With the relaxation of satellite broadcast and reception regulations by the U.S . Federal Communications Commission in 1979 and the tremendous reduction in the cost of satellite receiving equipment due to advances in technology. a booming market developed for home satellite dish receivers in the early 1980s. These satellite dishes were known as television receive-only satellite Earth stations , or TYRO. Essentially. TYRO dish owners were able to intercept, free of charge, cable television programming distributed over C-band satellites. Although most early adopters of TYRO dishes were located in rural areas where cable television was unavailable, cable system operators were nevertheless concerned about the actual and potential loss of subscribers who opted to receive programming for "free." When Congress passed the Cable Communications Policy Act of 1984. which specified that it was indeed lawful to receive unencrypted satellite signals for private viewing, cable system operators convinced program suppliers to scramble their satellite uplink feeds. Although they sought to protect the system operators (their clients) by scrambling. program suppliers also realized the profit potential in selling programming directly to the TYRO owners.

     By early 1985. therefore. Most major cable program suppliers (led by Home Box Office [HBO] and Show­ time) had begun scrambling. As a result, TYRO owners were required to purchase a signal descrambler (also called a converter box) and pay a monthly fee to receive scrambled programming. This move eventually led to the development of direct broadcast services (DBS)-such as DirecTV. Primestar (later purchased by DirecTV), and EchoStar-that supply  program­ ming direct to consumers' homes via satellite dishes. DBS has become the most significant competition to local cable companies for the supply of cable programming. By 2001. 16 million U.S. households subscribed to the leading DBS systems.

     In the mid- 1980s, many TYRO owners worried that they would have to deal with several different encryption systems. The industry, however, adopted as the standard for scrambling the Videocipher II (YC II), a product of M/A-Com (which was later purchased by General Instrument Corporation, itself later purchased by Motorola). The industry was confident that VC II would reduce satellite programming "theft," but the system was plagued with problems. A black market developed relatively quickly for altered descramblers. To receive free programming. Dish owners could simply purchase a descrambler with one of the chips in the unit replaced, enabling the unit to descramble all programming. After six years of program scrambling, it was estimated that only 10 percent of the three million dish owners were paying subscribers.

     To correct this flaw, General Instrument released an updated version of the descrambler called Videocipher II Plus (VC II I) in late 1991 . The new units replaced the multiple chips in the unit with a single chip. Any effort to copy or replace the chip would disable the unit entirely. Shortly thereafter, companies enhanced the system with a renewable encryption system (VCRS) through the use of a TVPassCard (similar to a credit card). Should a breach in security occur, the encryption information on the cards could be changed quickly and inexpensively. Major programmers switched to the upgraded system with due speed.

     While the scrambling of signals was initially the concern of cable programmers and operators, the U.S. broadcast networks (Columbia Broadcasting System [CBS], National Broadcasting Company [NBC], and American Broadcasting Company [ABC]) also began to scramble the transmission of programs to their affiliates (in 1986, 1988, and 1991, respectively). In defending his network's move to scramble such transmissions, one network executive contended that network feeds are "private property" and encouraged viewers instead to watch their local affiliates for local news, weather, and commercials. Although obviously directed at protecting the advertising revenues of its affiliates, such reasoning ignores the lack of local reception for many rural owners of satellite dishes.

    With the arrival of digital technology, the industry now relies on the MPEG-2 compression format for digital video- and audio-signal distribution to cable headends. MPEG-2 (the digital compression standard developed by the Moving Pictures Experts Group) allows for more programming in the same amount of bandwidth, as multiple channels are multiplexed into a single data stream. The two industry standards for program transmission are DVB (Digital Video Broadcast) and DigiCipher II, Motorola's MPEG-2-based distribution system, which is used by about 70 percent of cable channels in the United States and Canada.

     The scrambling of program signals occurs when each MPEG-2 packet is encrypted during uplink  to the satellite. The scrambled packets are processed through a conditional access module (CAM) in each decryption device, where the CAM then takes the decryption key from an inserted smart card and scrambles the signal. The encryption code is obviously secret, and various scrambling services exist around the world, including companies such as PowerVu CA, Nagravision, Cryptoworks, Video­ Guard, Mediacypher, and IRDETO.

     With the continued convergence of digital technologies and telecommunications, the (perceived) threat of such technologies to the economic interests of television, movie, and record producers increases. Digital technologies may allow for improved delivery of multiple media products into the home (as MPEG-2 video compression does for interactive systems, such as high-speed Internet and video-on-demand), but they also allow users to capture, manipulate, duplicate , store, and disseminate digital media products with great ease (dissemination over the Internet being of particular concern to the media industries). What was once a somewhat simple issue of scrambling analog signals has become a much more complicated concern involving copy protection for a myriad of media products via the encryption of digital information.