FCC Chairman Shakes Up Cable TV Providers With New Proposal

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More Freedom For Cable TV Subscribers?

There is something brewing over at the FCC, and it is isn't just coffee. In fact, there is something afoot that may have a direct positive impact on Cable TV subscribers.

It looks like FCC Chairman Tom Wheeler has proposed the unthinkable, but logical, idea of giving Cable TV subscribers the ability to use after-market Cable Boxes and Cable DVRs for accessing Pay-TV services.

Although there will surely be some serious hand-wringing by Cable TV providers before such a proposal is adopted (let's face it, they are a strong lobbying group - so amendments are sure to come), the fact that the discussion has been opened up is a triumph in its own right. The government, for a change, may end up officially giving consumers more freedom on how they can access, watch, and record, TV program content.

The Existing Problem

The core of the problem, as seen by FCC Chairman Wheeler, is that the lack of competition in cable services (most cable companies are actually monopolies in many regions of the country), results in consumers being forced to pay high fees to rent cable boxes (the operative word here is "rent"). This is in the face of the fact that while the cost of just about every other consumer electronics product has gone down substantially, year-over-year, cable box rental fees have stayed stagnant or have gone up.

Also, as more cable systems go "all digital" - they are requiring subscribers to rent "mini-boxes" in order to receive TV programs that they were previously access via direct cable connection to their TV, even if they already have a digital TV.

The Possible Solution - What Has Been Tried Before

However, if consumers had the right to actually buy an after-market cable box that could access their content they want to subscribe to, overall monthly and yearly costs for consumers could actually go down.

Although something similar has been tried before - (remember the Cable Card?), it ended up with the cable companies still exercising too-much control over how it was implemented.

Possible Action and Aftermath

In addition to facing ever-growing competition from Streaming service providers, such as Netflix, Amazon, Vudu, Crackle, etc..., Cable TV providers would stand to lose a lot of revenue from those cable box rentals (unless they make pricing more attractive as a selling point). As a result, they could raise their other monthly fees to make up the difference - but that could also be a problem if the pricing structures offered by streaming service providers are a more attractive alternative.

Of course, all this also hinges on manufacturers jumping in to an after-market cable box market - if the forecast ends up not being profitable, you could see a lukewarm response and the cable companies would still be in control.

However, if the program is successful, not only would it increase consumer freedom, but makers of after-market cable box products (as well as the cable companies themselves) will be free to innovate new features designed to enhance TV program access that are essentially squashed under the current structure.

It is expected that a vote by the full FCC panel will take place on February 18, 2016.

Stay tuned as more info comes in...

Official Summary of FCC Chairman Tom Wheeler's "Unlock The Set-Top Box" Proposal

UPDATE 02/18/2016: As promised the FCC voted on February 18, 2016 to proceed with the next step in the "Unlock The Cable Set-top Box" proposal. For more details on the vote, and what happens next, read the report from Variety.

UPDATE 09/10/2016: FCC Chairman Wheeler Expands Proposal

The FCC Chairman has additionally proposed providing consumers the option of eliminating the need for a cable or satellite box via a requirement that cable/satellite providers offer downloadable apps that would provide cable box functionality, including pay and on-demand programing.

The apps would be compatible with Smart TVs and Blu-ray Disc players, as well as media streaming platforms, such as Roku, Apple TV/iOS devices, Windows/Android TV, and others...

For more details, read the Official Proposal Fact Sheet

Original Publish Date: 01/28/2016 - Robert Silva

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