The FCC chairman Tom Wheeler wants to give consumers the choice to select their own TV cable box, instead of being forced to lease one from the cable company. Wheeler is targeting a vote next month by the five-member Federal Communications Commission on a proposal to overhaul the rules for set-top boxes that connect to cable, satellite and fiber-optic video systems.
Basically the FCC has dropped a bomb on the cable industry – there had been rumbles about this for weeks, but basically no one knew it was coming as fast or as furiously as it did. Most of the companies we talked to yesterday were still in ‘no comment’ mode – even tech companies that should be cheering any idea that gives them access to the linear TV services that have been out-of-reach for almost a decade now. It will take the industry a while to figure out where they stand.
Wheeler envisions an energized marketplace with video providers pursuing alternative methods such as app-based video delivery via tablets, smart TVs or Net TV boxes such as Amazon Fire TV and Roku devices to compete with the standard set-top boxes that many consumers lease as part of their current pay-TV service.
“My proposal will pave the way for a competitive marketplace for alternate navigation devices, and could even end the need for multiple remote controls, allowing you to use one for all of the video sources you use,” said Wheeler in an editorial on tech news site Re/code. “Innovation will drive more options for user-friendly menus and search functions as well as expand access to programming created by independent and diverse voices.”
Nearly all pay-TV customers (99% of them) lease set-top boxes, paying on average $231 each year. The $7.43 average monthly charge for a set-top box has risen 185% since 1994, wheeler said, three times the increase of the Consumer Price Index over the same period. That adds up to $20 billion in fees that consumers pay each year.
Consumers may be overpaying $6 billion to $14 billion annually for set-top boxes, according to the ‘Consumer Federation of America’, one of several advocacy groups – along with Common Cause, Free Press and Public Knowledge – that have argued for increased competition in the set-top box market over the past several months as the FCC has studied the issues. And Congress in December 2014 directed the FCC, which regulates cable and pay-TV systems, to look at ways to do so.
Companies that don’t support the new rules such as Disney, Fox, Time Warner, NBC Universal and AMC argue that the rule changes could violate studios’ copyrights and degrade the overall viewing experience. Other losers could be companies that lease a lot of set-top boxes including AT&T/DirectTV, Cablevision, Comcast, Charter Communications, Dish Network and Time Warner Cable.
Not all advocacy groups agree that reforms are needed and some say that independent and minority programmers could get pushed aside amid the transition to new equipment that would require additional consumer spending.
The proposal is about “consumer choice,” says Wheeler, who expects the proposal to be voted on at the commission’s February 18 meeting. “It’s time to unlock the set-top box market – let’s let innovators create, and then let consumers choose.”
Read Article (Mike Snider | usatoday.com | 01/27/2016)
For those that voiced opposition to the reforms, take note of their explanations. In the final analysis, if they believe what they say is true, they have nothing to worry about and consumers will choose to stay with them. Which I doubt.
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