It's a hot September day and the cable patrol is on the prowl, hunting down pirates who steal the signals that are the lifeblood of cable companies.
Ron Smithburger, supervisor of CVI Cablevision Industries' audit department--whose job is to catch cable thieves--meets an auditor at an apartment building in a Van Nuys neighborhood notorious for its high level of cable theft. A quick inventory of the four cable boxes on the outside walls reveals that 18 of its 32 units are receiving signals illegally.
The auditor, Mark Smith, unplugs the unauthorized hookups and seals the ends of the cables with "terminator" traps--thumb-sized metal devices that block the signals. When the job is done, Smith smiles. "It's been a calm day," he says. On other days, "I've had people threaten to shoot me."
As the cable industry braces for the possibility that Congress will override President Bush's veto of a cable-rate regulation bill, companies face another daunting and possibly more costly problem: the widespread theft of service.
The National Cable Television Assn. (NCTA), a Washington-based trade group, says that nationally cable pirates steal services worth more than $3 billion a year. Local cable operators estimate that anywhere from 3% to 15% of homes in their areas receive signals illegally, costing them up to several million dollars annually in lost revenues and untold additional costs associated with tracking offenders, replacing damaged equipment and trying to prevent abuses.
Yet efforts to thwart cable piracy have fallen short. Hundreds of cases involving signal theft and the sale of illegal decoding boxes have been successfully prosecuted, but few have resulted in long prison sentences. Beleaguered prosecutors and police--more motivated, understandably, to pursue murderers, rapists and drug pushers--are hard-pressed for time to chase cable crooks.
Among local companies, CVI in Chatsworth has been one of the most aggressive in fighting cable theft. It has four full-time auditors who continually check cable lines for illegal hookups. They climb utility poles and search boxes in apartment buildings and underground vaults. Recently CVI mailed pamphlets to homes in its area warning that cable theft is a crime punishable by up to a year in jail and a $1,000 fine.
But the reality is that CVI, like most operators in the region, has never brought a cable-theft case to trial.
Cable companies have been largely unsuccessful in cracking down on theft in part because illegal "black boxes" are widely available and sell for as little as $100. These decoders allow users to subscribe to a basic cable-TV package and receive pay-for-view and premium cable channels free
Jim Allen, director of the NCTA's office of cable-signal theft, says that distributors of black boxes have told him that the business was "better than drugs. It doesn't have the violence, and the penalties weren't as great."
Nonetheless, local cable operators say they are getting serious about fighting piracy, because cable's fast growth of years past has slowed. They are investing in educational campaigns, pursuing convictions for repeat offenders and installing new equipment and technology that's tougher for thieves to crack. "We are going after everyone that has unauthorized service or distributes unauthorized products," says Bob Helmuth, CVI's vice president of marketing.
It won't be easy. Signal theft is pervasive and difficult to detect, and cable outlaws themselves are using increasingly sophisticated technology. "Any kind of encoding or encryption device that man can conceive of, someone else can defeat," says Paul Radefeld, general manager of Falcon Cable TV, which serves parts of Agoura Hills and Calabasas.
In recent years, cable theft has evolved from penny-ante operations into big business, with boiler rooms and warehouses filled with black-market equipment. Some even accept credit cards. The devices are sold through a variety of means, including swap meets and ads taken in electronics and video magazines that give 800 numbers and usually contain such dubious disclaimers as "Void where prohibited by law."
Under federal and state law, cable-signal theft and the sale of devices intended for that use are misdemeanors punishable by up to a year in prison--two for repeat offenders. But such charges most often result in suspended sentences, fines or obligations to perform community service. The new cable bill, however, would make cable theft a felony.
Operators are also up against a public that doesn't view cable theft as a true crime. "It's funny to me that people would never go to McDonald's and sneak a hamburger off the rack, but they hook themselves up to cable illegally and they think it's OK," says Scott Binder, general manager at ATC Cablevision in Canyon Country.