Legislators, Consumer Groups Urge the FCC to Approve New Cable-Box Rules

Just two days before the Federal Communications Commission (FCC) votes on new rules that would shake up the cable-box rental business, a group of legislators, consumer advocates and others urged the FCC to approve the measure.

During a press conference held this morning, the participants called for the FCC to approve the plan, which they say will save consumers about $232 per year in cable-box rental fees while broadening their programming choices. Under the new rules, pay-TV providers would have to offer subscribers a free app that would let them get their TV programming on other devices—such as a smart TV, streaming media player, or tablet—instead of having to rent a cable box from the company.

Another condition is that the app will have to provide the same features and experience you'd get with the cable company's set-top box—so that companies can't offer inferior apps that will make you go back to their box. If the new rules are adopted, the larger pay-TV providers will have two years to comply with the rules.

But approval still isn't a sure thing. Right now, the FCC appears to be split on the revised rules, with two members each for and against the proposal. The swing vote is held by Jessica Rosenworcel, who appears to be in favor of the cable-box plan but not the FCC extending its authority into the licensing deals between cable providers and the companies making the devices. The timing of the press conference could be viewed as an effort to move Rosenworcel into the pro-proposal camp.

Competition in a Market That Lacks It

During this morning's press conference, Senators Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.) again emphasized their support of the cable-box measure, which they argue will save consumers money, spur innovation, and introduce competition into a market where it has been markedly absent. Last year the two senators released a report detailing how much families spend on the rental fees. They were joined by Rep. Anna G. Eshoo (D-Calif.), who said the FCC's revised, app-based proposal showed "a willingness to listen" to stakeholders and "take some of those ideas and put them into the new proposal."

Another key component of the new cable-box rules is universal cross-platform search, meaning that when you look for programming options you'll see them regardless of whether they come from your pay-TV provider or from an online streaming source that's accessible via the device you're using. The rules also ban discriminatory search, where the pay-TV provider favors its own content over programming from other sources.

Robert Johnson, founder of Black Entertainment Television (BET) and chairman of RLJ Entertainment, said that the provisions "provide a unique and specific opportunity" to address the issue of diversity of content, and the ability for programmers to reach audiences looking for more niche content. "This [proposal] creates a level playing field, and that's what minority programmers want."

The Writers Guild submitted a statement in support of the measure, saying that it creates "more opportunities for us, and more choices for viewers."

Both Consumers Union, the policy and mobilization arm of Consumer Reports, and John Bergmayer, senior counsel at Public Knowledge, reiterated their belief that the FCC proposal is good for consumers.

"We believe this is a good proposal that will help consumers, and help boost choices and innovation in a market that's had too little for too long," Consumer Union's Butler told Consumer Reports. "Consumers deserve better, and the FCC needs to do the right thing and approve these new rules." Butler pointed to Consumer Reports' surveys that consistently show that cable companies earn low marks for value and customer service.

During the call, Best Buy executive Parker Brugge said that the consumer electronics retailer was in favor of the rules, because "innovation and competition ultimately benefit the consumer."

A Call for Strong Oversight

In his remarks, Senator Blumenthal addressed one topic we've been especially concerned about: the possibility that pay-TV providers could impose service fees, app access charges, or other add-ons that would simply take the place of box-rental fees.

"My hope is that the rule by the FCC anticipated this Thursday will break open the market and will be a significant win for consumers, providing them with real and immediate relief. But let’s be very clear that the past is often prologue, and if that’s the case here, cable and satellite companies may soon seek to circumvent this action and charge fees to consumers on monthly bills in other ways simply to compensate for their lost revenue," Blumenthal said. "We will need an aggressive and effective agency reviewing these practices and enforcing the enactment of the new rule as necessary. I will continue to work with Senator Markey, Congresswoman Eshoo, and other colleagues in seeking strong, effective enforcement that will protect consumers and enforce the spirit as well as the letter of this rule.”