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How Cable Providers Work

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Cable providers use either coaxial or fiber optic cable to transmit any number of venues, like HDTV, television on demand, digital phone service, or high speed internet to your home. Many of the cable lines that deliver signals to you are run across city owned areas, like easements. Most cable providers enter into long term, exclusive contracts with the cities they service.
How Cable Providers Operate
Cable companies obtain signals in a couple of ways. They use cables to link to local networks and stations when they're close enough. This offers a high quality signal with no delays.
They use a network of satellites to obtain content too. A signal is aimed at the orbiting satellite and then transmitted to a dish at the cable company. For news, sports venues, and other time sensitive material, a mobile truck setup records an event and sends it to the satellite, which then sends the signal to the network or an editing hub on the ground. The edited information is then resent to the satellite and then transmitted to the cable company.
After your local cable company receives the signal, it's scrambled to reduce the chance of piracy and then disseminated via a network of cables and signal boosters. The cable that connects to your home is routed to a descrambling box. If you have cable in more than one room, the signal is split and sometimes amplified, depending on your unique setup.
Your cable box is more than a descrambling box, though. It identifies you within the cable network through a bidirectional signal. The box talks to the cable company and the cable company can control, troubleshoot and modify the settings in the box. Your access to premium channels and your ability to select pay-per-view options relies on this two way signal to operate. Another advantage to being "connected" is that the cable company can help you solve reception (or no reception) issues without always having to send a technician to your home.
Cable providers typically have grouped packages available for consumers that may include a variety of standard channels as well as premium channels. For extra services, like high speed internet or the addition of a DVR (Digital Video Recorder) to the box set up in your home, you'll pay extra, but bundling services will probably get you a better deal than if you just purchase a basic cable package.