FCC chairman Tom Wheeler wants to free pay-TV viewers from the traditional set-top box.
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 fiberoptic video systems, the agency said Wednesday.
He 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[1]. "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, he said. 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 that same period. That adds up to $20 billion in fees that consumers pay each year, he said.
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.
"The promising slate of reforms proposed by (the chairman) could potentially allow consumers greater access to the content that they pay for, granting greater control over when, where, and how they want to access it, on the device they choose, without being locked into constant, unnecessary fees and excruciating installation and repair appointments," said Michael Scurato, vice president of policy for National Hispanic Media Coalition in a statement.
Companies such as Amazon, Google and TiVo -- each already involved in delivery of video and programming services -- support new rules, but content companies 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/DirecTV, Cablevision, Comcast, Charter Communications, Dish Network and Time Warner Cable. Those companies were among more than four dozen members of the Future of TV Coalition, a new industry group launched Wednesday.
New rules aren't needed because "with all the change and disruption already taking place in TV, this may be the most competitive and exciting marketplace in America," said coalition co-chair Alfred Liggins, CEO of TV One. "American consumers have never had more freedom to find and watch the shows they love in different ways – from a la carte, to smaller packages, to traditional or new Internet providers and above all the burgeoning marketplace for streaming devices and video apps."
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."
Follow Mike Snider on Twitter: @MikeSnider[5]
References
- ^ Re/code (recode.net)
- ^ #Competition (twitter.com)
- ^ #Innovation (twitter.com)
- ^ January 27, 2016 (twitter.com)
- ^ @MikeSnider (twitter.com)
