Tom Wheeler's Waterloo on Liberating Your Cable Box
Tom Wheeler is the chairman of the FCC. He introduced the proposal to end mandatory set-top box fees in January and was its strongest supporter. But on Thursday he simply said the FCC would continue to consider TV access, but citing legal and technical issues, the proposal would not go forward at this time.
If you are of a certain age, you'll recall that formerly the only way to get a telephone was to rent it from the Bell System. You continued to pay for that phone, month after month, long after its true cost was recouped. And heaven forbid if your daughter wanted a Princess phone; that was another monthly rental fee. It was widely rumored that the phone company had inspectors who checked line voltage levels at homes to see if anyone was using an unauthorized phone. One upside was the incredible reliability of the phones; to minimize maintenance costs, Bell had its Western Electric subsidiary build them like brick houses. The rental thing ended in 1983 when the FCC changes the rules and you were allowed to buy your own phone.
Cable set-top boxes follow the old Bell business model; you use the box you are given and pay a monthly rental fee. The FCC proposal would have ended that.Cable set-top boxes follow the old Bell business model; you use the box you are given and pay a monthly rental fee. The FCC proposal would have ended that. Instead, consumers would be given a choice. They could continue to rent a box from the cable company, or make a one-time purchase of a third-party device. The proposal would foster better integration; cable access and streaming services could be combined into one app. Alternatively, the technology could simply be built into TVs. Chairman Wheeler estimated that the proposal would annually save consumers $20 billion in rental fees.
On the flip side, the proposal would throw into chaos the many contracts between content programmers and provider companies. In an attempt to address that chaos, the latest version of the proposal required the industry to form a new licensing body, working under the oversight of the FCC. That would be complicated to say the least, and possibly illegal. The Copyright Office has also cited concerns. While cable and satellite companies would lose clout (and revenue), companies like Google and Amazon would further extend their influence (and revenue).
The FCC determines government policy as it relates to telecom issues. Five commission members would have voted on the proposal. Tentatively, it appeared that two commissioners supported the proposal, while two others opposed it. Commissioner Jessica Rosenworcel was on the fence, a swing vote who seemed to generally support the proposal, but also voiced her concerns. But the vote never took place; the proposal now officially resides in limbo.
What's the hold up? Well, it appears to be politics. Technology would seem to be an apolitical affair, but like all things in Washington, it is very political. The surprise announcement came exactly one day after more than 60 members of the House of Representatives sent a letter to the FCC asking it to extend its consideration and to solicit more public comment.
In any case, Tom Wheeler's proposal, barring a last-minute miracle, is probably dead. When the FCC said it would oversee licensing agreements from now on, it probably went a bridge too far. Now, with a new President coming soon, and probably new FCC commissioners too, the issue could stay in political purgatory indefinitely, as other issues gain greater prominence.
Reminder: don't forget to pay your cable or satellite bill this month.