The Federal Communications Commission wants to liberate you from your cable company’s set-top box.
You probably didn’t even realize you needed to be freed from this tyranny. But that’s the message from FCC Chairman Tom Wheeler, who’s on a mission to make sure consumers have choices when it comes to their set-top box.
On Thursday, the FCC voted 3-2 to open for comment a proposal the chairman says will offer consumers cheaper and more innovative alternatives to the set-top boxes available from their cable companies.
Today, 99 percent of pay-TV subscribers rent set-top boxes and spend an average of $231 a year to lease these devices, according to a congressional study. This practice brings in about $20 billion a year in revenue to cable, satellite and telco operators. While prices for computers, TVs and mobile phones have dropped by 90 percent in the past 20 years, the FCC says pricing on set-top boxes has increased 185 percent.
“By introducing competition into the set-top market, as Congress has mandated, consumers will finally have options for how they access pay TV,” Chairman Wheeler said at a press conference Thursday. “Those competitive options will do what competition always does, which is drive better services and drive down costs.”
Consumer advocates have heralded the FCC’s efforts, but critics such as cable companies say an FCC mandate on set-top boxes could add costs, threaten consumer privacy and hurt smaller content producers. One thing is clear, the TV industry is in the midst of rapid change. To help you figure out what all this means, CNET has put together this FAQ.
What happened this week?
The FCC took its first big step toward potentially opening up the set-top market by voting to allow public comments on a proposal from Chairman Tom Wheeler that would require providers of pay TV to use set-top boxes that conform to open standards.
What does it mean for me?
Today, you have little to no choice in which set-top box you use to connect your TV to your cable service. Though additional features, like the ability to record shows, have been added to some boxes, not a whole lot has changed with these devices in the past couple of decades. What’s more, you still have to rent the device, dishing out $8 to $10 a month for each box in your house.
With new open standards for these devices, the FCC says you’ll pay less for set-top boxes and you’ll get more functionality. For instance, you could get a set-top box from Google or Apple that might offer more-robust search capabilities for content or a better user interface. It could also incorporate the ability to stream content from Internet applications, eliminating the need for yet another box like a Roku or a Google Chromecast.
When can I expect to see some changes?
This is just the very beginning. The FCC’s vote this week merely opened up the proposal for comment. There will be a long period during which interested parties and the public can comment. Then the FCC will have its final vote on the proposal. The earliest we might see something is by the end of summer, but that’s optimistic.
Deep-pocketed cable and phone companies, like Comcast and AT&T, are going to fight this. There will also have to be a standards process for actually determining how the technology would be put into practice. So it could take years before any actual changes are seen in the market.
Why does the FCC feel the need to pick this fight with cable companies?
Wheeler wants to change the monopolistic dynamic of the market by fostering openness and creating a situation where any company, including Apple, Google and Amazon, can create a set-top box. TV subscribers would then have a choice to lease a set-top box from the cable operator or buy it from someone else.
“Today there are closed standards controlled by the pay-TV industry,” Wheeler said. “We propose to open standards for set-top boxes the same way we have for Wi-Fi routers and other devices.”
Sounds like smart policy. How could anyone oppose it?
Cable operators and big phone companies offering TV service argue that the FCC’s mandates could add cost to their networks, which would be passed on to consumers.
The FCC’s previous attempt to open up the set-top box market, with its failed CableCard technology mandate, cost consumers more than a $1 billion, Comcast’s chief lobbyist, David Cohen, said in a blog post this week. Since the FCC abandoned this mandate innovation has flourished, he said.
“A new government technology mandate makes little sense when the apps-based marketplace solution also endorsed by the FCC’s technical advisory committee is driving additional retail availability of third-party devices without any of the privacy, diversity, intellectual property, legal authority or other substantial concerns raised by the chairman’s mandate,” he said in his post.
Opponents also highlight privacy concerns, since set-top boxes collect lots of consumer information and companies such as Google aren’t regulated the same way as cable and phone companies.
Some groups say it will hurt minority programmers. Groups like the Hispanic Technology & Telecommunications Partnership, which represents several national Latino organizations, fear that Google or other set-top box makers won’t honor agreements made between cable companies and channel providers, possibly making it difficult to find minority programming or inserting their own advertising, which could take revenue away from these programmers.
What does the FCC say about these privacy, cost and advertising concerns?
Wheeler said during a press conference that the “open” set-top boxes will work the same way set-top boxes work today, which should add no costs for pay-TV providers.
“That is why we have standards to define how it’s supposed to work and to give consumers choice,” he said.
As for privacy, he said that if consumers are satisfied with the security of their personal information by using apps on Roku devices or watching TV via apps on an iPad or an Android device, they should be satisfied with the level of security they’ll get via a set-top box.
“It’s the same story,” he said.
He added that set-top box operators will be prohibited from inserting additional advertising.
“No one will insert ads and create a split screen or a frame around your content,” he said. “We will require the sanctity of the content be passed through unchanged.”
Do we really need a set-top box?
Some experts, such as CNET Reviews editor David Katzmaier, say there’s no technical reason cable operators need to put any hardware in your home.
“There’s no need for warehouses full of cable boxes or arduous ‘service windows’ where the technician supposedly shows up ‘sometime between 11 a.m. and 3 p.m.’ — or not — to fix (or more likely just replace) your device,” Katzmaier wrote in a recent commentary on CNET. “Full-fledged pay TV service should just be an app, like Sling TV, that runs on your phone, your Roku or even the TV itself.”
This is the same point raised by Republican Commissioner Ajit Pai, who voted against the FCC’s proposal.
“Our goal shouldn’t be to unlock the box,” he said. “It should be to eliminate the box.”