FCC chief proposes freeing Americans from getting pricey set-top boxes from TV providers
Federal Communications Commission Chairman Tom Wheeler plans to give people more choices when it comes to buying or renting a cable box.
Americans spend an estimated $20 billion a year renting one or more set-top boxes from their cable and satellite TV providers, revenue that the FCC said dramatically exceeds the cost of providing the devices to pay-TV subscribers.
“Lack of competition has meant few choices and high prices for consumers -- on average, $231 in rental fees annually for the average American household,” Wheeler said in a statement distributed Wednesday.
Wheeler’s proposal will be circulated among the four other FCC commissioners, who are scheduled to vote on it Feb. 18. His initiative calls for creating new standards for companies designing TV navigation devices.
Copyright issues and security concerns by the pay-TV companies have limited the market for device makers. Cable and satellite TV providers typically steer subscribers to their own products and charge a monthly fee.
That fee has long been a sore point for many consumers.
“If you’ve ever signed up for a $99-a-month bundle for cable, phone and Internet and then wondered why your bill is significantly higher, this is a big reason,” Wheeler wrote in an opinion piece published on the technology news site Re/code.
“Over the past 20 years, the cost of cable set-top boxes has risen 185% while the cost of computers, televisions and mobile phones has dropped by 90%,” he said.
Consumer advocates cheered the move, but one former FCC official questioned the wisdom of creating a framework with regulations for device makers.
“With regard to regulating set-top video navigation devices, the FCC appears intent, like Captain Ahab, to keep pursuing the big White Whale -- but in this case, the White Whale has long since become extinct,” Randolph J. May, president of the nonprofit Free State Foundation, said in a statement.
“The video marketplace indisputably is now subject to effective competition, and this includes the navigation device market segment,” May said, adding that the FCC was trying “to fix what ain’t broken.”
For his part, Wheeler compared the proposed move by the FCC to the agency’s decision more than two decades ago to allow other device makers to provide rotary-dial telephones, after which prices fell.
“Think back to the days when Ma Bell required customers to only rent their phones from them,” Rep. Anna G. Eshoo (D-Menlo Park) said in a statement that applauded the latest move. “When the FCC lifted this prohibition, consumers not only saved money, but innovation thrived in the telephone market.”
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