FCC to Consider New TV Set-top Box Rules

In the age of apps, the Federal Communications Commission is set to wage a battle for the future of the old-school pay TV set-top box.

The five-member commission on Thursday is set to consider whether rules should be crafted that would require cable, satellite and fiberoptic TV providers to allow a new wave of third-party devices -- and software-based apps -- that consumers could use instead.

Pay TV providers and content companies have banded together to combat the proceeding, while consumer groups are joined in supporting new rules by companies such as Google, TiVo and Amazon that also deliver video and programming.

Today, consumers pay $20 billion annually to lease set-top boxes and that's too much, says FCC Chairman Tom Wheeler and other supporters such as Senators Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.). "A competitive marketplace could drive down costs," Wheeler says in his proposal, released last month.

Today, there is limited competition in set-top boxes. When competition exists, prices go down and innovation goes up.

Opponents argue that technology is already fostering new methods of getting programming and those set-top boxes that consumers lease are smarter than predecessors, letting consumers pause and rewind content, record multiple programs at once -- and access on-demand content.

Among issues raised by the opposition group The Future of TV Coalition in a media briefing Tuesday: the resulting multi-year process would increase costs, as well as ignite concerns about the privacy of new consumer data viewing threads -- and cut into revenue returns from content created by small and large studios.

"This is government assistance to allow one set of big tech commercial interests to get access to the intellectual property that belongs to others," said Michael Powell, President and CEO of the National Cable & Telecommunications Association, which is among the coalition members.

In December 2014, Congress directed the FCC to look into ways to increase competition in the set-top box market. These actions come amid a slow decline in the more than 80% of homes that get pay TV service -- thanks to consumer cord-cutting and cord-shaving.

At the same time, more than 80% of U.S. homes now subscribe to broadband Internet service, according to Leichtman Research. More than half of homes (57%) subscribe to a streaming service such as Netflix, the research firm estimates.

The FCC's move could result in consumers getting pay TV and streaming content via a smart TV, for instance, proponents say. "When consumers are able to access all their content – from MVPD programming to streaming video – in a single place, they will be better able to find and enjoy the programming most relevant to them," Wheeler says in his proposal.

The proposal could "help usher in a new wave of innovation," said Markey, who participated in briefing Wednesday with consumer advocacy group Public Knowledge and other supporters of the measure.

Should the commission approve the proposal, the agency will take public comment on the issue and craft rules that the commission can vote on. With such major companies as AT&T, Comcast and Verizon among the coalition opposing the possible rules, a court challenge is likely -- just as occurred with the FCC's net neutrality laws.

"It is too early to talk about lawsuits," and "it will take quite some time before rules are developed," said Powell, who served as FCC chairman for four years starting in 2001. "We would hope we could influence the outcome in a way that we can all live with. But we always reserve the right to seek redress for violations of the statute in federal court."

Leave a message 

Message List