Comcast, Boxee Tell FCC of Agreement in Dispute Over Encryption

Comcast Corp. (CMCSA) and Boxee Inc. said they agreed on a method for showing encrypted cable channels on the startup’s devices, which can be connected to a television to show Internet video and TV programs.

The agreement, disclosed in a letter filed with the U.S. Federal Communications Commission, may resolve concerns by New York-based Boxee that expanded encryption of programming may leave its boxes unable to access basic-cable TV channels.

Cable providers such as Comcast, which is the largest, say they want to securely transmit basic services in order to reduce piracy and disconnect cable remotely, cutting costs by reducing the need to send technicians. Under the agreement, if approved by the FCC, cable companies would provide hardware or modify existing analog-to-cable converters to let them interface with third-party set-top boxes, Boxee Chief Executive Officer Avner Ronen said in an interview.

Soon after, cable companies would offer a way to decrypt basic-cable signals using software, Ronen said. They haven’t yet determined an exact timeline for the changes, he said.

“Sitting down at a table is much more productive than exchanging views in filings with the FCC,” Ronen said. “The proposed solution addresses both the concerns of the cable companies and the concerns that we had.”

In October, the FCC proposed letting operators encrypt basic cable services, saying most people have equipment to view the signals. In February, Boxee met with the FCC to oppose the rule. Boxee said encryption could throttle the market for its devices, part of an increasingly popular group of products that make it easier for people to find streaming content such as Netflix Inc. (NFLX) movies in the same place as live TV.

The agreement between the companies could provide “a strong foundation” for an FCC order allowing encryption of the basic service tier, Philadelphia-based Comcast said in the letter. The document described a June 26 meeting with Comcast and Boxee executives and FCC officials to discuss the agreement.

Neil Grace, an FCC spokesman, didn’t immediately provide a comment.

To contact the reporters on this story: Mark Milian in New York at mmilian@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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