Just when the FCC was ready to consider lifting the ban on encryption for cable’s basic tier, along came Boxee throwing a wrench into the works. Keeping the possibility of lifting the ban alive, the NCTA just offered the FCC some proposals for how cable could encrypt the basic tier and still accommodate Boxee and companies like it.

Cable would like to encrypt the basic tier, in large part to discourage service theft. Low-cost DTAs and retail devices that can incorporate CableCards have made it easier and more affordable to access the basic tier when encrypted.

The problem is that Boxee has built a box not only lacking these capabilities, but also resistant to adding them without significantly re-engineering the product or creating a kludge solution.

In June, Comcast and Boxee announced that they had devised such a kludge and informed the FCC of the fact.

Yesterday, the top six MSOs (as represented by the NCTA) informed the FCC that they would like to be able to offer either of the two options to Boxee and any other company with similar devices (which the NCTA is referring to as “IP-enabled Clear QAM devices”).

The MSOs said they would either adopt a kludge similar to the one Comcast and Boxee created, or would offer to “make publicly available the requirements necessary (including any authentication processes)” for such devices such as Boxee’s to access their basic service tiers.

The proposal is to have this agreement scheduled to elapse in three years unless the FCC decides to extend it.

Boxee hasn’t provided sales figures, but it has offered hints that suggest it is very unlikely that the company sold more than a few hundred thousand of its boxes.