The Cable TV Converter Box: Freedom Now!

Sure, 500 channels might be fun, but do they really get you the best bang for your cable TV buck? Don’t you and your family also want better services for less money?

Then don’t just re-regulate the cable industry. Deregulate the cable TV converter box.

Only in America can you own your own TV set, telephone, personal computer, CD player and VCR but be legally prohibited from owning the cable TV converter box that sits in your living room. It’s time to tell the cable companies that it’s your living room, not theirs.

With virtually every media technology but that cable converter, you get an excellent array of price and choice. Why? Because they are the result of a competitive marketplace that rewards innovation and low-cost manufacturing. The cable converter, by contrast, is the feeble spawn of the pseudo-monopoly. It’s designed with the convenience of the cable company--not the consumer--in mind.

“Let a thousand converter boxes bloom,” former Federal Communications Commission Chairman Mark Fowler agrees. “This makes good policy sense: It would let consumers choose the box that’s best for them. . . . Right now, we have a monopoly cable provider dictating what the box is.”

To be sure, deregulating cable converter boxes shouldn’t become a sneaky way for people to illegally hook up to cable services, any more than buying a telephone entitles you to free long-distance calls. What’s so provocative, however, is that it might well be in the best economic interest of the cable companies to give up their virtual monopoly on converter boxes. Subscribers who only care about changing channels could buy the cheap converters made in Indonesia; those who want to play video games, retrieve movie snippets and do home banking could buy the top-of-the-line multimedia converters built by Apple Computer, IBM or Nintendo.

Indeed, just as AT&T; discovered that more telephones meant more people making calls, cable companies might find that more people might subscribe to more services if there were a greater variety of innovative converters. Don’t forget that the cable companies still get to control what programming comes down their cable. So long as they can protect the integrity of their signals, who cares who owns the box? Cable companies should publish the technical specifications that make open-architecture cable converter boxes possible.

“It would seem to me that this would be a very smart thing for them to do,” says Robert LaBlanc, a Tribune Co. director and former vice chairman of Continental Telecom who occasionally consults for cable companies. “It would promote competition and the faster introduction of new services. . . . I think the FCC ought to open up hearings on this.”

The cable Establishment, on the other hand, is something less than openly enthusiastic. “Unlike the Bell system,” National Cable Television Assn. spokeswoman Peggy Laramie says, “cable is not a common carrier. . . . Complete and open access does not fit with the heritage of cable.”

“While we do not react with revulsion to this notion, we’d oppose it,” says Robert Thomson, senior vice president of Tele-Communications Inc., the nation’s largest cable company. “Until this rapidly evolving environment is worked through by private industry, it’s too soon to set any timetables for standards or deregulation.” Thomson insists that market forces could bring about de facto converter deregulation so that government action is unnecessary.

Other cable companies seem more sanguine. “So long as we are able to own the descrambling circuits” it doesn’t much matter who owns the rest of the box, says Walt Ciciora, vice president of technology for Time Warner Cable. Indeed, Ciciora notes, Time Warner is also talking with companies such as Apple Computer about the future blend of computers and converters.

Of course, there are technical issues to be ironed out. But the fact is that the Cable Act of 1992 doesn’t go far enough in encouraging a vibrant market in this growing technological arena. The next FCC chairman should do right by consumers, the cable companies and American electronics companies by setting converters free.

Michael Schrage is a writer, consultant and research associate at the Massachusetts Institute of Technology. He writes this column independently for The Times.