The FCC passed a proposal Thursday to “unlock” your cable box.
It would clear the way for consumers to buy and use cable boxes from companies other than their cable provider and for companies like Apple, Amazon and Roku to deliver programming directly.
The proposal now heads to a comment period for businesses and consumers.
FCC head Tom Wheeler proposed the plan last month, saying it would help bring down cable costs. Cable companies have lobbied against it.
“Congress has given the Commission explicit instructions. Section 629 of the Communications Act requires the Commission to ‘assure the commercial availability, to consumers of multichannel video programming and other services offered over multichannel video programming systems, of converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.’ Put another way, when consumers connect to a pay-TV service they should have the same ability to choose their equipment, just as they do when signing up for phone service.,” Wheeler said Thursday.
“That’s not just what common sense and free-market economics tell us. That’s what the law mandates. But when it comes to the set-top boxes mandated by pay-TV providers, consumers essentially have no choices, and they are literally paying the price for this lack of alternatives. Today, the Commission begins the process of unlocking the set-top box marketplace and unleashing the benefits of competition. To understand the urgent need for action, you only need to look at the facts. Ninety-nine percent of pay-TV customers lease set-top boxes from their cable, satellite or telco providers. There is no competitive market, contrary to statutory mandate. U.S. consumers, are paying $231 a year to rent those boxes; collectively, these consumers are spending $20 billion annually. And, according to one analysis, over the past 20 years, the cost of cable set-top boxes has risen 185 percent while the cost of computers, televisions and mobile phones has dropped by 90 percent.
“One of these markets is competitive; the other is not. It doesn’t have to be this way.
“Consumers should have more choices for innovative ways to access video content on the device or app they prefer. By introducing competition into this closed market, today’s proposal will provide those options. Specifically, we propose establishing open standards for set-top boxes, the same way we have standards for cell phones, Bluetooth, Wi-Fi, routers, and other devices. Replacing closed standards controlled by the pay-TV industry with open standards will tear down the barriers that currently prevent innovators from developing new ways for consumers to access and enjoy their favorite shows and movies on their terms. The new rules would create a framework for providing device manufacturers, software developers and others the information they need to introduce innovative new technologies, while at the same time maintaining strong security, copyright and consumer protections.”
Walter McCormick, president of the USTelecom business group, said the decision is “unlikely to serve consumers or competition.”
AT&T also spoke out against the move.
“The Federal Communications Commission’s decision today to insert itself into how video should be delivered to American consumers is unlikely to serve consumers or competition.,” said McCormick.
“Access to video content is an arena where innovation, choice and competition from a broad range of competitors and technologies has radically changed how consumers view content in just the last few years. Consumers can now choose video content from a multitude of pay-TV providers, numerous online subscription services, watch on their smartphones and a host of other options. The FCC’s thumb on the scales will inevitably straightjacket innovation and harm competition, neither of which will serve the public interest.”
Bob Quinn, AT&T Senior Vice President of Federal Regulatory, added in a statement:
“A visionary might have started a proceeding today to ask how the consumer driven application economy could accelerate placing the set-top box onto the same path to the technology scrap heap as Black & White Televisions, Betamaxes, VCRs, iPods and Razr phones. The focus of that proceeding could have been how to eliminate the set-top box while protecting content creators’ incentives to develop interesting programming, building upon and growing the base of minority programming which exists today, and ensuring that what consumers watch on television remains none of Google’s business. Instead, the FCC launched a proceeding that could cement the set-top box in your home, with little to no minority programming, collecting data on every program you watch to feed Google’s advertising engine.
“As an added bonus, the FCC will have to establish an enormous regulatory infrastructure to create and oversee this new technology mandate that involves the creation of new technology standards and standards bodies.
“Talk about a missed opportunity. While consumers are embracing an apps-based approach that offers a variety of content on more than 450 million devices, the FCC has chosen to go down a path that threatens the very competition and innovation that has led to this vibrant marketplace. Concerns over this proposal have been expressed by both Democratic and Republican Members of Congress and a broad mix of stakeholders, including cable and satellite companies, broadcasters, independent and minority content creators and tech companies. As this proceeding continues, we hope these concerns are given the weight they deserve and the Commission allows consumers and not Google to continue to drive the market.”