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What am I missing here?

I mean, why not just not plug an ad box into the internet? Either use cable or a PC and voila, no ads.

Or are they somehow tying basic functions like displaying images sent to the port with ads?

You can still do that. Many do. But the next generation of TVs probably won't even deign to turn on without you giving them Internet access.

Lol yeah right

Ahh. ok..

Thanks!