The Federal Communications Commission has been stewing over a proposal that would shake up the cable set-top box market for months. They’ve got a vote on the final proposal coming up this week, but in the face of partisan bickering and opposition from the cable industry, the matter has become controversial. So today, a whole passel of folks called on the FCC to approve the measure ASAP, for consumers’ sake.
Here’s the background: the FCC voted in February to consider making a proposal that would open up the cable set-top box market. The argument goes that cable companies have a monopoly on the hardware they put in your home, and they charge high fees (and lots of ’em) on that equipment. Competitive markets have a way of increasing service and decreasing prices, so the market for tools you can use to connect to your cable service should be competitive.
The final proposal, announced earlier this month, takes an industry-favored approach to the problem: eliminating the set-top box in favor of an app that can run on basically any other major smart or streaming device you have in your home. Consumers would be able to choose between using the streaming app, which would be free, or continuing to rent a set-top box if that’s what they prefer.
MORE: The FCC’s final set-top box proposal: free apps and integrated search for all
The FCC estimates that the cable industry makes about $20 billion annually from box rental fees, so it will surprise basically nobody that industry stands strongly against the measure. In fact, within moments of commission chairman Tom Wheeler announcing a final proposal had been made, Comcast was already rehearsing its legal arguments about how an eventual rule would violate federal law.
Amid that background, there’s also drama inside the FCC on this one.
While most of the high-profile proposals of the last few years have been controversial, their outcome has usually been a foregone conclusion to political watchers well in advance of the final vote. Everyone “knew,” for example, that net neutrality would pass by a 3-2 vote by the time the FCC actually held its meeting on the measure.
But the set-top box proposal is that rare wild card in the highly partisan, politically charged DC atmosphere. The entire chattering class in tech and in DC once again knows that there are going to be two votes in favor (Chairman Wheeler and commissioner Mignon Clyburn) and two against (commissioners Ajit Pai and Michael O’Rielly) — commissioners basically said as much before Congress recently. But that leaves commissioner Jessica Rosenworcel as a swing vote that could make or break the plan.
The FCC is scheduled to vote to adopt, reject, or delay proceedings on the proposal on Thursday (Sept. 29), and so all that is the background against which members of Congress, minority programmers, and consumer advocates spoke today, urging the Commission to adopt, rather than delay, new rules when it meets.
Massachusetts Senator Ed Markey spoke first, saying, “Over the past 20 years, we’ve seen an explosion of choice and innovation in consumer electronics” in general, from mobile devices to computers to TVs. “But for two decades, there’s been no choice in the pay-TV video box marketplace. Consumers have no choice but to rent their box from their provider in perpetuity.”
Markey cited a report he and Sen. Richard Blumenthal (CT) had sponsored, which found that 99% of cable subscribers rent boxes, spending an average of $89 a year per box to the tune of $232 per year per household — not exactly pocket change.
“Consumers have been waiting for years for a marketplace that puts an end to exorbitant rental fees … the FCC rental-box order represents the dawn of a new era,” Markey said. “We want to unleash the same Darwinian, paranoia-inducing competitive forces” in this market as every other gadget market out there,” he concluded. “It’s the twenty-first century: consumers should be able to choose their set-top box the same way they choose their mobile phone.”
Markey was joined by his Senate colleague Blumenthal. “My hope is that the action by the FCC anticipated this Thursday will break open the market and will be a significant win for consumers, providing them with real and immediate relief,” Blumenthal said. But he also acknowledged reality, saying that “past is often prologue,” and pointing out that it will likely take strong enforcement to make sure that pay-TV companies don’t try to weasel out of the spirit of the rule while obeying the letter.
Rep. Anna Eshoo (CA) echoed her Capitol colleagues’ sentiment that the wait has been more than long enough, saying, “Here we are, on the cusp of the FCC finally taking up the issue that the American people have waited twenty long years for … A constituent said to me over the weekend, there are marriages that haven’t lasted as long as we’ve had to wait” for a cable box rule.
A spokesperson for the Writer’s Guild of America – West and Robert L. Johnson, founder of BET, also spoke to the benefits of the proposal for both consumers and diversity.
Visibility, both indicated, is a huge challenge for non-traditional programmers or programmers who reach niche audiences. The proposal, particularly the integrated search requirement, will create “a level playing field” for minority programmers, Johnson said. “Bringing in an app-based application that allows a consumer to pick what they want to see, when they want to see it, and where they want to see it, opens the door to the flow of diversity of content … this decision is the most important decision the FCC has ever made” for minority programmers and consumers.
Consumer advocates from Public Knowledge and our colleagues down the hall at Consumers Union (the policy and mobilization arm of our parent company, Consumer Reports) also spoke heavily in favor of the proposal.
Consumer Reports, Consumers Union deputy director David Butler said, often surveys readers as to how happy they are with their cable service and the value they get. And time and time again, everyone says they’re paying too much and aren’t satisfied.
This proposal should help, Butler said. “We think this is a good proposal, a pro-consumer proposal that’s going to help a lot of people and will boost choices and competition in a market where that has been seriously lacking for too long.”
Clearly, it’s striking a chord, he added. “Some 200,000 consumers have signed a petition in support of the FCC stepping up and helping people unlock the box … we really believe that with all of the advances that have been made in video services, consumers ought to have access to affordable, innovative products” by now.
“Consumers deserve better than what they have now… this is long overdue,” he concluded.
But of course, all those folks have been beating their drum, asking the FCC to act, for a long time. New to the arena? Retailers who, of course, can stand to make more money and get more shoppers coming in to browse the shelves if consumers’ cable needs aren’t filled by boxes shipped and installed by the cable guy.
Parker Brugge, a senior executive at Best Buy, said, “We believe chairman wheeler’s proposal will bring about greater innovation and competition, simply put. Innovation and competition ultimately benefit the consumer, so that’s how we view the issue… We look forward to greater competition in this area, again because we feel it will ultimately benefit the consumer.”
by Kate Cox via Consumerist
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