|This article needs additional citations for verification. (January 2013)|
Cable theft is the act of obtaining unauthorized access to cable television services. In older analog cable systems, most cable channels were not encrypted and cable theft was often as easy as plugging a coaxial cable attached to the user's television into an apartment house cable distribution box. So cable theft was widespread. In some rural areas nonsubscribers would even run long cables to distribution boxes on nearby utility poles. Set-top boxes were required with some systems, but these were generic and could be obtained by nonsubscribers from thrift stores.
To prevent this, cable providers built stronger protection against theft into new digital cable systems which were deployed beginning in the mid-1990s as part of the changeover to the new digital HDTV standard. This has greatly reduced cable theft.
Digital cable systems
In most modern digital cable systems the signals are encrypted, so cases of people obtaining illegal service are less common. The subscriber requires a set-top box provided by the cable company to decrypt and receive the cable signal. Unlike the older analog set-top boxes, the digital set-top box will not function until the cable company activates it by sending it a unique activation key through the cable, which is sent only after the subscriber signs up. Each set-top box is individually addressable, so a given box can be deactivated by command from the company if the subscriber fails to pay his bill (this is sometimes colloquially referred to as a "bullet"). A box only decrypts the channel being watched, so each box can only be used with one television, requiring subscribers to lease additional boxes at greater expense for multiple televisions.
One minor loophole is that the cable company has no way of knowing where a given set-top box is located, and once activated a box will function anywhere in the local cable system. Subscribers are often provided with several set-top boxes as part of their subscription, and can give or sell unneeded activated boxes to neighboring nonsubscribers who can use them in their own residences.
This system is dependent on the security of the encryption system chosen by the cable company in question. Old cable equipment used an analog signal that was scrambled by tuning the signal so the picture was unsteady, just as Macrovision does at an attempt to copy a video. The equipment would descramble the signal so that it can be viewed by the subscriber. It also is addressable, meaning that it can be remotely controlled by the company's technical staff. The first case covered by the media was when 317 subscribers were caught in 1991  when the company they subscribed to sent a "bullet" (a video signal that turns off the equipment) to their cable box. The boxes were modified, but possibly belonged to the cable company.