FCC Wants More Choice, Competition for TV Set-Top Boxes

The Federal Communications Commission wants to shake up the cable set-top box market with a move that would give consumers more choices and boost access to online video.

Under the proposed rule change, cable and satellite companies would have to support set-top boxes from other companies instead of simply insisting that customers rent the boxes they provide. The FCC characterized the market as "locked up."

Consumer Reports, and its advocacy arm, Consumers Union, support the FCC initiative.

"With the ever-increasing price of cable and all of the advances in technology, why should consumers have to keep renting a set-top box?," asks Marta L. Tellado, president and CEO of Consumer Reports. "This move by the FCC would help bring some competition and innovation to a market that’s in serious need of reform."

Under the new proposal, she says, consumers could get better choices and save money.

"We’re very pleased that the Commission is moving forward on a rulemaking," adds Tellado, "and we look forward to continuing to work with them to push for solutions that put consumers first.”

There are few options beyond TiVo for consumers who typically pay a sizeable monthly fee to rent set-top boxes from a TV service provider. Noting that the average monthly charge for each box is $7.43—about $90 a year—the FCC said consumers will likely save money by buying a box from a competitor. In addition, they can shop for a model with the software of their choosing. Many homes have more than one box and last summer two senators estimated the average household spent over $230 a year on cable-box rental fees.

FCC Chairman Tom Wheeler—who is championing the new rules—wants next-generation set-top boxes to include streaming video as well as the usual pay TV programming. The proposal, which must still be approved by three FCC commissioners, also calls for the boxes to provide channel listings and on-demand lineups, plus information about what the box is allowed to do with content (i.e. recording features).

The FCC believes the new rules will also provide consumers with greater flexibility—you won't be forced to purchase a new box to continue receiving services, for example—and greater innovation, since pay TV and streaming services will be integrated into a single unit.

This move by the commission comes after a ban on integrated set-top boxes—which used security measures to essentially make the boxes themselves proprietary—expired last month. The FCC's proposed guidelines don't require one specific type of security, but mandate that cable and satellite companies use a system that can be openly licensed "on reasonable and non-discriminatory terms."  

The proposed new rules are now circulating with the FCC commissioners, who are expected to vote on the changes next month.

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