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| (Photo: Andrew Harnik, AP) |
The days of the pay-TV set-top box may be numbered.
The Federal Communications Commission will vote later this month on rules requiring pay-TV providers to make free apps available that would work on other devices and video game consoles
Unlocking the set-top box has been an issue of emphasis for FCC Chairman Tom Wheeler , who brought up a proposal in January. The five-member commission voted 3-2 back in February to begin the rule-making process.
But Wheeler has shifted his strategy over the seven-month process. As initially proposed, new rules would spur pay-TV providers and third-party innovators to create apps and new methods that could bypass traditional boxes that serve to deliver signals to TVs.
After consulting with content companies, pay-TV companies, consumer groups, developers and others, Wheeler said in an editorial published in the Los Angeles Times Thursday that the rules, which he has circulated to the rest of the commission, should keep "the delivery of pay-TV programming ... overseen by pay-TV providers from end-to-end."
"If adopted, consumers will no longer have to rent a set-top box, month after month," he said. "Instead, pay-TV providers will be required to provide apps – free of charge – that consumers can download to the device of their choosing to access all the programming and features they already paid for."
The new rules would protect current copyrights and licensing agreements. Pay-TV providers must make the free apps available on all popular platforms including Android and iOS devices, Roku, Amazon Fire and video game consoles. Third-party developers could work with pay-TV providers for apps, too.
Apps will deliver all linear and on-demand programming available through standard set-top boxes. Using the apps, consumers will be able to search pay-TV content and content found on other Net TV services such as Netflix and Hulu.
Large pay-TV companies such as AT&T, Comcast and Verizon will have two years to provide new apps, Wheeler says. Medium-sized pay-TV companies will have an additional two years to comply, while smallest companies will be exempt.
The agency is following instructions from Congress, which in 2014 asked the FCC to increase set-top box competition. Collectively, consumers spend about $20 billion annually on equipment leasing charges for set-top boxes, each paying, on average, $231 each year, Wheeler says. (The agency and the industry still refers to the devices as set-top boxes even though popular flat-panel TVs no longer have the depth to rest the boxes on.)
Consumer groups, tech companies and software developers supported the proposal. However, pay TV providers argued that the FCC's original intention would be "unnecessary and unworkable," as AT&T and the National Cable & Telecommunications Association contend in a letter earlier this week with the agency.
That's because programmers, which license content for broadcast, would lose control of the content they had the rights, too. And pay-TV companies voiced concerns about the privacy of their subscribers' data.
Wheeler is on the right track, said John Bergmayer, senior counsel at consumer advocacy group Public Knowledge . "The modified approach the Chairman has described today addresses the legitimate concerns raised by these parties while preserving the benefits to the public, and fulfilling the Congressional directive that requires the FCC to ensure that viewers do not need to rent set-top boxes from their providers."
And TV lovers would be the beneficiaries of the FCC's work, should the proposal be approved, said Sen. Edward Markey , D-Mass. "Consumers have been waiting for twenty years for a truly competitive and robust set-top box marketplace that puts an end to exorbitant cable box rental fees, and the FCC’s order represents the dawn of a new era,” he said. “It’s time we add set-top boxes to the list of all of the other consumer technologies that have benefited from strong rules that fostered choice, innovation, and competition.”
However, not all on the commission are convinced that the rules are needed. Commissioner Michael O'Rielly, who along with fellow Commissioner Ajit Pai, voted against the initial rule-making process, has said the market is moving to apps on its own.
“I will review this proposal carefully over the coming days and weeks, but at the outset it appears to exist within a fantasy world of unlimited Commission authority," he said in a statement Thursday. "The Commission is and must remain in the business of licensing spectrum and infrastructure, not content.”
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