• by David Kaplan , April 12, 2005

Remember "hot boxes"? Apparently, such devices that allowed individuals to siphon their neighbors' cable TV signals are a thing of the past, as the rate of consumer theft of cable's basic video service has declined by more than 50 percent in four years, according to a new survey commissioned by the National Cable & Telecommunications Association.

The reason behind the tremendous drop in cable signal robbery is the increased use of digital platforms, which have helped the industry develop ways of identifying unauthorized connections, said Nilda Gumbs, director of NCTA's Office of Cable Signal Theft.

The study noted that the theft rate for cable service--the percentage of theft per 100 homes the cable network reaches--is at 4.65 percent, down from the 11.5 percent found in the previous NCTA cable theft survey in 2000. The theft for premium services also decreased from 9.5 percent in 2000 to 2.15 percent in 2004.

New technologies--such as digital cable, high-speed Internet access and VoIP--were found to have low theft rates--less than 1 percent, the report stated - which the NCTA said suggests that advanced services are more secure than predecessor analog services.

Still, although theft rates are down, signal robbery has not disappeared. The survey found that the issue still presents a challenge for the cable industry, amounting to roughly $4.76 billion in annual unrealized revenue. This amount represents more than 8 percent of the cable industry's $57.6 billion annual gross revenues from 2004. The 2000 NCTA survey had reported that cable theft resulted in $6 billion in annual unrealized revenue.

The study was conducted on behalf of the NCTA by consultancy Frank N. Magid Associates, which surveyed cable operators across the country and measured theft rates for analog, digital, high-speed data access, and telephone services, including digital phone and VoIP. To determine the unrealized revenue loss, the theft rates were multiplied by the average monthly service cost per year against the number of homes passed by cable.