Cable Set-Top Box Competition Delayed, Not Dead, at U.S. FCC

  • Chair cancels vote yet says ‘we expect to get something done’
  • Comcast, AT&T oppose plan that could help Roku, TiVo, Google

A planned vote to give consumers alternatives to renting a set-top box from their cable company was canceled Thursday by Federal Communications Commission Chairman Tom Wheeler, but he insisted the agency is still working on a proposal to pave the way for cheaper alternatives.

Wheeler, a Democrat, removed the proposal from the agency’s monthly meeting agenda, saying technical and legal details were still being worked out. Dropping a vote at the last minute can indicate deep discord at the FCC, where the chairman controls the agenda and leads a majority drawn from his political party.

“It was simply a matter of running out of time” in internal discussions, Wheeler said in a news conference after the meeting. “We expect to get something done.”

The plan, backed by the White House, aims to clear the way for less expensive devices to serve as in-home gateways to video programming. It would require cable companies to supply free online apps that can be used by the likes of TiVo Corp., Roku Inc. or Alphabet Inc.’s Google in gadgets that would become the in-home gateway to traditional channels and online shows alike.

The proposal drew opposition from cable TV providers and skepticism from one of Wheeler’s fellow FCC Democrats, Jessica Rosenworcel, who earlier said the agency lacked authority for overseeing apps as the chairman had proposed. On Wednesday, Wheeler was said to have offered to reduce FCC oversight in a compromise to attract support. He needs all three Democratic votes since both agency Republicans oppose the measure.

Unlocking the Box

“We have made tremendous progress -- and we share the goal of creating a more innovative and inexpensive market for these consumer devices,” Wheeler, Rosenworcel and Democratic Commissioner Mignon Clyburn said in a joint statement Thursday. They said they are still “working to resolve the remaining technical and legal issues and we are committed to unlocking the set-top box for consumers across this country.”

The FCC “made the right decision” in delaying action, David Cohen, executive vice president at top U.S. cable provider Comcast Corp., said in an e-mailed statement. “This is an extremely complicated and technical item that should not be adopted without the opportunity for expert and public input.”

US Telecom, a trade group with members including top telephone providers AT&T Inc. and Verizon Communications Inc., said in a statement it was “pleased the commission is taking more time to fully consider the complex technical and legal issues in this proceeding.”

‘Consumers Bilked’

Advocates for the change expressed dismay.

“Consumers are getting bilked more each day this drags on,” John Bergmayer, senior counsel at the Washington-based policy group Public Knowledge, said in an e-mailed statement.

Senator Edward Markey, a Massachusetts Democrat who has pushed for action, called the delay “an unequivocal loss for the tens of millions of Americans across the country who are forced to spend their hard-earned money on overpriced set-top box leases.” Markey said in an e-mailed statement the agency should complete the rule "as soon as possible.”

Hollywood studios and pay-TV providers led by Comcast and DirecTV owner AT&T called Wheeler’s proposal unacceptable because it would make the FCC an arbiter of licensing contracts.

Disney, Viacom

Before the vote, the TV and film industries said they’re fine with competition and finding new ways to distribute their programming. But they said Wheeler’s plan would slow movement toward making shows available via apps on tablets and mobile phones, because cable providers and content owners will struggle to satisfy federal licensing requirements.

Film and TV lobbyists, in a telephone call on Wednesday with a Rosenworcel aide, said they were opposed to “any involvement of any type by the FCC” in setting licensing terms and conditions, according to a disclosure filed with the FCC by a representative for the Walt Disney Co. Others involved in the call were representatives of Time Warner Inc., CBS Corp., Scripps Networks Interactive Inc., Viacom Inc. and 21st Century Fox Inc., according to the filing.

Wheeler earlier said 99 percent of subscribers rent boxes from cable and satellite-TV providers "because they don’t have meaningful alternatives.” Previous attempts to spur competition left consumers with devices that didn’t get all channels and were hard to install, with cable companies offering poor support, the FCC said in February, adding that consumers pay more than $231 annually to rent boxes.

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