l. a 'Cable TV Theft Ring S25.000 fme or both. Contmental spends $1 million a vear for 18 securltv officers to • Crime: Three men taken mto custodv combat illegal cable use, which Deputies seize at the Erwm Street locatIon were costs the company tens of millions hundreds of converter handcuffed and seated on the of dollars annually. ground agamst a late-model Mer, . "The money lost through thIS boxes and thousands of cedes convertible that authontles aCtiVIty IS a cost l,hat generally buyers' names at six San suspect was purchased WIth prof' gets passed on to the legltlma tP ItS from the operation. customer," Parks scud. Fernando Valley sites. A nearby van filled WIth cases "We're dmng thiS to take a of converter boxes was confis tough stance on people orgamzmg By JOHN M. GONZALES cated bY authorities. who were thiS theft. But we' also want to TI \lES SfAFF WRITER trymg to determme where they send a message to the end user came from. that he is doing something that's henff'S deputies Thursday The investigatIon will contmue against the law," broke up an alleged cable to determme if the nng stretches Parks saId most cable compa Stelevision theft rmg operat to other locations m other states, meso including Continental. will mg at six San Fernando Valley "There may be some l police] offer amnesty to people caught locations. arresting five people knocking on doors nationwide." " receivmg illegal cable If they and seizing hundreds of com'erter Hiles said. boxes and other equipment. Two other men were taken into purchase a subscription package. Forty flak -Jacketed sheriff's deputies raIded storage facilities custody at the other locations. Nevertheless. about 250.000 to and small stores In Reseda. The identities of those arrested 500.000 people use illegal decoder Northridge and Van Nuys after a were not immediately available. boxes m Los Angeles and Orange sIX-month Joint survelllance wIth .The other sites raided were a counties. according to industrv security personnel from Conti residence in the 6300 block of estimates, . nental Cablevision. the largest Langdon Avenue. In and Out Ste The National Cable TeleVision cable provider in Los Angeles. reo in the 14300 block of Victory Assn, 's office of signal theft estI During the searches. deputies Boulevard. and a residence In the mates that the cable black mar also recovered the names of 5600 block of Murietta Avenue. all ket cheats the U,S, cable mdustry thousands of purchasers of the In Van Nuys. out of $4.7 billion annually. . illegal cable com·erters. whIch Deputies also searched a resI And because most cable fran authorities sav were advertised In dence in the 9500 block of Rhea chises. like Continental. pay a several electr'onics magazmes and Avenue in Northridge and J and percentage of their revenue to sold through the mail. Ks Electronics in the 7200 block the cities they serve. mumcipalJ "These {illegal operators] keep of Geyser Avenue in Reseda, The ties are losmg millions from their close records on their customers," illegal gear had yet to be cata coffers, said Deputy Guy Hiles. who led loged, but deputies said they Thursday's raids come five recovered hundreds of cases of months after charges were the raIds. "In mv estimatIOn this is eqUipment, most appearing to be brought against nine people a multimillion -dollar operation." illegal converter boxes. known as belJeved to be involved in the About a dozen depUties WIth "black boxes." nation's largest cable teleVision search warrants stormed the hub "Black boxes" are modified piracy scam-allegedlY bilking of the operatIOn. a large storage converter deVices used to receive ':able compames and taxpayers and office facility in the 15500 encoded teleVision signals. Gen out of hundreds of millions of block of ErWin Street In Yan erally sold for about $150. they dollars. :\uvs. Officers shattered an office allow viewers to see cable and wlIldow to reach suspects who pay-per-view events for free. That alleged scheme included they belie\'ed were destroymg Perry C, Parks. a VIce preSident the theft of more than 16.000 e\'ldence. of public affairs for Contmental ;able converter boxes, mcludmg Though the nngleaders were CableYISlon. said there would be ",.500 stolen from a Los Angeles not ex-pected to be armed, depu further InvestlgatlOn. mcluding Pohce Department endence room In July 1994. Uf'O wore tactical gear because lookmg into the names of cus ~om€" of the lIlegal eqUIpment was tomers who purchased the boxes. bf'lie,'ed to be purchased from 3u~pects In an Ontano armed robbery.
: .-.-" ..... AMERICAN·STATES~.4.~N fEB 1 S 1~ confe~s Cable.; rustlers'·can, -' --.... to gain TV '''-, ",r !atnnesty: .. I
, . .•After March 20, Time W~nersays it will crack ~wn on cable theftS " NEW YORK DAILY NEWS WEDNESDAY FEBRUARY 12, 1997 Bootleg cable getting boxed !r_U.FUBLL use of iIIelarboxes. '. the ante to include all pro- the system Include UBO, D8Ily NllWI StlllfWr*r "Eve;' channel In Cablevl- ' graming. Clnemn. ~howtlmt:. The If you. want your MTV In slon s'ervice levell, from "After we zapped out pre Movie Channel, MSG and Pay Brooklyn and the Bronx, you Family Service to Optimum mlum service In the Bronx Per View Channels. better make sure you're pay Preferred. will be subject to several months ago, we had a "We are putting thieves on Ing for It. the zapplDl," .ald John Me 1711. Increase In the number notice that the party is over," Starting thll mominc, Cab Elhinney, a Cablevlsion ofcustomers upgrading their said Me Elhlnney. levislon or New York City spokesman. " premium channel services," will begin nriDl a "double He .ald the enhanced .11- Me Elhinney said. . While there are no precise barreled electronic bullet" nal bullet, whlc:h will be In Brooklyn, where premi numbers on how widespread , to zap out illegal eabl~ boxes. nred throughout the day, c:aft . mum service was zapped last rable theft Is In New York a compall)' omcli] sa d. be decoded only tbrouCh le- month, requests for preml· City, cable security experts c,bleyiljo~ ie"~ 450,000 cal, coloPalii boxes. ,lIIelal mum uPlrldes rose more estimate it's as high as 25% diS olDer. f roughoutthe bOKes will be rendered use- than 30%. nationwide. Industry esti Bronx and In' two-third. or less. "We had so many requests mates put the costs of signal Brooklyn.. Previous efforts to zap out for upcrades, we're stili go theft in the billions ofdoUlrs . COinpany omelals said the boxes steallnl premium Ing over the numbers," said a each year. electronic assault is its lal'l~ service proved so successl\JI Cablevlsion Insider. "This is not a victimless est single effort to end the that the nrm decided to up Premimum channels on crime," Mc IIhinney said. ,
Piracy Suspects Plead Guilty
F:WAKK. X.J. - Five ot nloe principals an " N major set-top-plracv nnll; have pleaded !Nlltv an a :-;ew Jersey federal court to multiple felomes. The defendants were an thcted an June an the larll;est l!ovemment action ever taken "Ilalnst distnbutors of altered ,et-tops. Investurators beheve that the nmr mav have laun·
'FtJo,.~ 3 I Iqq::r IJ tAJJi &.o.w1.. Trevor Wanel Georgia Nashville on Drivers ~..... to TUesday. •• _...... 4 1 ...... -" back-office empll -ersge of $1.90 : cOmpeted on how wen they could drlve their based Investmen N1.~.. ' 4t-loot vebleles through a serpentine course, Investor Services Jonald's hopes : · paraDeJ park. negotiate a double Une of ten dered to pay ba 'sandwiches In nis' balls and other precision skDIs. five-tJme he still owes the ebamplOl1 Itb' the hlgber- '. I t · Internado.... Sooth won the com U.S. District side order. petltloD, wldcb' bas beea In NashvtUe for Sebelndlin said II ~ugh 19 the .margl.n about six yean. Judges came from ed solely by gt I they make It .out the COUDIly for the evenL Smith and the need" wb.en be , and fries," h~ second-place driver will return here later with an elaborate · this year ifer the international eompetltfon. uDauthorized mo, i5" special-I' r.rt.· . ,:' .... -'...... "_'J_:l,~.'._i-.iJ.,:;;·;;"~.".I,~,~.,,;,,toJII.__II,~_.~,:.•,III,•• I.,I;.-:.:j.<-.(.:'"'~_:: ...11 . i ;,:". : i - bank fraud to \'I the chain was SIniIh drtm h.. bullhrough. lane 01 tenniI bah. .,". . '." ,. i , i·'. guilty occurred e fromegtb BI . .'....., .. . '.. ! .'"..• 1994 and last Auf . . , L ~, , arrested and If[ :b=:~V:; -.'! '. ': . ';.' > Ii. .', ': 1 ;' 7:: • turning over asse :~~:.::;JnterM;~a·.iShll~}!!oft\ ql~l~.:pJra!es Ameritech Ie .. WASHINGTO~ orpor8le exec-, I' . ,.\ ft r .,. 'r-tI ' out tbat ber two grandcblldren, ag- forced to suspend ::r.~:.u:esU1~<57 f~~~:fP.~ Y:.la~~ts.', ',: .. '~ .. :.::~.;::~~:~~ad~~~~the vide long-distance of them can customers, bI ~~~r.r', in Oak· . BJ CATHERINE TREVlSON ~'. ".~_ 'tt's notvery fair to them to look ; seodlng out an e~tronlet st~ i The company W~Slft deterred. application next n ". ' Staff Wri'K .' .. ,. ':' Ule other way," said Paul Janson, that teUs them wbats ~pp~girl I "She settled.. SIle bad tapa)' the :~\ co~y's decOder;:~aIlson ny's cbalrman sal denied a Wall I Nasbvllle's cable company sayS the regional marketlDg "eaCh customer's ; $850," Janson saId.' ;.. "!.'" • The. Chlcago-I t Ibnt ~m· U's sick and tired of cable: freeload· . 'manager. .' • said. ' " ,!' ,U's expensive .to, Send out the Withdrew Its app '11; orders With:-' en aild It's going aner them with .' "Any busineSS has to roU all .of " When the comPajtY ~ send- anU-theft signal; 56 .llie ' ~Onipany I~ just days after fc ng them or get lawyers. ' tllelr cost! toto wbat t1ley cbarEe 'IDg the anU-theft SlkDatlast fall, doesn't do it aU the time, Janson rejected a key 0 ~ special sando. lnterMedia Partners Southe~ Is consumers. Tbls Is a way to pay ~ foand 1,300 pirates,'Janson said. so said. However, It plans to send the request Ameritec: Y ClStthunlVersall suing 57 television viewers for up ,our legal, paying ~mers back." tar, about two-tblrds have settled signal every so often and to keep Intentions to remt r e industry to $10,000 earn in U.~ District The company accused the sued the dispute by paying $~50 each. t~ prosecuting theft, he said. In January, A[1 unch and din- Court. accusing them of pirating. viewers of paying for baslc cable, Intenned1a, he said; ; :, "Will we do It numerous times the first - and sti , movie channels and pay-per-view but tben sDagging extra movie The company is tough.: during the year? Yes. We're not of the nation's loe ndy 5 and Bur- programs. channels and pay-per-view pro-, One grandmother swore she foolish enough to think if we do It companies to file "There are 152,000 customers In grams with lUega! decoders. hadn't pirated cable, and Janson once It will eradicate theft:' be wit1l the Federal Coltimn 3 Nashville thai pay us for service. Cable rompanJes cateb theft by believed she was honest It turned said. • I .._ ; Commission. •
ER , TELECOMMUNICATIONS AGENDA MARKETS , . " was n>cently rocog- Lei Intematlonill Inc., one 01 I~Rilqtl".I!II.Q~1 i "T~lnlng Group FacIIltatlon Meth- Stocks fell sharply : Eng- the naUon's largest provlder.s or long-- i?.Pij1c;:";M~1rl1L~f,«tI!:llMt! I odS," 'with ll% Allen Fey and Debra bonds sUd, sending In 'n&Jr'N''! dfstance telephone service, said yesterday . I Grimes, Management Solution Group, to- terest rates soaring, af e o. It has reached an agreement with Bell- SECTION EDITORS day and tomorrow. Super 8 Motet, 350 ter another warnIng by la!Jon South Corp. to resell I~ service In Ten- Harding Place. Fee: $350. For more Infor- Federal Reserve chair 11: bf nessee and elsewhere In Be!lSOUth's nine- malton. can 320-0039. man Alan Greenspan Insur- state region. LCI, which Yt:t bUy space on Cand, McCampbell, Per&K1a1 Finance that the market's me lblich the BelISouth network at a discounted Editor, 259-8078. "Flnandal Management Wort< teoric rise poses an In Iness rate for resale under ItS oWn brand name, Fax: 259-8093. shop," a two-part workShop presented by flationary risk. Broad ~l- said residential customers will be able to For InformaUon or questions, call Mon Steve BRott & Associates, 6:30 p.m. TlleS* market measures also .took ~ Ten- sign up for lCi service later this year, LCI day through Fr1day, 9 am. to 5 p.rri. day and Wednesday, Vanderbilt Unlversi lng the sessJon. The BIoomI The joins 8 handful of others that have applied ty ClUb, Nashvllle. No fee. Reserve at see Index was 167.98. doWl HUBSUCH to offer local service In Tenneroee. 385-0986. and tables on 2&3E. -..t. -~ 1: ~ ~ -1- i fQo~ II 1l11rt~~ttvll\ \\Jqlq7 Inter~ediasues club over ball game By MICHAEL DAVIS . order pay-per-view events with- I Staff Wr;(rr out going through local cable Nashville's cable-television providers. ~ompany has thrown a nag for 1nterMedia had priced the Illegal use o.f the. ~able box event at $24.95 for residential agamst a MadISon billiard hall. viewers and $200 for cammer- InterMedia is suing J.O.B. Bil· cial establishments. Blaylock liards Club on South Gallatin would not say what he paid for Road, alleging that. the b~in~ the game, but suggest d that the showed a pay-per-VIew UOlversl- company was just trymg7 to har ty of Tennessee football game rass him. last August without paying for il "You can get sued for any- The suit, filed in U.S. District thing, for spitting on the side Court in Nashville, asks for walk," he said. $110,000 in. ~tatutory..damages stewart said the suit is part of and unspeclhed pumtive dam- 1 terMedia's increased efforts to ages. I. Cr:aCk down on cable violators. In J .O.B. own~r Jim Blaylock tn- November, the company sent let- sists that he did purchase the UT ters to almost 1,000 local custom- vs. University of Nevada at Las ers citing them for tampering Vegas matchup, and has docu- with their cable boxes and ask- mentation to prove il ing for $850 in settlements and "1 have satellite and cable, fees. and 1 bOUght itoH the satellite," The company received a "sig- Blaylock said. "They a.~ume 1 fl.if!'::ant prcpcrtior." of respomes got it off their box. I have all my to the letters, according to Stew- proof right here." art. InterMedia spokesman Bruce InterMedia estimates that ca- Stewart declined to comment on ble theft cost Tennessee provid- Blaylock's defense. But owners ers more than $14 million last of satellite-television systems can year.• NEW YORK DAIl.Y NEWS SUNDAY JANUARY 19, 1997 Outboxed, Johnnie Cable's in afix N TUESDAY, the search for rlzatio~ And then calls into Johnnie Cables." Johnnie 9ables from Brooklyn code and se- the mad, pan The cali-wailing beep sounded and Obegan. curIty icked, fren Kenny switched over to a guy named Johnnie Cables Is one ofthe biggest b I 0 c kson lied search Lenny, who, between alcoholit re distributors in South Brooklyn of boo the prem 1 DENIS for Johnnie habs, de-lees planes at JFK. "Yo, the gus cable boxes, those black-market u m c han Cables began porno channel is out, Kenny," Lenny devices that steal the signal from the nels are by- HAMILL In Brooklyn. said. "[ can't live without my babes. .n..£.able s~tem and deliver premi· passed by a My friend Plus, tonight, no Playboy channel. urn c1iannes, pay-per·view movies, spec lal Kenny has You said • had a one-year warran concerts and sporting events for free compute r had four bo tee." Into the homes of25% ofall cable cus- chip. gus boxes In his house for the last "lIey," Kenny said. "Warranties don't cover your libido. Go out and tamers.Johnnie Cables, and hundreds of ".magIne if a car deaIer was run· three years - one In the living room, one in his bedroom,one in each ofhis meet a live woman." others like him, sell these boxes for nlng a showroom wh~re ~ne out of ~v NOTHER CALL·WAITING $300. and give customers a one-year ery rou~ cars was bemg rlp~ed ofT, a kids' bedrooms. "This way, when my beep brought Kenny's father on guarantee. For the last three years. ~abl~vlsion spokesman s~ld to me. daughter wants to watch The Disney the line, growling that he M,OQ~leYiSisHl_ somelhJn~ ~ Channel, she can go to her room," he A approximately You d have tO,do stop couldn't get MSG Network. ". got subscribers in Brooklyn ave been It. We shot a magic bullet m the says. "My son cango watch a ballgame money on tonight's game," he said. sittlnr back watching cable movies, Bronx a few months ago, and pur In his room. And I can walch a movie Kenny hung up and tried Johnnie Mike Tyson nghb....Jl.lW, §bowtime chases of premium services went up In the living room." . Cables for the fifth time in three Kenny had been the oogus-oox mid 1tJQemu. The Disney Channel and by 17% the next weell" hours. No answer. No machine. Later T e Movie Channel for free. And so on Tuesday, Cablevision dleman between Johnnie Cables and in the evening, Kenny wenl to the cor· Ifow it works Is: you order a Cab- shot a "magic bullet" through Its all of his brothers and sisters and ner saloon, where most ofthe patrons levision package for a price ofabout Brooklyn system, a highly sophlstical f'Hends in the neighborhood. So as were Johnnie Cables' customers. $30 a month. They wire your house ed, scrambled signal that rendered soon as the Cablevlsion magic bullet "Anybody see Jphnnie Cables?" and give you a box on which you get useless all the bogus boxes thatJohn ricocheted like a dum-dum through Kenny asked. all but pay-per-view channels and an nle Cables bad sold by the thousands. the lareenous heart of Brooklyn on "I bet he's home with the phone un authorization button to select movies All of a sudden, the living rooms Tuesday, Kenny's phone began to jan plugged watching TV," said the bar· or sporting events. tryou want a pre- and bedrooms of Brooklyn went into &Ie olTthe hook. tender. "He's no fool. He got the new mium-cbannel package, you must chaos. When TV cable :lddicts tuned "What am [ supposed to do with my bogus satellite disb that takes aU sig subscribe by the month at an addi- In, they got nothing but snow on the kids wltbout the Disney Channel?" nals from outta space. lie started tional east ofbetween $20 and $30. screen and the loud white noise not one brother asked. hawkln' them last month. Musla got However, when theCl'blevislon box unlike that used in totalitarian gov "Ever think of reading them a an inside wire thalthe magic hullet is replaced by a bogus one, the autho- emment interrogation fooms. book?" Kenny asked. "I have four was coming." '90s Problem: Cable Piracy on the Web
By LINDA BAUGSTED Web 8itell on the Internet, pbms for the CODBtruction of a IOCiation'. signal-theft eom se1len ill unclear. pceted byhardware pirateB.aDd Mlt-top "for 1_ than the cost mittee will diIc:uM creatiDg a ~f. clear (that) the tecImol he ads say; "We buy rabIe they are proliferating madly. ofone aigbf8 pay-per-view!" to Web site of ita own to counter ogy baa outpeced regulati.cm: aet-tope. New. uaed aDd Cable security esperts esti ma,jor wholeealers long !mown lOme of the piratel' c:laima aaid Jim Allen of the NCTN6 Tfield pul1s." mated that there are 1,700 to to the induatry. and to remind people that ca 0fIiee ofSignal Theft. Butthis iBn'ta c:IalIlIified adin 2,200 8uch sitell on the Web, If. gotten 10 bad that at ble theft ill illegal. Manufacturen have bad the beck of this paper or other from mom-and-pop opera this week'. WC!lItern Show. the But other thaD that, the re luck in ClIJUJ't proaecutiDg pub lnIde papertl. n- are ads on tiODS, offering do-it-yoUJ'8elf National Cable Television A&- COI1I'III! of legitimate hardware lic:ationa like NIIU and VolU for publiahiDg piratel' adf that eontaiD eopyrighted tnIde _ like Jenvld or Geaera1 .lnltnament. But GIl theWeb, who ill the publiaber? It'.an Waue 10perpJatagthat in~ partiea met ill SwiturJand 1ut week just til becin to define lOme of ~ capyrilbtiuuN. Atiempta in the U.s. to reg ulate content, aucb .. the fed eral initiative epinat JlCII'IllI£ raphy on the Internet, hav~ The NCTA may create its own Web site to counter piracy.
.ur-iy '-n cballeupd. Be .c:arit1 a:pertB predid.ed that DO cable operator will be will ingto launch a potent.ially g pensive Fint Amendment cue on Internet content w atop the piratel. So far. investipton attack Web pirateI the lIlIDle time ClIlIII8UIDing way that they bet tie print .n-tiaerB - by ~ ing~ '!be intenuItioIuIl ~ of tt.e Jl8IIllI ill cauaiDg the JIID8t c:mr.em til VIlDdora.. CuB ~ in other _tries with ClIJIlt.rolIed IIIlldia haft nota.n tt.e ada betiJre, DOted Stan Dun!y, director ofsecurity ~ llJ'lIIIIII for General Instrument Corp. "We haft DO proof(tbat) the) are ezporting this stuB: But it you're a CWItomer oCm inAlia. you're sittingfar away from the office of JWI' v8Ddor aDd you _ an the 'Net tt.e colorful, !M"4I!!!ti!!IM weII-produced ad6 with our name ... it cauaee them great aDlllI'1l: be said. Many ada atate,"Stop paying bich <:able rates," even though lOme carry di8dailNlJ'll telling the buyer to register the equipmeat with operators. One home page feature8 a lICI'llIlD.-eized akull-and-eross boaee and a maniacal laugh worthyofBlum-nL Aaothermanufacturer pooh pooba the whole IlDDllePt of a bullet.~t would be foolish for a cable operator to aend out 80IIlfltbiDg which banns TVa andVeRa,- the .ller ltates. Security upertII are eon cr:rDed that the demographica and im~nature of the Web may caUlle an uptick in il lepl aet-top aalee... ------~~---~-:-fCi-Cit£j------R.I. Op's Message Bags 175 'Black Boxes'
By LINDA HAUGSTED titaDa. a meBsage was dis The viewen were warned to syltem manager Mike Davis. into the building. Davis said plByed on the Icreen for all in turn in their black boxes to The number could have a few people called to ac ome viewers in Warren, the home to Bee: "On Nov. 9, their cable provider. indepen been higher. but the story of knowledge po_euion of pi Barrington and Bristol, electronic lecurity detected dent Full Channel Cable, by the cable counterattack W88 rate hardware. but they did SR.I., got a programming an illegal decoding device at 7:30 p.m., or face proeecution. the biggut thing going that n't want to come to the cable surprise when they tuned in this addreBs." More than 175 people in weekend. Local TV trucks office ifthey were going to be the Mike Tylon-Evander Viewers then heard the the 12,600-lubBcriber system were parked outaide the sys photographed. The &y8tem let Holyfield bout Nov. 9. theme to Cop. and 88W video have turned in one or more tem's offices to catch I..·~e amnelty deadline alide Inatead of the clash of the ofpolice approaching a hOUle. unauthorized decoden, laid scomaws 88 they skulked for two more days, he said. The campaign generated no complainta from autho rized c:u&tomen; the system is a 100 percent mapped ad dreuable Iyltem and, by us-
Local TV trucks parked outside the system discouraged some from turning in illegal boxes.
ing a combination of tech nologies, Full Channel delivered ita meuage only to the target group. Because of the mapping, the &y8tem can continue to send the "unau thmUed device" message, pr0 gramming it to pop up on dif ferent channels, to any home that didn't respond to the IUIID8Bty offer. Paying CUltomers have called the &y8tem to congratu IBte the bUBin_ on ita anti theft effort, Davis Baid. The system manager estimated thatbiB company's 88le ofpay per-view and premium unita is depreued between 10 and 20 percent by because honeBt customers are angry about paying for product that they !mow neighbors lteal. Davis thinks the black-box owners aren't really thieves; they've convinced themselves that using the converters is benign, like hooking up an ex tenaion phone. But that does n't mean he won't follow through with proeecution. In co~unction with the fight, Showtime Event Televi sion conducted an anti-theft campaign. Viewers nation wide with illegal decoders could Bee an offer for prizes if they called an 800 number and repeated the code they read on their screenB. Auto matic number-identification technology allowed operators to track. back. to the signal thieves, and Davis said he will use any recordinp from biB area 88 evidence in court proc:eedings against viewen who do not surrender their blBclr. boxes. _ Persistent Pirate Nailed with $245M Fine
By LINDA HAUGSTED ness, this time under the tion by Gl executives, Grat Young said Grattan "fla reimburse Gl for investiga name Northeast Electronics tan was arrested again in grantly disregarded" court tion and court costs. federal murthas slapped Inc., according to court docu August. Business records instruction, and the judge Stan Durey, director of se a Boston-area man, de ments. Gl tracked related showed that he had sold ruled that he had violated curity programs for Gl, saie A scribed as a BigDificant business entities to the 4,812 descramblers between the injunction 4,915 times the company is poring ove, player in pirate eet-top distrib Sarasota, Fla., area, where 1992 and July of this year. the number of boxes he had an asset list that the courl ution in the Northeast re they were doing buainess as When he was raided, there sold or had on hand. The provided to determine ho\\ gion, with a $245.7 million Halcyon Software Group, were 112 descramblers in court multiplied that amount much the company may ae fine for continuing in the and to New Hampshire. his possession, according to by $50,000 to come up with tually recover from the civi business. Following the investiga- the court order. the fine. Grattan must also judgment._ The penalty is to be paid to General Instrument· Corp., which brought the suit against the pirate. But uec utives doubt that the com pany will recover more than "single digits" of the fine, due to a bankruptcy filing and other factors. Thomas Grattan, who has done business as D&D Elec tronics Inc., is now a three time l08er. Injunctions against selling and altering set-tops were granted against Grattan and his business entities in 1987 and 1991. The latest fine, ordered by Judge William Young in U.S. Dis trict Court in Massachu setts, is for contempt of court. According to court docu ments, Grattan was enjoined after the 1991 prosecution from selling cable-descram bling equipment, which he marketed nationally under the hardware names Univer sal 5000, Universal 4000, Universal 4000-A, SSlDB, Stealth J, Timeless J, Time· less Converter, Viewstar, J. Cube, Boss ] through ]]J and the SS/I Combo. But Gl, which brought the original suit against Grat tan, continued to monitor his activities following his 1991 court date. Grattan declared bank ruptcy following his 1991 prosecution, but he appar ently obtained enough capi tal to re-establish a busi- BOSTON GLOBE NOV 1 3· 1995
Cable firm KO's illegal viewers .W'-ARREN, R.I. - While Evander Holyfield was knocking out· MIke'Tyson, Full Channel Cable was fighting back against cable thieves, The company used highOOteeh sleuth ing, to determine who bad etQ1en aD - to the pay-per-vjew 1lPt. and gav.e those with mega} di!eoder boxes UDtil toDirht to tum hm in or fa.ce prOaeeution. Viewers oaing mega}· d~er boxea to tAp into Saturday's' Tyson-Holyfield fight suddenly; 10Wld themselves·atarlng at a blank screen, then caw a meBS1l.ge telling them they had· been caught. Full ~nne1 also aired a mesaage that ap·peared only on illegal decoder bOJ'eS telling viewers to call an 800 mirnbet' and recite a code on theil' television Jeti to win a prize. Tapes 'of Q1le1'S reciting tha secret c:ode will be;used if cases (0 to court.. CAP) HOUSTON CHRONICLE OCT 111996
WamerCable offers··l·month deal to'thieves
.,DIeHANSON Houston ctvonicIe .
People who are &teaJina Ieniee .. hi·u eIOit10Combatthe tbeft,' from Warner Cable have one mootb Warner ballaUDCbecl acampaign tO~: ~ become ~ cuatAMDerl with eDCOUI8P people who are Dot pay out fear of ~ reported ~1aw mg to 'lip'uP u customers:. '. omcial&. . -rhey 'em· an without fui' of . "Cable theft II far from _ Yic:tiril proMCUtion or bact payment of leU cziII1e.lf. a ftIY seriOus prob-. ~ DO ~ uIred., The lem in our in~ said Pamela' aiDneaty pracram WiD nUl through fhome. vice at for public MoadaY, Noy. 11," Tbome uicL dairI at Wanler Cable. : '&be aJIo Slid the company is : TborDe said on TbUl'lday that piIJI to put a tum of 50 .auditors Cable thieves cost Warner about $12 iDto the fe1d wbo wDllnIpect eve!)' puDioa each year .and that loues .~~tip iD the Ierrice .rea. nationwide 'are eatimated at f4.7 .. "After'tIle IIllDeS9'period, ~pl billion. '. 'hoDIt-ups will be ~ to law .~ She. laid cable oIIlc:iall atiIUre eaIo.reemeDt a1ltbarlties,... she Aid. thatbetween 8 aDd 10 pen:ealoftbe , It II -DJepl UDder Teal law to people witbiD the c:ompazat.1Il'Vice .,.'IIS, hook up fit' maiDtaJD cable ~rea are rec.'eiviDI semees D1epIIy, aerW!eI withouf p&)IiD, for them. .' The company eatimatu the cityol LeIter' Blizzard, with tbe Hams HOUlton loses· more tbu "'000 .County. 'Diltrict AUomey's Offtce, annually in b'aIldJJse fees and tbe ,said cable theft is a Clus ·B misde state loses ..··much U '1 mWioD a meanor puniIhIbIe by a IRe of Dot -year, Thome said. more Ulan f2,OOO ar _jaU tenn of 180 : "Most people reaJize that ill any theft sitllation, 'paying customers ...If person is ae1'Viee a ItealiDg to have to subsidiie thole who are make. proal, the aiIDe becomes a stealing. The fewer tbe Dumber 01 C1us AmiIdemeInor that carries a customers wbo PlY tortbe ..mee, cme-year jail term ucla be DOt to the higher the coats are for baaest exceed ",000. customers."'nlome uMf:., GAL.TIMORE SUN OCT 0 1 1996 Telemmmnnir.ations Comcast plans crackdown on m~ rahle viewers 10,000to 15,000 homes are steallngservices in area, companysays
B71'1'D1O'l'HY J. ~ . ....1"__----
TelevlslOn II fUU of cop Ibows. And cominI too a Comcut C&blevtsloD eqUipped ret ""bear JOu Ii -QoodCoP, BadCop.- Bel!lnlltnl &odaY, Com cut WiD oster a montNong amncsti' to wbat it IQS are 10.000 to 16,000 local bOUR i "'da tbat art ateaUnc cable aerviee, Mer tba~ theY eay, tiiiY'ri cominl to ret you an4 ha~ new tec:bno1ogy \0 helpthem dott•• ..AJter uua Ja over, we're launchtna an an-out bltt15 em Uda,· lIII1d Jeye Gamble, eomcast'. area Vice preIl dentforMar:vlaDd. Comeut iQ. cable theft II a reeumn, problem, but ODe that II Inuell smaller than before ltIlUt amnelty propam in 1992. Back then, *be cornpaay I&idIt wu 101 IDe t1mwton to '10 mIJ110n a 'Tear In revenue to cable tblevea. Now. It _I the 11 un 11 about as m1l1ion to $5 miDiM. "We believe cable thievery aceount.s tor as much as 3 to .5 percent ot cable 1Ubscri\).. era," company .pokeanan David Nev1nI sakl. "Cable theft is one or thoae iuue.!. like minor Ihoptuttnr, that people Jdnd or .un prtde themaelvea on being able to pt away with. The, don't al ways look at It as a VlolaUon ofthelaw80muchaa puttlnC IOmethil\f over on the big bad cablecompany.· Comcast serves about 300,000 acoounta In Balti· more. Howard and H8lfOrd count1ea, claim1ng that It 1& jn about 85 percent of all lA2meslD - ----,------navigator BY CRAIG LEDDY Cablevision \IIC1...-r._.... -(1.11117_...... --w_ (111)117""- uickly and quietly. a number of plans are emerging that togeth 11I))1I7.acu"'" ,,-, er could amount to an unprecedented anack on one of the great - est plagues affecting the business: piracy. This summer was Q --11I))1I7.n--- marked by renewed anti-piracy effons by major MSOs. the NCfA's Office ---tJlJlm.- of Cable Signal Theft. Showtime and the Motion Picture Association of -- an- America. plus the formation of the Pay-Per-View Anti-Theft Task Force. All Qll21 JtJ.USO flIIlCGI--.....er:; B:Jf1'O'. "",e-- are taking aim at what some estimate is a S6 billion annual revenue drain. 1111\117..,' -~ The need for a major assaull has never been greater. Despite recent suc- -(1111117.-s5...... cessful raids on dealers. buying an illegal 01))117." C~_ Il_~- decoder is easier than ever. You can use the (11))117'- Internet to order black boxes or learn how to ¥rlllllClQll __ , --~- to __¥r~.....- S P descramble signals. By dialing an "800" Dum- ber. a black box dealer can determine what --lIIIIClQIlao,..... · f1 (111\117_ 1 cable system you're on and what equipment ----lIIIIClQIl.... u.r e . 011\117_ Th you need. Security expens say that technology -0.-. Cable is mounting a much-needed has advanced to the point where one box ---IJUI- assault on piracy enables users to steal cable through their VCR. --lIIIIClQIl-1ZI1l117_ CON'llNTlON __(1121117"'1 ~_ Devices to defeat signal theft. such as the famous electronic bullet. are ----.. IJIJI~ having limited effect. Digital technology promises to create a foolproof DllPU'Y_~ m1\lI7oUn..... encryption system. but some MSO security directors worry that it will just ~_eaaa-- give thieves another puzzle to solve. 161111 __ PPV task force. being coordinated through Request Television's C111l1l7-UJ1'""- 1be .-xw--=nclN_-- ...... Hugh Panero. is building a "war chest" for several worthy efforts: an on-air ASIT_-.cftllN0111" _ --=nclH _ _ --- campaign to stress that. yes. stealing PPV is a crime: (111\117_' .---- \ a bid to persuade magazines to stop running ads for ------11111-_ - CIIlC1&A'TlON lIIIIClQIl __ a~); CIIlC1&A'TlON _ black boxes (Penthouse just the establish (1\21-_
ment of a 1-800-NO-STEALS hotIine for informa AIIClQATi CIIlC1&A'TlON(lI1\_~ _
tion about theft; and a crackdown revolving around (1121--
aPPVevenL as HYI... C:ll:I) --QIlI-- These initiatives need to be weU-organized and -- ...... QIlII'-' to _~a-y \ well-funded ifcable is deliver a knockout blow. CIO_ \ Today most corporations realize they cannot treat IJUI--e-l- "" " IIU . piracy as an unavoidable cost of doing business. __oc_ 1IaI__--e-I_lftl \ These new effons requin: their full suppon. o&IOf-.e.tlI'IClNI A c.-e-MIC-.'"' ~c."""')r.._ ~... __.. .~_\lPC -'"'-
Editor ~ Charter Security Officer Charged By JOE ESTRELLA tody by the Corona Police De Charter Communications of psrtmentatthe CllIIIIpsny'S ElAl ficials in California. who insid n what's called a first. a bambra. CaIii, office neardown ers described as "being in security officer at a major town Los Angeles after authori shock" over the arrest. did not I MSO was charged with ties disoovered his JlIIl!eI' number return phone calls requesting selling cable set-top boxes IIIIlODg the am-! records ofa l0 comment. stolen from his employer's cal distributor ofillegal Bet-t0p6. However, industry execu California warehouse. Corona Det. Dale Stewart tives outside the company 'Ibdd Seiders. 40. security di said the records taken from the were less than surprised. rector for Charter CommUDica business ofJoe Downs. a local •Am I aurpriIIed?' said a veter tions in the Los Angeles area. resident who was purchasing an cabIe-industtyIIllCUrity afficial. was arrested and charged with abandoned Bet-top bcDes and re who asked for anonymity. "No." one count of poIIIIe8sion of selling them to a Tuas outfit. The executive said Seiders' stolen Jl1"OPeI'tY. indicated that Seidenmayhave arrest was indicative of the Seiders was taken into cu&- peddled up to 50 stolen boxes. fact that many MSOs don't in vest the time or the money to hire "professional" security pereonnel. "I don't think there's any bU8ineas that's 100 percent clean," said another MSa se curity official. Seiders is believed to have handled security for Charter thnJuIbout ~ California. Stewart said the cable box es that sold in California for $45 were bringing $115 in Tuas. "It's unbelievable bow much morleY thecable people are get tmgripped dIm," Stewartsaid. The Corona District Attor ney bas 30 days to decide whether to plUWUe c:bargell .,.mat Seiders - AUGUST 5. 1996. CABLE: WORLD NEWS
Time Warner Wins a Piracy Battle in New York City
By JIM BARTHOLD ter a six and one-haH-hour hearing in accumulated. which Time Warner attorneys argued He called the $l-million security ime Warner Cable of New York that M.D. Electronics was selling and bond "very unusual for a federal judge City won a major court battle last distributing so-called "pancake" de to do" and said he's "extremely confi Tweek against an alleged major pi coders that descramble signals in ex dent" the final award Time Warner re rate equipment supplier. isting cable converters; modified tra· ceives will "far exceed" that figure. , Judge David Trager of the U.S. ditional manufacturers equipment; "When I say 'far: I mean it won't be sev District Court in Brooklyn last week is and manufactured its own line of prod· en figures; it will be more than seven sued a preliminary injunction ordering ucts called Everquest with the intent figures," he added. M.D. Electronics of Omaha, Neb., to to steal service in the MSO's llDle Warner sued M.D. Electronics stop selling black box decoders any Brooklyn, Manhattan and Queens two weeks ago after a year-long signal where in the U.S. The court also froze franchise areas that count 1.1 million theft campaign that included successful the assets of M.D. Electronics' president subscribers. ly seizing decoders, other assets and Joseph Abboud and forced the company Daniel Lefkowitz, the lead trial business records, as well as obtaining to post a $l-million bond to secure a p0s counsel for Time Warner, said the injunctions and other relief from distrib sible future judgment in favor of Time MSO is confident the preliminary in· utors of illegal decoders. Warner. Whafs more. the court ordered junction will be made permanent in Lefkowitz said M.D. Electronics is "a M.D. Electronics to stop advertising its the next few months and that the MSO huge outfit and we belieYe they were the wares in magazines. probably will move for a summary largest pirate company in the United The decision was handed down af· judgment based on the evidence it has States,". L.A. Ops Win $69K Theft Restitution
os ANGELES - Two ca· and receiving stolen prop- three years of probation, Ii ble operators here reo erty. Los Angeles County 16-month suspended sen- Lceived $69.510 in resb· sheriff's officera arrested the tence in state prison and tution as part of the pair in a highly publicized 1.000 hoW'8 of community sentencing of two men be- raid in North Hollywood and service, in addition to the lieved to be at the heart of a other locations last March I'llIItitution. Meacham reo Southern California cable following an investigation by ceived three years of proba- theft operation. Continental Cablevision Inc. tion and 200 hoW'8 ofcommu- The restitution was made Authorities recovered more nity service. The restitution by Kenneth Burton and Eric than 2.000 set-tops, calh funds were Iplit between Meacham. who pled guilty to and computer equipment. Continental and Tele-Com- felony charps of conspiracy Burton was eentenced to mUDications Inc...
MLtJteJ,tOJl1 f) J NWJ ~ ~ 1).,;/ 5fl qqw t i TIl, '6",",,,, ,rtI" C"t-'e 7'"V pil'Aefl is now A muhit-illiolt-.colt,,1' I'Aeket And it's sfArtin,-.-to ,et "An,erous. HE PIT BULL LIVED. It tooktwo bullets atpoint-blank range-one through its head and another through its stomach-butitlived. 'fThe Los Angeles County sheriffdidn't wantto shoot. Butwhenyou're pinned against a fence by an animal that's trained to treat your throat like a chew toy, you do what you have to. Especially when you're trying to chase down a crook suspected of running a major piracy ring that may have bilked companies out of millions of dollars. 'lThe sheriff pulled the trigger during a raid on March 7, 1996, at the Nonh Hollywood apamnent of suspected cable felon Kenneth Bunon. The team that went after Bunon thought it was prepared for everything-until the bust went down. "When deputies knocked on the frOnt door and demanded entry, the resi dents released the dog into the rear yard," says Detective Richard Guy Hiles of the Los Angeles County Sheriffs Depamnent, who led the Bunon investigation. The pit bull charged one of the sheriffs and pinned him against the backyardfence. "Itwas anunfonunateincident," Hiles says. "We make allowances for dogs. We usually bring pepper spray or a fire extinguisher to scare them." Fonunately for Hiles's men, the 51-year-old Bunon had a lot less fight in him than the pit bull did. L.A. County sheriffs collared Bunon and searched his apan ment, where they found a trove of"black boxes" that could be used to pirate cable signals, along with what the police call theft-related gear-a cache of several thousand com puter chips and software that could be used to reconfigure the boxes. Bunon had been suspected of manufacturing chips that override the security and scrambling features built into the set-top boxes used for cable TV services. The evidence proved those suspicions were correct. Meanwhile, just a few blocks away, anotherteam oflaw enforcement officials paid an unwelcomed visit to Eric Meacham, identified as one of Bunon's parmers in crime. Meacham allegedly acted as the set-top setup guy, installing Bunon'sboguschipsinto cable conveners. Thetwothensold those conveners to people who wanted to watch premium cable TV channels without paying premium prices. Luckily, nopitbullwasonhand to greetcops at Meacham's place. and hewas arrestedwithout a fight. Sheriffs seized about 500 ca· ble conveners from the apartment. Later, officerswent to a third Nonh Hollvwood location. which served as a warehouse for the piracy ring. There they found another 2,000 set-top boxes. The boxes came from a
AUGUST 1996 tele.com 55 who's who of manufacturers: General of stolen cable TV services is about signals? The answers aren't encourag Instrument Corp. (Chicago). Pioneer $4.7 billion a year-no small piece of m~ for cable TV operators. New Media Technologies Inc. (Long change, espeCially considering that Almost everv cable TV executive Beach, Calif.), Scientific-Atlanta Inc. revenues from the entire cable TV in involved in fighting cable theft admits (Norcross, Ga.), and others. Thev had dustry totaled about $23 billion in that cable piracy is a socially accepted been stOlen from several cable TV op 1994. And that $4.7 billion doesn't "victimless" crime. Call it the Robin eratOrs, including Continental Cable even include the theft of pay-per-view Hood syndrome: Cable pirates are viSion Inc. (Boston), Tele·Commumca programming, seen as underground heroes who rob tions Inc. (Englewood, Colo.), Century The most common form of cable from the rich (the bloated cable mo Commumcations (Stamford, Conn.), theft is the rigging of set-top convert nopolies) and give to the oppressed and Marcus Cable (Dallas). ers and descramblers to receive all (cable TV watchers who couldn't-or programming-basic, premium, and wouldn't-pay full price to watch pay-per-view-when only basic is au Wrestlemania or the latest Jim Carrey PRIVATE INVESTICATION thorized. That's the scam that got Bur movie). Then there's the issue ofactu ton and Meacham in trouble with the alloss: What does the cable company N FACT, it was Continental law, A second form of cable theft in really lose if a person who steals a sig Cablevision that started the volves outright stealing of signals. In nal wouldn't pay for it in the first .J investigation that led to the many cases, thieves shimmy up tele place? After ail. the cable company breakup of the Burton ring. The com phone poles to make an illegal connec still can sell its service to paytng cus pany's Western region security office tion to their living-room TV sets. Pole tomers, theft or no theft. had been keeping an eye on Burton for climbing piracy is on the decline. Often. there isn't even a cleat more than a year, all the while sus mainly because cable companies have recognition ofwhatis legal and illegal. pecting that he was illegally altering better procedures for monitoring ille Makers of "alternative" set-top can· and seUing stolen set-top boxes. As gal connections. verters advertise in scores of reo Continental built up its case, it con Cases like the Burton bust are spectable consumer magazines, sud tacted lC!w enforcement officials in Los starting to put a dent into the big-time as Popular Science and Popular Elec· Angeles, who then took up the chase. distributors of set-top boxes used to tronics. Sellers ofalteredset-tops, "pri Continental had a very good rea steal cable service. Bates says. But the vate label" units, and "pancakes" son to go after Burton: Piracy in its supply of doctored devices is far from thin housings containing pirate chip~ Western region was outofcontrol. The drying up. "Each time a distributor is thatwork with brand-nameset-tops cable company operates franchises put out of business, one, or two, or present themselves as legal business that serve about 925,000 subscribers three step up in his place," Bates says. es. Theysay it's up to customers to pa~ in that region, mostly in California. As That raises some ugly questions: operators for all the services, and the~ many as 25 percent ofall customers in Why is the demand for illegal set-top counsel buyers to do so. a given franchise receive at least some boxes so high? And what drives other This is'chutzpah on a grand scale cable services illegally, says Michael wise law-abiding citizens to pay any says the National Cable TelevisiOl Bates, director of security at Conti where from $150 to $500 for the ex Association (Washington, D.C.). Whl nental. Experts estimate thatthevalue press purpose of stealing cable TV would buy an altered box if their aill
I j , ~ Ii II
51.. • AUGUST 1996 was to payfor the programmingin the word to Joe and Jane Consumer that Porsche sports car, and stole more first place? cable theftis a realcrime. One strategy than 16,000 black boxes-induding In a way, cable operators have is to convince cable pirates to become 3,500 from a Los Angeles Police De· themselves to blame for some of the paying customers, usually by offering panment evidence locker. Five of serves-'em-right attitude about cable anmesty to anyone who turns in an il those arrested have already pleaded piracy. Until recently, cable companies legal box. Another is to convince guilty to federal felonies. Authorities i had been too busy chasing after new thieves caughtwithillegalsetups to be hope to recover $10 million in assets. ~ customers to worryabouttheft. That's come paying customers. Operators say Meanwhile, improvements In I' changing, now that the pool of new that 40 percent ofall cable thieves end technology should help make it a lot customers is drying up and operators up subscribing to the cable service. toughenopirate cable signals. The big , change is the switch from analog de are feeling the heat from new com That kind of dealing doesn't sit , petitors, like direct broadcast satellite well with Michael Bates, who savs livery systems to digital. The digital companies. Continental recovers about 100 black age will make cable systems more se· boxes per month. Bates says his com cure, experts say. pany is "very proactive" in bringing But there's still one big problem CABLE CR ••ESTOPPERS civil actions against anyone accused of that technology can't correct. For ca· stealing service. Amnesty programs ble TV felons, the punishment rarely ABl.E OPERATORS say theyare only work if cable thieves know they'll fits the magnitude of the crime, as far now dead serious about fight pay a high price if they get caught. "If as industry leaders are concerned. C ing cable piracy. Companies there is no deterrent orconsequences, Case in point: Bunon and Meacham are tightening internal security proce anmesty is a joke," Bates says. "If we pleaded guilty in Van Nuys (Calif.) dures to keep cable boxes out of the say, 'Give us back your box and let's let Superior Coun to a felony count of reo hands of thieves. In the past, it was bygones be bygones,'bythe time we're ceiving stolen propeny. They were pretty easy for cable pirates to get their nomore than a blockaway, they'll pur· sentenced to 18 months in prison handsonlegitimate boxes-afake pur chase another pirated box." and promptly released on probation. chase orderora bribe to a beancounter Things are looking up for the ca· Those sentences didn't thrill could help a pirate land dozens ofbox ble industry. In late June, "Operation JamesAllen, director ofthe NcrA's of· es ready for dOCloring. Now that oper Cablerrap" led to the biggest cable fice of cable signal theft. He says that atOrs are tightening thescrews ontheir bust ever. A 92-count federal indict the criminal justice system is taking box supplies, things are getting a little ment charged nine people in Florida, "financial" crimes more seriously. but dangerous. This past March-just Texas, California, and Hawaii with that California courtS are known as be· about the time that Bunon and various cable theft crimes. The indict ing lenient. AboUl the sentencing. Meacham were getting cuffed in Nonh ment charges that a ring of cable Allen says, "1 want to sayit's a surprise. Hollywood-an employee of Comcast thieves operated plants to make illegal but I'm not surprised." ~ Corp. was shot in nearby Ontario, boxes in Florida and California. The Calif., during a cable box heist. crooks sold about 100,000 phony box CARL WEINSCHENK is semortechnolo~' While they fight the felons, cable es a year, attempted to bribe an under editorfor tele.com. He can be reached over companies also are putting out the cover agent with $40,000 and a the Internet at [email protected].
I ~
AUGUST 1996 tele.com 57 ------F 0 RUM ------.------War on Signal Theft Enters New DimensioI
By GEOFFREY L. products depicting Grs Once these steps have prevailed: Although the J BEAUCHAMP trademarks, products and been taken. legal action is requires the FCC to iaI model numbel'6. This consent then posaible. Even so. the regulations promoting I s the industry enters a decree was the first of its threat of suit by a single retail sale to aubacriben new era of fierce com kind to restrict the publica· plaintiff may not be enough programming-access devic A petition, where profit tion of signal-theft. ads. to persuade an otherwise including converter/, margins will be squeezed Far more pernicious than reputable publiaher to volun scramblers, it alao prohik even tighter by technological Nuts eft \blts magazine are tarily agree to discontinue the FCC from issuing Teg\I advances and the availabil periodicals like Popular Sci the offending ads. For that tions that will -jeopardize ity ofmore programming ser ence, which also run ads for reason, it has become clear curity of multichaDDel vi, vices. theft of service will be these devices. Not only do that a coordinated effort is programming and other I come even more c:oetly for ell they provide a market for the required by all ofthose in the vices offered over multicb segments of the industry, af sale oftheft. devices, but they industry that are harmed by nel video-programming I fecting not just cable and also give them an air oflegit these advertisements. Such tems. or impede the Ie satellite system operators. imacy. Not surprisingly, an effort would be very eff~ rights of a provider of a1 but also premium chaDDel these ads are often used by tive if done with the active services to prevent theft producers. pay-per-view di& cable-theft. vendors to con involvement ofPPV and pre service.~ How the FCC 1 enaure the creation of a tributors and motion picture vince courts that their prod BEAUCHAMP mium program providers, companies. ue:ts have achieved general the NCTA and the Motion tail consumer market For that reason. a new acceptance in the COD8umer ment ofthe U.S. Conatitution Picture Auociation ofAmer programming-accees devl front has been opened in the electronics marketplace. does not immunize publishers ica. while preserving signal 1M war against signal theft One solution to the prob from liability under those Antitruat concerns should ritv remains to be seen. where the publishers of sig lem lies in a coordinated en statutes becauae advertise not be a deterrent becauae of Only a concerted lobb, nal-theft ads are the princi forcement effort apiDat the ments are d_ed to be -com the ille,al nature of the effort and effective partiCi pal targets. publication of signal-theft mercial speech; entitled to produe:ts themselves, as con tion in the rulemall The FBI has begun to ag ads by all segments ofthe in far I.s constitutional protec firmed by the FCC and by process by all affected I greuively prosecute cable dustry, not juat by cable oper tion than other forma of the increasing number of ties will prevent any I theft., as evident from the re ators and equipment manu speech. succeuful court cases against regulations from e:ueerl cent ·Cable Trap~ indictment facturers. Program providers While vendors are pre signal-theft-equipment ven ing the piracy problem. by a federal grand jury in like The Walt Daney Co. sumed to know the nature of dors. This is no different from In a highly competi New Jersey. where Dine de (owners of JlulticMftMI their produe:ts. it is important the nationwide anti-piracy market with a greater var fendants were c:harged in the Nrws), Home Boll Office and to &how that publishers know program already run by the of programming IIllrvices, largest cable-piracy p1'OIleCU Showtime Networks Inc. lose that the advertisements they MPAA, which actually pr0 explosive growth of electr tion ever brought. Although revenue, with PPV distribu are publishing are for illegal motes and preserves legiti media like the Internet continued federal law-en tors perhaps the hardest hit. aignal-theft devices. A puta mate competition. the prospect of consu forcement efforts to combat The National Cable Televi tive plaintiff must notify the The Telecommunications Re sales of cable Bignal ' cable theft will have a deter sion AallOCiation has esti publiaher in writing ofthe of· form A/:;t of 1996 should invest verterfdescramblers, the til rent effect on the private ven mated that the sale of theft fending advertisements. This the battle qainst signal piracy posed by the advertisell dors, the competing demands devices c:oets the industry notice letter should also con with eYeD greater urgency. Un and sale of signal-theft upon federal law-enforce about $4.7 billion per year. tain an uplanation of why der the guise of consumer vicea is greater than evt ment agencies mean that the This figure will rise as the the advertised devices are il rights and free enterprise, Con· coordinated attack on industry cannot assume that number of programming ser legal, citing all relevant gress came perilously c:lc.e to publication ofthese ads it criminal prosecutions will vices increases more than statutes, any appropriate mandating lIIIbsc:riber owner beBt way to counter eliminate signal piracy. one hundredfold with the ad Federal Communications ship ofconverterldeac:ramblers, threat. In 1993. recognizing the vent of new technology. Commission policy state while ignoring the obvious Geo~ L. &aucltamp need to address this prob Given publications' indi ments and regulations and threat to ligna! lIIlCUrity that pertner in lew firm WI lem, General Instrument rect role in the sale ofsignal. any pertinent court cases. such a -.uTe would entail. Peermllle, Thlone, CJ Corp. sued T&L Publications theft devices, the liability of Actual notice not only Thankfully, common senile Garrity & Potesh in Blue Inc., publisher of Nuts & a publisher ofcable-theft ad makes it JIOBlIible to recover Volts magazine, in federal vertisements is not as clear damages under the Lanham district court in Philadel· as that of a cable-theft ven Trademark Act, but it a1Bl> phia. Facing liability under dor. Publishers of signal may render the publisher li the Lanham Trademark Act theft ads may nevertheless able under the two federal ca· and the federal cable-theft be liable under the Lanham ble-theft statutes. Moreover, statutes, the publisher agreed Trademark Act, the two fed courts are unlikely to find a in the court-approved consent eral cable-theft statutes, the publisher liable under such decree not to publish ads for Federal Copyright Act and circumstances unless knowl certain types of cable-theft the common law of many edge and intent are estab devices and for other signal states. The First Amend- lished. PHllAORPHIA DAllY NEWS JUl 27 1996
CablebC».x SCalRiRAy pbia. p~.mll';:: .rreetly. aUows . NOit of .me .thefu bl.. oc· uiers 10' lei! .cnmbled ply. Ripoff artists· curred in llCilllborhoodl iJl the cb.ID.Dels 11. HBO and Cinl:: uonbeut lAd DOnbW. parts mIX. The boX.MIHor upwards of the Ci1J. '. of SISO OG ·the bl.ck marktt. ..pretend to be 1'lM ac:amworb, be aid., be aid Vic ~0WI'0IlIk1" ....omcest CI\IIB .the nblCribin 1ft IX· spat.IND. pecUq...mce-. C111\1. Co1DcIIt Mo,t CU.tD....ril UC DOl employees blnliOatncton to·collect the for me bOX l~ bey. Lllll boXu from e:uatoIaerswbo CIA- cUr,.. YiCl1m 10 ua. .cam;Pall'IIll.aid. A.ucx:ic*d Pna eel 1el'Yu:e. , eompany -.curtly officiall CoatClSt )c.I S3 am: ·u. to S4 "llieves paalnl tb.....lvlS are mYIIUptl1ll lbe paatbl111Y ..Illlcm -year to c:ablc (.left ud ~~. ala cable tehmsien e",p107' lbIt.the dUe". beve lICe. to •aboulJO percent Df thl' is Clue ~s have slOlu more than 2SO bllerul coapullU"lbb til sub to c:ablo boX theft. PardiJll_id. cable boxes from PlUlldelpbl•. ICZ1ber cmce111t\OnJ. COIDCIII· bu the fullowing bOa. WAIniJl me put year -. "'Ir•• q1lick'lChUle •. Pardini nuemou for lIu'bscrlb~rs: . ·each time with the uDknowiq 'laid. ~0Ilr priJIW1 eDDCeI'D is .• Look for a photo idenUffc:a . subscriber', b1esSiDa·' CUlO.eilUYlce. U oarrecords UoI; t1 t~ ule (0· . The scam arttsts tel.nUfy. IN INllcaUnc' euttomer ItiU Me one. th.mtelv..... cable employees. hM eqat,....l there's I • AU. to see I pre-printed say they are there to plet. up me ·wllote lot at UD " bad- cable box lad walk nut with it. .acbeI ill rMUlvlq.their Ie· work ordear. Mid Ed Pardini. vice ,raidot COUDta." • oa1y .Uow workers an tile .ano ,e:ner.1 manacer of eo... The '1IIl&l1, blldt wes COn· hoNe duriul ICbeduJ~11 Ip ~. Cablevisi!1J!..of' PhilMleI· IIl!!... ~.. CO!DP'I'~ ..~~. ~!~.1f polAUD~nu•• ~PORTER. JUl 8 1996
Showtime takes on cable pirates .,...... att~l. Ily cable \hell bf:l:ause tht' equip. inve~unetlt to b:lttle pir4l'y by NeW YORl< - Shuwumc ~et, nU'nt that dcscramhlf"s the :M:r· showing the finano.u impact of worK:t Jnc. h:l~ ret.uned Tflccom. V1Cl!$ lS rea
PENNSYLVANIA
PtlllMeIplIIa: Comcast Cable VISIon of Phillldeillfua estimates that theft of its cable service and eQuIpment cost It over 55 million a year In lost revenue. and the operator IS dOing some thing about It. Among those Caught as PlIrt of an audit be gun In February were two resI dents who were modifying and selling ,lIegal converter boxes; two tllVern owners who were receiving cable programming WithOut authorization; two resI dents for theft 01 cable service; and one subContractor for stealing converter boxes from SUbSCribers' homes. Charges were filed agaInst all of thOse people. ThOse snagged during tile audit will be given the op portunity to become legItimate SUbSCnbers. and repeat offenclers will be prosecuted.