In 1982, Home Box Office (HBO) had a problem on their hands. HBO used satellites to distribute their programming to cable companies across the US. Cable companies would pick up HBO with a large dish, then scramble the signal and distribute it to paying cable subscribers. The subscribers, who paid $8/month (in 1982 dollars) for the privilege of receiving HBO, received a set top descrambler box for HBO. The problem was the two to three million people with backyard satellite dishes who received HBO without paying. A bigger problem yet was that hotels and other establishments in Caribbean and Latin American countries that received HBO at no cost, and then freely redistributed it. The paying customers became resentful of all the freeloaders. HBO was plagued by complaints, and knew they must take action. They decided to scramble their original signal at their head end. HBO released a Request for Proposal for a scrambling system.

HISTORICAL PERSPECTIVE: HBO IMPLEMENTS SCRAMBLING