Google Versus Cable Clash Fixed as U.S. Moves on Set-Top Box

  • FCC Chairman Tom Wheeler said to seek vote on new standards
  • Most subscribers rent boxes from their video provider today

Regulators are moving to help give pay-TV customers alternatives to renting set-top boxes from their video suppliers, setting up a battle pitting new tech giants including Google Inc. against established providers led by Comcast Corp. and AT&T Inc.

U.S. Federal Communications Commission Chairman Tom Wheeler said in an e-mailed statement he is proposing new technical standards designed to spark a market for set-top boxes that could be sold independently at retail outlets. Wheeler will seek a vote from fellow commissioners at the Feb. 18 meeting to begin a formal rule-making, leading to a final vote later. The FCC began considering the change last year.

“Ninety-nine percent of pay-TV subscribers are chained to their set-top boxes because cable and satellite operators have locked up the market,” the FCC said in an e-mailed statement. “Lack of competition has meant few choices and high prices for consumers.” Subscribers pay $231 in rental fees annually, the agency said.

An industry coalition said Wheeler’s proposal would increase consumer costs and strip viewers of privacy protections. “This is a solution in search of a problem,” the Future of TV Coalition said in an e-mailed statement. The group lists members including Comcast, AT&T, Dish Network Corp. and the Motion Picture Association of America representing Hollywood studios owned by Viacom Inc., the Walt Disney Co. and 21st Century Fox Inc.

Google Filing

Google, which has been urging the FCC to act, said in a filing that the changes would promote competition and spark innovation. Set-top box maker TiVo Inc. said new rules could clear the way for boxes that let viewers switch between cable channels and online fare such as videos from Netflix Inc., an ability lacking in the boxes most subscribers rent today.

The cable industry, which makes an estimated $19.5 billion a year renting the boxes, says technology companies could ignore distribution deals as they rearrange or drop channels. The claim came in filings this month from the National Cable & Telecommunications Association, a trade group with members including biggest U.S. cable company Comcast. AT&T, with 25.4 million video subscribers and owner of largest direct-broadcast satellite service DirecTV, has said the FCC shouldn’t write new rules.

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