Major pay TV providers are offering to let viewers ditch their rented set-top boxes for streaming apps in an effort to avoid proposed regulations that would open up the market for the devices.
The “Ditch the Box” plan includes a binding commitment by the cable and satellite companies to make the apps available in two years on an open platform that would allow customers to use them on a variety of devices they already own or could purchase.
Content on the apps would be searchable, allowing consumers to look for shows across platforms, including streaming services such as Netflix and Amazon, a major concession from the industry.
But pay TV programming could only be viewed within the provider’s app, addressing industry concerns that licensing agreements be protected and fears that device makers would try to insert ads to monetize the content.
The idea was pitched Thursday to officials at the Federal Communications Commission by a group that included executives from AT&T Inc., Comcast Corp. and the National Cable and Telecommunications Assn., according to a regulatory filing.
“Under the new approach, consumers who want to watch their pay TV service on different devices in the home could download a new pay TV app to the smart TV, tablet or other ‘connected’ device and start viewing without a cable set-top box,” the filing said.
FCC Chairman Tom Wheeler has proposed rules designed to spur competition for set-top boxes, which the average household spends about $231 a year to rent.
Wheeler was “heartened” that the industry proposal seeks to provide “greater competition and choice,” but more details are needed, said FCC spokeswoman Kim Hart.
“We will continue to work with all stakeholders to develop rules that allow innovation to flourish and ensure consumers have real options for accessing the pay-TV programming they purchase,” she said.
Wheeler’s plan would mandate new technology standards so manufacturers could develop rival set-top boxes that consumers could buy instead of renting from their cable or satellite provider. He hopes a generation of new devices would combine pay-TV access with Internet streaming.
The pay TV industry strongly opposes the proposal and has been rallying opposition on Capitol Hill. Set-top box rentals generate about $19.5 billion a year, according to a Senate study.
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