April 8, 2008

Cable Pirates

Have Them Come Aboard, Not Walk the Plank

By Monta Monaco Hernon

Cable pirates take money from the pockets of operators, but they also affect paying customers, whose two-way services can be disrupted as a result of noise from illegal connections. If operators catch and disconnect these thieves, but lack an effective enforcement plan, the pirates often back off the plank and up the pole to hook their equipment up again.

Last year, Secure Signals Inc. (SSI) helped Buckeye CableSystem conduct a full system audit and convert 1,500 cable pirates into paying customers. This resulted in $3.1 million in net revenue for Buckeye and a 3.75 percent increase in subscribers.

"We have a very unique resolution process," said Stan McGinnis, founder and CEO of SSI. "Once someone is illegally connected, they are in violation of federal law. It is a very serious matter. We convey that to them in a very cordial way."

"There has been a stigma in cable companies from going after pirates for fear that we would create negativity. The exact opposite is my experience," said W.H. "Chip" Carstensen, Buckeye president and general manager.

SSI's "big stick" involves informing pirates they could face up to a $10,000 fine for violating federal law, but the operator would rather settle and sign the them up as paying customers. The settlement might be a couple thousand dollars depending on the length of contract.

Real-time audits

During a full-system audit, SSI uses a Palm-based program to locate unauthorized users, locations with no residents, and satellite subscribers. Afterwards, SSI will leave up to 10 Palm Pilots with an operator (dependent on the number of subscribers).

Using the Palm technology provides up-to-the-minute updates about a system, including billing information. This differs from the traditional method using green bar printouts, which relied on outdated information.

"Things move so fast that by the time the contractor gets done with a whole area (using the green bar report), they could have incorrectly thought someone was a pirate or thief and disconnect them. They were really a paid subscriber that just paid their bill," Carstensen said.

"If (an operator) uses our audit service and Palm Pilot program, there (will be) 30 percent more efficiency in the workplace than if using the old fashioned green bar (method)," McGinnis said.

Stopping freebies

SSI is beta testing new software that will identify the piracy of pay-per-view digital programming as well. "People are under the impression that if they just pay the basic cable rate, that somehow they will blind us to other things they can steal," Carstensen said.

These individuals purchase a filter that allows them to order a program, but block the return signal to the billing system.

"(The) software will allow us to monitor non-responding accounts to determine whether they are pirate accounts or (if there is) a technical issue in the node," McGinnis said.

- Monta Monaco Hernon