Federal regulators put the metal boxes most Americans rent to receive cable or satellite programming at the center of a high-stakes fight over the future of TV and video.
The Federal Communications Commission voted 3-2 Thursday along party lines to begin crafting rules intended to spur competition in the set-top-box market by developing technology standards so third-party devices and apps could decode pay-TV signals.
Such a move would let consumers purchase boxes from technology companies instead of renting them from their cable or satellite provider. The rules could open the door to all-encompassing devices and apps that combine pay-TV access with Internet streaming.
"The issue is whether you are forced to rent that box every month after month after month," said FCC Chairman Tom Wheeler, a Democrat, who proposed the rules.
"The consumers have no choice today," he said.
About 99% of the nation's 100 million pay-TV subscribers rent at least one set-top box, with the average household paying $231 a year in fees, according to a survey by Sens. Edward J. Markey (D-Mass.) and Richard Blumenthal (D-Conn.). That adds up to about $20 billion a year in revenue for pay-TV providers.
The rule-making process will be complicated. The FCC must grapple with difficult issues, such as network architecture, privacy of valuable data about consumer viewing habits and copyright protections for video content.
The FCC's decision, which stems from a 1996 law that requires the agency to ensure the commercial availability of pay-TV navigation devices, sets up a major fight.
On one side are Comcast Corp., AT&T Inc. and other pay-TV providers that oppose FCC open-technology mandates for set-top boxes.
The rules would break the hold providers have on their content, and they fear that would allow third-party device manufacturers to wrap advertising around programming or viewing guides.
The pay-TV companies prefer an approach focused on apps, such as the customized ones some providers are rolling out that allow subscribers to access programming from various devices and that could eliminate the need for set-top boxes.
Time Warner Cable already is testing an option in the New York City market that lets subscribers receive programming via a Roku device instead of renting a box.
On the other side of the issue are consumer groups and technology firms such as Google, TiVo and Vizio interested in developing new devices that would be able to combine pay-TV programming with other features, such as Internet streaming and expanded program guides .
"It's time to untether the consumer from that clunky, old box," Consumers Union said.
Supporters said the new rules could fuel competition that will increase consumer choices and drive down prices.
They point to past FCC actions that unleashed innovation by opening up closed networks.