Consumers want to end the boxopoly

For over 20 years, consumer advocates have been fighting to give consumers the power to choose their own video devices, rather than being forced to rent one from the cable company.

In 1996, we scored a major victory when a bi-partisan Congress told the FCC to bring competition to the video device marketplace. But those seeking to preserve their control undermined the FCC’s efforts at every turn.

{mosads}Today, 99 percent of cable and pay TV subscribers are still forced to rent a box from their provider. It’s an outdated box, built for control, that typically blocks Internet content from new streaming services — meaning consumers are paying even more to buy a second device just to watch Netflix or Amazon.

In 2008 there was hope for an industry-led solution. The largest cable company, Comcast, gave a major address at the CES in Las Vegas, stating that, “the age of the closed, proprietary set top box is behind us.”

But since then, it’s been more of the same. Why? There are about $20 billion reasons. According to information compiled by Sens. Markey (D-Mass.) and Blumenthal (D-Conn.), consumers are shelling out $231 per year to the cable companies to rent that box. That’s $20 billion per year in easy money for the pay TV industry. And just like the rest of your cable service, because of lack of competition, they raise the price of the box every year.

In fact, prices for the cable box have risen 185 percent over the last two decades. Compare that to the 90 percent drop in prices for phones, computers and TVs –all open devices with competitive markets – and you can see why consumers are pulling their hair out, ranking cable last in customer satisfaction.

But it’s not even just about rental fees, as high as they are. Controlling the device means controlling the experience.  It means that cable companies can promote some content and not other content in their user interfaces. It means that access to online video services will be restricted or entirely absent. If you, the customer, don’t like any of this, you’re out of luck, since there is no competitive market for devices.

But there is new hope. The FCC and Chairman Tom Wheeler have said enough is enough. In February, the FCC launched a comment period aimed at bringing competition and ending the boxopoly.

Now, the cable companies, who were “for an open box before they were against it,” have launched an all-out assault to keep you locked into a bad deal.

The cable industry is arguing that it has a secret plan to get rid of set-top boxes that the FCC’s proposal would inhibit.

But although the FCC’s proposal is often referred to using the industry jargon “set-top box,” the proposal allows viewers to do away with the box entirely. Viewers will be able to watch their pay TV on mobile devices, tablets, smart TVs, and so on, without the need for a separate converter box for each screen. They will also be able to use competitive boxes—for example, game consoles, DVRs with ample storage space, and internet-connected devices like the Apple TV. Unlike various cable proposals that just reconstitute cable control in a new guise, the FCC realizes that a one-size-fits-all solution doesn’t work in today’s marketplace.

On privacy, the cable companies are quite boldly accusing competitive electronics companies of planning to gather viewer data in exactly the same way the cable companies themselves have done for years. However, the FCC proposal will ensure that competitive devices will be subject to privacy protections that prohibit abuse of this sensitive information, and that respect viewer preferences.

Concerns about copyright and advertising are equally spurious. Competitive devices and apps will be subject to the exact same copyright regime as cable-supplied devices are, and the open standards the FCC calls for often go even further. Similarly, the FCC’s proposal only allows competing devices and apps to access the programming that subscribers are paying for, not to modify it by inserting or replacing ads on live programming.

In short, the FCC’s plan to unlock the box first unlocks competition—the best way to protect consumer rights. It then subjects everyone to strong consumer protection rules. This is a sensible way to allow consumers to benefit from the choice, cost-savings, and innovation that a competitive market can provide, while making sure that some things, like the sale of viewing data, are prohibited no matter what.

As the FCC moves forward with its plan, its opponents will continue to spread misinformation. The technical nature of creating a standard video interface—a necessary component of creating competition—can lend itself to confusion.

But common sense should reign. Since when is a monopolistic market better than a competitive one? There is widespread support for the FCC’s proposal—from consumers, newspaper editorial boards, independent and diverse programmers who have been shut out of the cable lineup, and new companies that want to build a better device or app. While many tech policy issues are complicated, the movement to bring competition to the set top boxopoly and save consumers money is pretty straightforward.

Bergmayer is a senior staff attorney at Public Knowledge, specializing in telecommunications, Internet, and intellectual property issues.