Tomorrow, at its monthly open meeting, the FCC will be voting on the most controversial rule it’s undertaken this year: whether, and how, to let consumers get out of paying their cable company a fee every month for mandatory set-top boxes.
We’ve been covering this saga since February, when the Commission first voted to start considering it. The final proposal chairman Tom Wheeler circulated would require all pay-TV providers (MVPDs, in the formal legal lingo) to make an app available to subscribers for free that would duplicate all the functions available in the traditional set-top box. Basically, the upshot would be that you could subscribe to “cable” service but actually be watching your Charter, Comcast, or other service over-the-top, through an app on your Roku, Apple TV, or any other widely-distributed device.
FOR MORE: The FCC’s final set-top box proposal: free apps and integrated search for all
Pay-TV providers collect somewhere between $13 and $20 billion in annual revenue from set-top box and adapter rental fees and, as you might imagine, are adamantly against the proposal… even though going app-based was originally the industry’s idea. Consumer advocates, the White House, and minority broadcasters are largely in favor. The five commissioners of FCC are themselves split and persuadable. And that leaves the political stage wide-open ahead of tomorrow’s vote.
To that end, several U.S. Senators have come out this week asking the FCC to approve the proposal for everyone’s sake.
In a call with reporters yesterday, Sen. Ed Markey (MA) said that while “Over the past 20 years, we’ve seen an explosion of choice and innovation in consumer electronics” in general, consumers are still stuck without choice in cable. “For two decades, there’s been no choice in the pay-TV video box marketplace. Consumers have no choice but to rent their box from their provider in perpetuity.”
“Consumers have been waiting for years for a marketplace that puts an end to exorbitant rental fees … the FCC rental-box order represents the dawn of a new era,” Markey said. “We want to unleash the same Darwinian, paranoia-inducing competitive forces” in this market as every other gadget market out there,” he concluded. “It’s the twenty-first century: consumers should be able to choose their set-top box the same way they choose their mobile phone.”
Markey was joined in that call by Sen. Richard Blumenthal (CT), who also called for the FCC to take swift action to approve the proposal, saying “My hope is that the action by the FCC anticipated this Thursday will break open the market and will be a significant win for consumers, providing them with real and immediate relief.”
Markey and Blumenthal are now joined by Minnesota Sen. Al Franken, who put out a statement on Facebook today urging the FCC to act.
“Set-top boxes. For those of you who don’t know, set-top boxes are those heavy and awkward devices that your cable company forces you to rent so you can catch a football game, watch your favorite show, or flip between channels,” Franken said. “Each American household spends on average $232 per year for the privilege to rent a set-top box, topping out at $20 billion each year in consumer fees that are siphoned straight to massive cable companies.”
“But that could all change soon,” Franken continued. “The FCC has said that it’s time to ‘unlock the box’ and give consumers a meaningful choice in how they access the content they pay for. Instead of renting one of those dust gatherers, consumers would be able to access the full content of their cable subscription via an app — just like Netflix, Hulu, or HBO GO — at no additional charge. That means you’d use the app with your smartphone, tablet, smart TV, or on a device like the Roku, Apple TV, Chromecast, or Amazon Fire Stick.”
He concluded, “Can you imagine how much easier that would be than the outdated way we’re doing things now? The FCC is voting on the proposal tomorrow, and I really hope they’ll side with consumers and vote to unlock the box.”
Sen. Ron Wyden (OR) also put out a statement today asking the FCC to approve the proposal. “Too often, I hear from Oregonians who lack real choices for reasonably priced cable packages, and who end up with exorbitant television bills that include mandatory set-top box rental fees,” Wyden began. “Fortunately, the FCC is taking a strong step to finally allow consumer choice in the set-top box market by creating rules that would allow Americans the ability to use the set-top box of their choice, promoting competition and innovation.”
He reviewed the financial burden that these fees — which, as we’ve noted, really pile up — place on consumers, and continued, “It is long past time to break the stranglehold Big Cable has over their customers through forced set-top box rental fees. Cable providers should not double dip on customers who are already paying monthly subscription fees for their content. The FCC should act, as directed by Congress, on its authority to create a competitive marketplace that will save consumers money and promote innovation in the industry. Oregonians and Americans should not be held captive by Big Cable’s price gouging. Consumers deserve to benefit from the increased choice and innovation Chairman Wheeler’s proposal would create.”
The clock, meanwhile, is ticking. The FCC’s meeting begins at 10:30 a.m. (Eastern time) tomorrow.
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