In a vote along partisan lines, the FCC today launched a rulemaking effort that could end cable and satellite companies’ near-total control over their customers’ set top boxes. It’s already kicked off a vigorous debate pitting tech companies and consumer advocates who support the change against pay TV distributors and Hollywood studios who oppose.
Chairman Tom Wheeler says that competition will help to reduce consumer payments for boxes, and clear the way for new ones that might make it easier for pay TV customers to access Internet-delivered programming — for example from Netflix, Hulu, and Amazon Prime.
“This issue is not complex,” he adds. The 1996 Telecommunications Act “explicitly instructed us to assure that there are competitive information devices, be it a box or an app.”
He lamented the opposition of the FCC’s two Republican members — Ajit Pai and Michael O’Rielly — saying that this is just “the beginning of an information gathering process.” The dissenters “have made up their minds before all the facts are in and efforts are made to work on issues that have been identified.”
He also attacked what he called the “red herrings” opponents have offered, for example charging that the move would require consumers to have multiple boxes, facilitate copyright violations, or undo programming agreements.
About 99% of pay TV customers lease boxes from providers, paying about $20 billion a year.
“Costs are high. Innovation is slow. And competition is too limited,” Commissioner Jessica Rosenworcel says.
Another commissioner supporting the change, Mignon Clyburn, said that it might help minority-owned programmers by enabling them to “reach consumers directly” via Internet-distributed TV channels.
In opposing the motion, Pai said that the FCC’s goal “should not be to unlock the box. It should be to eliminate the box.”
The move to open competition “takes a 20th century approach to a 21st century problem.” Previous efforts to open the market, for example with a smart card technology known as a CableCard, “have raised the price of set top boxes….The failure of the FCC’s policies is what brings us here today.”
It also could take years to implement a change, and “technology could render all of that work obsolete.”
O’Rielly also called set top boxes “a relic of the past.” With competition, the FCC might expose pay TV companies “to network damage and content theft.”
Following the vote, Comcast Senior EVP David Cohen said in a blog post that the FCC had “chosen to ignore the many voices of reason and instead to pursue a proposal that strays well beyond the FCC’s authority under the Communications Act, and would violate copyright and other statutory and constitutional protections.”
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