FCC Takes On Cable Box Rentals, Political Ad Disclosures And Slow Broadband Deployment
It’s been a busy week for the Federal Communications Commission (FCC) and an unpleasant one for cable and broadband providers, who under regulations proposed by the agency this week will have new competition in the set-top box market and be required to speed up the deployment of their Internet networks and publish more information about the political ads they and other media run.
Agency Chairman Tom Wheeler announced on Wednesday a plan to make cable TV providers give access to their content through third-party devices — a proposal aimed at giving Americans more options than simply paying a monthly rental fee to companies like Comcast or Verizon for proprietary set-top box devices.
Cable TV customers would have the option of accessing the content they pay for on a new market of competitively built third-party hardware, and have the option of owning the device instead of paying a monthly hardware fee, bringing down the monthly cost of cable access. U.S. consumers in total spend $20 billion a year on rental fees.
The FCC made a similar move in the telephone market nearly five decades ago.
“This week, I am sharing a proposal with my colleagues to tear down the barriers that currently prevent innovators from developing new ways for consumers to access and enjoy their favorite shows and movies on their terms,” Wheeler wrote in an op-ed.
According to the chairman, 99 percent of pay-TV subscribers lease their set-top boxes and on average pay $231 annually to do so. The cost of those devices has risen 185 percent, while the cost of computers, TVs and mobile phones has dropped 90 percent.
“The new rules would create a framework for providing device manufacturers, software developers and others the information they need to introduce innovative new technologies, while at the same time maintaining strong security, copyright and consumer protections,” he continued. “Nothing in this proposal changes a company’s ability to package and price its programming to its subscribers, or requires consumers to purchase new boxes.”
Tech developer coalitions like the Computer and Communications Industry Association celebrated the move.
“Unleashing the power of an open marketplace allows the competition which fuels innovation and drives down prices,” CCIA president Ed Black said in a statement. “To date, third-party device manufacturers have essentially been locked out of the set-top box market. With this effort, the FCC hopes to change that.”
The cable lobby and conservative tech groups were unenthused, arguing the proposal will make access more expensive, and open up cable providers to copyright theft through devices capable of illegally recording and distributing content.
“Getting the government involved in product design is a terrible idea,” TechFreedom policy counsel Tom Struble said in a statement. “Mandating that MVPDs [multichannel video programming distributors] change their technology is costly and may subject their content to widespread piracy.”
Struble argued such competition already exists in the form of video streaming providers like Netflix, Hulu and Amazon.
“There are better ways to promote competition in video markets,” Struble continued. “Instead of selectively focusing on the marginal issue of set-top boxes, the FCC should focus on making broadband deployment easier and promoting facilities-based competition at the local level between MVPDs.”
The FCC did address broadband deployment by voting to approve its 2016 Broadband Progress Report during Thursday’s monthly open meeting. The report found 34 million Americans lack access to acceptable Internet speeds, and concluded “advanced telecommunications capability is not being deployed in a reasonable and timely fashion to all Americans.”
While Republican Commissioner Michael O’Rielly slammed the report, his lone partisan colleague Commissioner Ajit Pai, agreed, but spun the blame on the Obama administration instead of broadband providers, arguing stimulus spending and subsidies did not help, and that the FCC’s net neutrality plan discouraged providers from investing in network growth.
“Perhaps surprisingly to some, including myself, I agree with the majority’s end result,” Pai said. “After seven years, $63.6 billion spent, and plenty of talk, this administration’s policies have failed to deliver ‘advanced telecommunications capability’ — broadband — to the American people in a reasonable and timely fashion.”
In a third major move, the agency voted to lump cable, satellite and radio in with broadcast TV stations into a requirement to disclose information about the political groups purchasing advertising on their platforms. The aforementioned media were previously only required to keep physical records in their offices.
“This kind of requirement may have made sense in the ‘Mad Men’ era, but it makes no sense in the digital age,” said Democratic FCC Commissioner Jessica Rosenworcel, who voted in favor of the change along with three other commissioners and Pai, who assented in part.
The order is aimed at giving watchdogs and journalists easier access to information about what groups are responsible for what advertising, where, and how much they’re spending. The requirement should take effect before the end of the current election cycle.