News item: On Jan. 15 1986 Home Box Office (HBO) began scrambling the signal by which it transmits programming via satellite to cable companies for local distribution. In that way HBO hoped to ensure that dish owners--1.5 million at latest count--couldn't pluck a clear picture of its programs out of the air for free. Other cable programmers will soon follow suit. According to Ed Horowitz, HBO's senior vice president for technology and operations, it took four years to develop a descrambler for local cable operators and dish owners who subscribe to the pay service.
What HBO came up with is a complex encryption system called Videocipher II. Developed by M/A-COM, an electronics company in Burlington, Mass., it distorts the video and converts audio signals into digital information--a series of 1's and 0's--and then scrambles these numbers so that they can be decrypted only with a special descrambler.
HBO's digitized information is en crypted using the data encryption standard (DES), which was developed to protect unclassified federal information. In DES, once the signal is digitized, it's translated into an unintelligible signal called cipher. The form of cipher is determined by an algorithm for mixing up a digitized signal and a key, a 56-digit string of 1's and 0's that works like a password.
1985: Home Box Office announces its plan to market scrambled HBO and Cinemax programming to home satellite TV viewers via local cable companies. Hardware prices drop below $3,000. Industry enjoys record year, ships 735,000 systems. Reps. Billy Tauzin (DLA) and Charlie Rose (DNC) introduce H.R. 1840, a bill guaranteeing access to scrambled satellite TV programming at "reasonable" rates. Senator Albert Gore (DTN) introduces S. 1618, a companion bill to H.R. 1840. #
1986: HBO becomes the first programmer to scramble its movie services fulltime. M/ACOM introduces "alone" VideoCipher II consumer decoder. Industry rocked by negative press coverage and cableled antidish advertising campaign. Shipments plummet to 235,000 as over 50% of all satellite retailers close their businesses. First integrated receiver/decoder introduced by Houston Tracker Systems. SBCA founded on December 2 as a result of a merger between the Society for Private and Commercial Earth Stations (SPACE) and the Direct Broadcast Satellite Association (DBSA). Federal Communications Commission adopts rule which would preempt local zoning or other regulations governing the size and placement of earth station antennas.
The first satellite hackers attempted to construct homebrew systems to intercept HBO's signals and in 1976, using military surplus and homemade dishes and homemade electronics they were able to receive HBO. As more programming became available on satellite more individuals became interested in obtaining it and businesses began to manufacture equipment. Improvements in the technology of the components lead to radical reductions in their cost. A new cottage industry called TVRO (television receive-only) was born.