FCC Votes to Dismantle Cable's Monopoly Over The Set Top Box

from the unlock-the-box dept

The FCC voted 3-2 today to begin dismantling the cable industry's long-standing monopoly over ye olde set top cable box. As noted previously, the FCC is pushing a proposal that would require cable operators make their programming accessible to third-party set top manufacturers, without requiring the use of a CableCARD. The goal is to create competition in the set top box market, giving consumers a choice of better and cheaper gear, in the same way consumers can buy their own cable modems. 99% of consumers currently pay about $231 annually in rental fees for hardware that's generally worth about half that much.

Note this morning's vote simply sets forth a notice of proposed rulemaking (NPRM) that won't be voted on and fully revealed to the public until later this spring. The NPRM also indicates that cable operators will have two years from full approval to implement the changes. Assuming, that is, the elections don't end up with a totally revamped FCC that reverses the plan.

As you might expect, the cable industry has been engaged in hysterical, breathless protest against the FCC's proposal, since it would instantly demolish around $20 billion in captive revenue cable providers enjoy every year. The industry's also well aware that third-party set tops will be much more likely to include streaming services that compete with cable, accelerating cord cutting as the nation's Luddites suddenly realize they don't need to pay $150 a month for five hundred channels of garbage they don't actually watch.

But the industry can't just come out and admit these obvious motivations, so they've turned to the usual practice of farmed outrage in editorial sections nationwide. Including the creation of the Future of TV Coalition, which calls itself a "diverse group of programmers, content creators, civic groups and television providers" who've joined forces to "celebrate and promote the thriving innovation" going on in the cable industry. This group has been making the rounds trying to argue that set top box competition would destroy the universe as we know it, harm innovation, damage consumer privacy, and even hurt minorities.

On the heels of the vote, the group was quick to fire out an e-mail statement blaming "big tech" for the FCC's plan to...secretly make life hell for American cable consumers:
"The massive outpouring of opposition to this costly and destructive rule from members of congress, the creative community, TV distributors, and public advocates reflects a basic truth: the rules under consideration will drive up consumer costs, hurt programmers (and most especially small and diversity programming), and blow a gaping hole in Congressional protections for our TV privacy – all for an unnecessary government giveaway to Big Tech. In short, this rule does not make sense.
Ahead of his dissenting vote this morning, former Verizon regulatory lawyer turned FCC Commissioner Ajit Pai was quick to parrot many of these claims:
"Among Pai's concerns were what he said could be the advserse impact on programmers, including on diverse programmers. "[N]othing in this proposal would prevent a set-top box manufacturer from replacing the commercials in a television show with commercials sold by that manufacturer. And nothing in this proposal would prevent a set-top box manufacturer from adding commercials to a program," he said."
This idea that "big tech" companies like Google and TiVo will come in and intentionally filter out minority programming is something the industry has been scare-mongering over for weeks, but there's no evidence of this actually being a threat. Logically, broader access to cheaper, better hardware would be good for all consumers, as would access to a broader array of streaming options, layered on top of existing content. FCC boss Tom Wheeler was quick to state that these claims are "red herrings" being pushed by an industry that's perfectly happy with the status quo, and that nothing in his plan puts existing content or business relationships at risk:
"There is nothing in here that allows third parties to disaggregate cable content or sell advertising around it... It takes the same system that goes to the cable box today with the same structures and moves it through a different box requiring the same structures. As a result, existing copyrights and programming agreements are unaffected, consumer privacy is protected, emergency alerts are passed through and child protection laws are unaffected. Nothing in this proposal slows down or stops cable innovation."
While the cable industry's opposition is by and large bullshit, there are some lingering questions with the FCC's well-intentioned plan. One, the plan will require an awful lot of effort, political fighting, enforcement and FCC man hours to revamp a technology that Internet video will likely make irrelevant in the next decade anyway. And once implemented, providers will likely look to simply recoup that lost revenue from broadband users in uncompetitive markets in the form of more fees, usage caps, zero rating and other potentially anti-competitive behavior. Behavior the FCC has been turning a blind eye to -- to focus on the cable box.

Following that line of thinking long term, it may have been wiser for the FCC to focus its energy and resources on broadband competition, and leave the cable box for dead as the vultures begin to circle overhead.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Feb 18th, 2016 @ 3:58pm

    Number of times the legacy cable monopolies have been right about something:

    reply to this | link to this | view in thread ]

  2. identicon
    Nobody, Feb 18th, 2016 @ 4:12pm

    Finally

    reply to this | link to this | view in thread ]

  3. identicon
    KRA, Feb 18th, 2016 @ 4:45pm

    It was the box rental fees that led me to cut the cord years ago. They were comparatively small but they galled me. Now I get plenty of content without cable, and I will never, ever go back. Pigs get fed; hogs get slaughtered.

    reply to this | link to this | view in thread ]

  4. identicon
    Anonymous Coward, Feb 18th, 2016 @ 4:54pm

    Have no fear! The benevolent cable companies will graciously convert the rental fees into broadcasting fees for no extra charge*!


    *Extra charge may apply.

    reply to this | link to this | view in thread ]

  5. identicon
    JBDragon, Feb 18th, 2016 @ 4:55pm

    Re:

    ZERO!

    reply to this | link to this | view in thread ]

  6. identicon
    That french anonymous, Feb 18th, 2016 @ 6:17pm

    "celebrate and promote the thriving innovation" going on in the cable industry.

    the legacy industries are PR mouthful of how they support and provide "innovation" these days. If noone coined a term for it yet, i'd like to submit "innowashing"

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, Feb 18th, 2016 @ 8:16pm

    We have the same issue in Portugal.

    reply to this | link to this | view in thread ]

  8. identicon
    Anonymous Coward, Feb 18th, 2016 @ 9:47pm

    Following that line of thinking long term, it may have been wiser for the FCC to focus its energy and resources on broadband competition, and leave the cable box for dead as the vultures begin to circle overhead.


    The funny thing is, I suspect this might partially be an attempt by Wheeler to save the cable industry from themselves. The way technology and consumers are currently headed, we're going to end up with either one box people own that handles OTA TV, DVR, and internet streaming apps and one box they rent that handles cable and maybe DVR; or one box they own that handles internet streaming apps, and one box they rent that handles cable and DVR. In either case, people will become more and more likely to get rid of the cable box (and cable TV with it), as they use it less and less, and it constantly costs them money to keep hardware they don't fully control around.

    Forcing the cable companies to open things up to third party cable boxes on the other hand changes the direction of technology. Technology will be moving towards either one box that handles OTA TV, cable, DVR, and internet streaming apps; or one box that handles cable, DVR, and internet streaming apps. Either way, people will no longer have a box uselessly sitting around costing them money, which will lower their incentive to cut the cord. Even better, whether they use a Tivo, a Roku, a video game console, or something else, cable TV will be better integrated with internet streaming than ever. Helping pave the way for TV channels to survive by becoming more like Youtube channels, or Twitch channels.

    But of course as usual rather than listen to what they have to say, the cable industry prefers to keep their fingers in their ears and spit in the face of someone who has seen the writing on the wall.

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, Feb 18th, 2016 @ 11:15pm

    OH look, Idiot Paid spouting bullshit fed to him from his corruptors.

    Film at 11.

    reply to this | link to this | view in thread ]

  10. icon
    Ninja (profile), Feb 19th, 2016 @ 4:16am

    I have yet to see a spoiled kid whining as much as these guys...

    reply to this | link to this | view in thread ]

  11. icon
    Chris-Mouse (profile), Feb 19th, 2016 @ 6:03am


    And once implemented, providers will likely look to simply recoup that lost revenue from broadband users in uncompetitive markets in the form of more fees, usage caps, zero rating and other potentially anti-competitive behavior.


    It's also possible that when this does happen, it will provide the FCC with more ammuntion for forcing the cable companies to share their last mile infrastructure with other companies.

    reply to this | link to this | view in thread ]

  12. icon
    Teamchaos (profile), Feb 19th, 2016 @ 6:11am

    Really Karl?

    The industry's also well aware that third-party set tops will be much more likely to include streaming services that compete with cable, accelerating cord cutting as the nation's Luddites suddenly realize they don't need to pay $150 a month for five hundred channels of garbage they don't actually watch.

    Sorry Karl, calling those of us who still subscribe to cable Luddites is a hot load of elitist crap.

    Some of us happen to like the content we get over cable/UVerse/satellite AND we subscribe to streaming services for additional content. Yes, we're sick and tired of paying rental on the cable boxes. I dropped DirecTV and will never subscribe again because they extended my contract when I added an additional box. I cancelled cable and went back to UVerse after one week because the cable boxes from Charter were absolute warmed over junk. I'd love to be able to buy my own box to stream/DVR cable.

    I agree with the poster that said this will be good for the cable companies by keeping them relevant in an age of cord cutting by including cable content on boxes that offer other streaming services.

    It will be good for cable companies if it forces them to offer more channels/bundles individually. I.e. I'd drop 300 channels of worthless junk I never watch if I could get the sports channels I want without them.

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, Feb 19th, 2016 @ 7:44am

    Pai is such a tool.

    "[N]othing in this proposal would prevent a set-top box manufacturer from replacing the commercials in a television show with commercials sold by that manufacturer. And nothing in this proposal would prevent a set-top box manufacturer from adding commercials to a program,"

    The thing is most cable boxes now are loaded with ad-ware, and when someone tries to remove commercials (Dish/AdHop) they get sued. It's such a blatant misinformation campaign that they can't even get their own facts straight.

    reply to this | link to this | view in thread ]

  14. icon
    WDS (profile), Feb 19th, 2016 @ 7:48am

    Up Again

    My DirecTV bill just went up another $8.00/month. For my HD DVR I paid them $200 up front. Monthly I then get to pay them $10.00 to use the HD portion of it, and $10.00 to use the DVR portion of it. There is also a $7.00 a month rental fee for the machine, but they give me a $7.00 credit for the first TV.

    When DirecTV started you bought your receiver elsewhere and just got the service from them. You had your choice of RCA, Sony, or Hughes receivers. Somewhere along the line they looked at the Cable gravy train and decided to hop on board. I guess they didn't realize that many of their customers came because they were ticked off with cable. Those customers are now ticked off with DirecTV and looking to find a good alternative.

    reply to this | link to this | view in thread ]

  15. icon
    Wickedsmack (profile), Feb 19th, 2016 @ 8:52am

    This is brilliant

    This is a damn good idea actually, if the major companies embraced this I think they could shift to a more modern paradigm with better services....oh wait...there isn't as much money in that...last mile is hard....infrastructure stuff... Really I don't want to live in a world where interent is capped, speeds are crap and its overpriced, I would love to see that become not a thing. I think cable providers would do just fine if if they went to a more streaming based system for on demand TV consumption. Sure some crap channels are going to die...which is fine because they are crap.

    reply to this | link to this | view in thread ]

  16. identicon
    Anonymous Coward, Feb 19th, 2016 @ 12:44pm

    remember, everyone wants $

    Whether it's the cable companies or the 'big tech' companies making the cable boxes, everyone wants to get paid.

    Being able to chose which between different manufacturers for cable boxes SHOULD mean that I can Buy the cable box, instead of Renting it.
    The cable companies could have prevented this current backlash by just selling the stupid cable boxes in the first place, but they are too greedy--and want perpetual payments in the form of rental fees. I'm looking at you too Adobe.

    reply to this | link to this | view in thread ]


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