The Federal Communications Commission has taken the first step to opening up the pay TV set-top box marketplace.
The five-member commission Thursday voted 3-2 to begin the process of crafting possible rules that could give consumers new devices and apps to access and manage pay-TV programming and other content. The vote went along party lines with Chairman Tom Wheeler and commissioners Mignon Clyburn and Jessica Rosenworcel (Democrats) voting to approve, while commissioners Ajit Pai and Michael O'Rielly voted against.
Congress in 2014 instructed the agency to increase set-top box competition and Wheeler has argued that such action could decrease costs for consumers. "Consumers deserve a break and a choice," he said prior to Thursday's vote.
Set-top box rental fees coast consumers more than $200 annually, Rosenworcel noted, adding that the "clunky set-top box and its many-buttoned remote have not evolved at the same pace" as smartphones.
Pai commiserated with consumers, saying that he owns three set-top boxes and admitting "they are clunky and expensive and I feel the pain each and every month when I pay my bill."
However, he said the goal of the proposal is misguided because technology actually has allowed consumers choices beyond pay TV. "Our goal should not be to unlock the box; it should be to eliminate the box. If you are a cable customer and you don’t want to have a set-top box, you shouldn’t be required to have one," he said. "This goal is technically feasible, and it reflects most consumers’ preferences—including my own."
Implementation of approved rules could take more than three years, he said. "Just think about what three years means in the dynamic video marketplace. Thirty-six months ago, there was no such thing as the Google Chromecast or Amazon Fire TV Stick," he said.
Even if the rules are enacted and pay TV providers open their system to third-party devices and apps, Pai said, "technology could render all of that work obsolete by the time it’s ready to roll out."
Opposition group The Future of TV Coalition, members of which include AT&T, Comcast and Verizon, as well as the National Cable & Telecommunications Association, has promised to fight new rules with legal challenges if necessary. Concerns raised include protection of consumer privacy and the intellectual property of the content delivered via pay TV systems.
"We believe that once the Commissioners review a full record reflecting these harms, they will determine that this kind of technology mandate is both destructive and wholly unnecessary," the group said in a statement released after the event.
Consumer choice is evolving in the current marketplace, said Randolph J. May. He is the President of the Free State Foundation, a free market think tank. "You don't need to be a videophile to know that consumers now have many video choices available other than the traditional cable, satellite, and telephone video offerings," said May.
The FCC has begun the process of establishing an "ill-conceived proposal for a costly new government-mandated and government-designed video navigation device... another prime example of regulatory policy run amok."
Consumer advocacy groups support new rules. "Users will benefit, and the law, the business case, and the technological realities all support the FCC's proposal," said John Bergmayer, Senior Staff Attorney at Public Knowledge in a statement.
In a separate measure, the commission also voted to look into barriers that producers of independent and diverse programming face in getting on pay TV systems.