Set-top cable and satellite television boxes look, and sometimes act, like relics from an earlier technological age. Most of them are clunky, finicky, and ugly. There’s also something else anachronistic about the equipment — the monthly rental fee that companies charge customers for their use. Set-top box fees total about $231 a year per household, according to the Federal Communications Commission. A report released last July by Democratic senators Edward J. Markey of Massachusetts and Richard Blumenthal of Connecticut said the rentals generate more than $19.5 billion annually for the industry.
Because nearly all customers sign up for service that bundles the boxes into complicated pricing packages, few people realize what they’re being billed for – about 99 percent opt for box rentals. That’s given cable companies little incentive to make set-tops less expensive and more useful. FCC Chairman Tom Wheeler, writing for the tech website Re/code, said a recent analysis showed that the price of set-top boxes has risen by 185 percent over the last two decades, while the cost of TVs and computers has fallen by 90 percent.
Under a common-sense proposal put forth by Wheeler, the regressive era of never-ending payments could give way to greater innovation, and savings for consumers. The commission is scheduled to vote February 18 on a plan that would unlock some of the technology inside those heat-generating TV boxes. It would allow outside vendors acccess to cable companies’ programming, but not their proprietary information, Wheeler said, while “maintaining strong security, copyright and consumer protections.” That would motivate more forward-thinking tech companies to make their own versions of the equipment, which customers could buy — instead of lease — and then choose whichever cable or satellite provider suits their needs. It is possible to do so now, but the choices are limited.
Wheeler’s model also would promote better integration of the two primary ways people use their televisions — to watch traditional stations and cable networks, and to stream Internet-based services such as Netflix, Hulu, and YouTube. Now millions of viewers who want to do both have to clutter their consoles with set-top boxes from cable providers and separate equipment from Amazon, Apple, and Roku, or other streaming companies.
The cable industry, along with some content creators and programmers, last month formed an organization called the Future of TV Coalition to oppose the FCC’s proposed changes. The group says cable companies already are introducing pay-TV apps that eliminate the need for set-tops, “a trend that will only accelerate,” and doesn’t require government interference. Comcast, the country’s biggest cable company, has rolled out a souped-up cable box for its Xfinity customers and also offers a service called Stream TV that doesn’t require a box for live viewing.
Alfred C. Liggins III, the Future of TV Coalition’s cochair, called Wheeler’s plan “a brazen money grab by Big Tech companies that would do severe damage to the programming ecosystem, and in particular, niche and minority-focused networks.” By Big Tech, he probably means Google, which is pushing its own fiber-optic system, and sells the popular Chromecast Internet-streaming device. But the trade group’s argument smacks of desperation. Cable-box rentals are a throwback to the days when people leased rotary phones from Ma Bell.
“Consumer choice should fuel the video-box market, not cable company control,” said Markey, who coauthored the 1996 Telecommunications Act and is a longtime critic of the industry’s consumer-unfriendly practices. “In the 21st century, consumers should be able to choose their set-top box the same way they choose their mobile phone.”
The FCC can’t pull the plug on this practice fast enough.