In 1995 Disney dropped the pay-channel approach to turn the outlet into a basic cable service.

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Millions of cable customers have only the most basic service, sometimes with boxes that receive only traditional analog signals, which take up far more bandwidth than digital signals.

WSJ: Cable Must Air Broadcast Signals

This latest setback, of course, follows an FCC decision to allow companies to encrypt their basic cable channels -- the authorization was reportedly granted to cut back on service theft, among other concerns.

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The most likely outcome: a permanent stratification of Internet access into full-service, low-budget and no-cost tiers, similar to premium and basic cable.

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