Cable tracks thieves

THE BALTIMORE SUN

In the endless cat-and-mouse game between cable TV companies and cable thieves, it's hard to tell who has the upper hand.

On one side is a multibillion-dollar industry, with 58 million households hooked up nationwide.

On the other are amateur electronics dabblers, mail order houses, small businesses and an ugly new player -- drug gangs using their networks of junkies to steal cable TV equipment.

The cable TV industry has armed itself with magic bullets, terminators, sniffers, snitches, private investigators and sting operations to fight this array, and is backed by the FBI and local police departments.

Matched against these weapons are illegal computer chips called "snooper stoppers," designed to thwart detection, electronics wizards known as "chippers" who convert computer chips into illegal receivers, and a host of clever and not-so-clever minds intent on stealing cable signals.

Says Dennis Seymour, whose private investigation company in Annapolis is employed by Comcast Cable of Baltimore County: "The cable thieves are getting more sophisticated, but we're staying ahead of them."

Or are they? The National Cable Television Association estimates that in 1993 the industry lost $4.7 billion, or about 10 percent, in uncollected fees to cable pirates, a figure that infuriates the cable industry.

"We're going to rid the system of cable thieves," says David Nevins, a spokesman for Comcast, which has 250,000 subscribers in Baltimore, Howard and Harford counties.

CCable theft in its simplest form is an illegal hookup, a tap into a cable line that brings service into a home or business. But the advent of "addressable" converter boxes that can be modified illegally to descramble premium channels has made policing more difficult.

Comcast expects to finish surveying its system for the easily recognized illegal hookups this spring. Tracking down illegal descramblers in the converter boxes, however, requires some ingenuity and a bit of humor.

The sting

For instance, Comcast of Philadelphia ran a sting to catch owners of illegally modified converters during an HBO broadcast of a Michael Jackson special.

"We aimed our stings at males at first," says Phil Cochetti, the system's security chief. "We used major fights and other sports and got practically no response. Then we decided to target youngsters and women with the Michael Jackson show and got 6,500 calls on one day."

Philadelphia Comcast offered free Michael Jackson T-shirts and hats and jiggled its system so that only watchers with illegal descramblers could read the offer on their screens.

The company picked 20 cases from among the people who called in for their free gifts, sued for damages and collected an average of $2,300 from each, Mr. Cochetti says.

Comcast of Baltimore County, like many cable companies nationally, increased its policing efforts once it learned of the losses it was sustaining.

It has spent more than $1 million on lawyers and investigators and has prosecuted more than 300 cases against cable thieves. It has 20 more cases ready for court before July. Comcast bears the expense of the investigative work, then turns the evidence over to local prosecutors.

Says one defendant, who spoke under the condition of anonymity, "I didn't think it was that big a deal, but now I do. I guess I thought I was being cute."

An Essex man is serving a six-month jail sentence for selling illegal hookups, and Comcast is suing a Dundalk businessman for $150,000, claiming that he sold cable equipment for illegal purposes. The man also is awaiting trial on 67 criminal counts of cable fraud.

State and local prosecutors have actively supported cable TV companies, in part because cable theft costs the government money. Baltimore County gets 5 percent of all cable fees -- standard for the industry -- and collected $3.5 million last year.

The state gets 10 percent of pay-per-view fees, plus sales tax on the purchase of equipment by the cable companies. That was worth $1.9 million last year.

To help cable companies get convictions, the General Assembly tightened cable theft laws in 1992. The law now provides up to five years in prison and a $5,000 fine for those who illegally connect customers to cable as a business venture. First-time cable thieves who hook themselves up can get up to six months in jail and a $1,000 fine.

The legislature also shifted the burden of proof to make convictions easier to obtain.

Previously, a cable company had to prove that a person with illegal service actually intended to steal it. That meant catching someone in the act of hooking up his home or business, Comcast's Mr. Nevins says. Under the new law, once the cable company catches someone with illegal service, the defendant must prove that he did not commit a crime to get it.

About half of all thievery involves stealing basic cable service by tapping into someone else's line or the cable connection on a utility pole, or by invading the pedestal box that controls entry into a subscriber's home, according to John Wade, Comcast installation manager.

A new problem arose recently with Comcast's introduction of the addressable converter box, which enables the company to turn DTC on Home Team Sports, Playboy and pay-per-view programs in a subscriber's home with a command from the central office.

In some systems, such as United Cable's Baltimore operation, most homes have addressable converter boxes. United Cable officials did not return phone calls asking for comment on cable theft.

Converter cons

A lively trade has grown up around the converter boxes and the microprocessor chips used to unscramble premium services. Consumers can buy the boxes in electronics stores, at flea markets, through mail order houses or on the street.

"Most of the converter boxes on the secondary market have been stolen," says Mr. Seymour, the private investigator.

"We've even had people go door-to-door, say they're from Comcast, and tell the homeowner they need their converter box to repair it," he says. "Some have fallen for it."

Mr. Cochetti, of Philadelphia Comcast, says profits are so high that drug gangs there use addicts to steal the boxes.

"They give a junkie a $10 bag of drugs in exchange for a converter box, have a 'chipper' put in a computer chip configured for our system for a couple of bucks, and sell it for $250," he says. "They rob our service techs at gunpoint, steal from homes, infiltrate our warehouses with short-term workers and break into trucks."

Philadelphia police recovered more than 60 converters in a recent series of drug raids, he says.

Mr. Seymour says he has not seen drug ring involvement in Maryland cable systems but noted, "They have a different problem in Philadelphia because their system is almost exclusively on converter boxes."

Addressable converter boxes are not by themselves illegal. The problem arises when they're equipped with specially programmed microchips -- available by mail order for $30 to $60 -- that are used to steal signals.

"The illegal chip can give you all the premium channels," says Mr. Seymour, who has four investigators on the road every weekday looking for illegal hookups.

Cable companies have the weaponry to challenge the illegal box. They can use a "magic bullet," or sniffer, a signal that can be shot through cable lines to disable the illegal chip. But the illegal chip has to be located first.

"We can catch the illegal hookups outside the house, but, of course, we can't go in the house and look into the converter box without the homeowner's permission," Mr. Seymour says.

"We have our ways of detecting the illegal chip," he says, "and I'd rather not say what they are. The process is time-consuming and expensive, but we're doing it."

There are countermeasures to the detection process. Nuts and Volts magazine, an 80,000-circulation monthly for ham radio and electronics enthusiasts, is full of ads that are quite direct about what is being offered, although most of them say in disclaimers that the equipment is not sold with the intent to defraud cable companies.

"Protect yourself from descrambler detection with one of our 'Snooper Stoppers' and stop the Bullet," says an ad from Northeast Electronics of North Attleboro, Mass. The company will supply kits for up to $169 to anyone willing to assemble 150 components.

"You should have some electronics experience for the kits," a salesman told a caller, "but I can assure you they're detection-proof."

Cable Box Wholesalers of Tucson, Ariz., offers assembled, "bullet-proof" converter boxes with descrambler chips for $135 to $355, depending on the manufacturer. A technician there asked for the make and model number of the converter used by the caller's cable company.

"That's how we can tell how to code your descrambler," he says.

When asked if the descrambler was guaranteed to pass cable programs through to the TV set, he demurred.

"It's guaranteed, but you can't use it to steal signals," he says.

Lawsuit pending

Jerrold/General Instruments, a major manufacturer of cable TV equipment, has sued Nuts and Volts, charging that the magazine assists unauthorized cable reception by publishing ads for "illegal cable theft devices."

Nuts and Volts Editor Larry Lemieux says the magazine has no way of knowing the intentions of its advertisers.

"Jerrold asked us to refuse all ads offering descramblers, and we declined," he says. "We don't want to do anything illegal, and we don't think we are. There are much larger magazines doing the same thing, but it appears to me they're using us as a test case."

Comcast officials say illegal descramblers won't work in the long run because the company changes its signals from time to time.

"We even have people come in with converter boxes they bought by mail order to steal cable, ask us why they're no longer working after we've changed the codes, and want us to fix it," says General Manager Curt Pendleton.

Another weapon is the public. Comcast has a phone hot line for people who want to report cable theft.

"We've had youngsters turn in their fathers, neighbors turn in neighbors," Mr. Pendleton says.

Why would anyone help a cable company?

"Some retribution, some jealousy that someone's getting something for free, even a sense of fair play," Mr. Pendleton says.

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