FCC chair moves towards looser rules for set-top boxes

USA consumers spend an estimated $20 billion a year renting one or more set-top boxes from their cable and satellite TV providers, revenue that the FCC said dramatically exceeds the cost of providing the devices to pay-TV subscribers. An industry trade group opposes competition in the device market, saying it wouldn’t provide new programming or lower TV bills.

Today, 99 percent of pay-TV customers lease set-top boxes from their cable, satellite or telco providers. Wheeler cites an analysis which found that the cost of cable set-top boxes has risen 185% while the cost of computers, televisions, and mobile phones has dropped by 90%. Lack of competition has meant few choices and high prices for consumers – on average, $231 in rental fees annually for the average American household. “As a outcome, consumers have limited choices for commercially available set-top boxes, so an overwhelming majority of consumers lease a box from their pay-TV service that doesn’t interface well with the wealth of video content online”. Now the FCC wants to create a new standard that would let basically any device in your home access video programming over cable, and it’s going to be an uphill fight.

The National Cable & Telecommunications Association is opposing the proposal, arguing that cable companies already offer apps that let people stream programs to tablets, smartphones and devices like Roku. Third-party boxes such as TiVo and SiliconDust’s HDHomerun Prime make use of CableCard, a device that users can rent from their TV provider.

In an op-ed, FCC Chairman Tom Wheeler said new boxes could help you ditch extra remotes and better integrate content like Netflix and Amazon with a cable-TV feed, so that you can search for shows and movies across all your subscription services simultaneously.

This could mark just the beginning of a huge back-and-forth between the FCC and cable companies.

The cable industry has its own proposal in which TV providers would build their own apps and provide them as downloads for third-party devices. “Congress recogniszed the importance of a competitive marketplace and directed the Commission to adopt rules tha t will ensure consumers will be able to use the device they prefer for accessing programming they’ve paid for”.

Mindful of potential political controversy and even industry litigation that could erupt from fooling around with channel placement, on-demand access, place- and time-shifting, the FCC chairman is careful to note that the proposal doesn’t amount to “mandating a government-specific standard for these three information flows”.

The Wall Street Journal reports that the FCC wants to overhaul the rules governing set-top boxes.

“The FCC’s proposal has the potential to unlock the TV set-top box market, giving consumers relief and paving the way for cheaper, alternative choices, as well as creating more opportunities for independent and minority programmers”, said Rep. Anna Eshoo (D-Calif.), ranking member of the House Communications Subcommittee.