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EDITOR’S NOTE: Anyone who subscribes to cable or satellite TV knows about “the box.” That’s the piece of electronic gear that transforms the raw signal from the wall jack to the signal that runs into the back of your TV.
No box? No picture.
Currently, 99 percent of pay-TV subscribers lease their box from their provider. They have no choice in the matter, even if similar equipment might be available for less from another source. The average subscriber pays $231 for the box (that’s BEFORE the fee for the programs themselves), amounting to $20 billion annually.
A proposal before the Federal Communications Commission would require pay-TV providers to “open” the box and allow consumers to use equipment they purchase or lease from another source . John Bergmayer with Public Knowledge, a Washington-based public interest nonprofit that works on communications policy, says rural Americans have a lot at stake in whether consumers are allowed to use a box that comes from someone other than their video-TV provider.
The Federal Communications Commission’s proposal to unlock the box will benefit all pay-TV viewers, but particularly rural Americans, who often rely heavily on pay-TV subscriptions for information and entertainment. Where rural Americans live, broadband may be unavailable or slow, and over-the-air TV may be hard to tune in. Under the proposal that FCC Chairman Wheeler has circulated to the other four commissioners, rural Americans will save money on device rental fees and benefit from an upgrade in their viewing experience.
Certainly one of the major benefits of set-top box and app competition is that it would allow viewers to gain access to access cable or satellite TV right on the same devices they might use to watch online video (or for gaming, or just for general internet use). Additionally, the FCC’s proposal will ensure that video-providers’ apps (the software that allows users to stream a video signal on a computer or other digital device) can display video from a satellite dish, a traditional cable TV line, or over a specialized IP service. A viewer who watches her pay-TV subscription on a smart TV, mobile phone, or TV-connected device like a Roku would not be using “the internet.” In any case, any “multichannel video programming distributor” such as a cable or satellite TV provider that currently serves a household and provides a rented device will be required to support apps for that household, without requiring any extra services.
The benefits of the FCC’s proposal will accrue first to customers of major providers, such as the largest cable companies, or satellite providers like DirecTV. This is because smaller providers will be exempt from having to develop new apps for their viewers. This makes sense — smaller providers might lack the technical expertise and financial resources that large companies like Comcast have. However, the benefits of a more competitive marketplace will lower equipment costs across the country, and smaller providers can be expected to deploy technology first developed by and for the major providers. In fact, some small providers might decide to eventually move away from rented boxes entirely. However, it’s worth noting that the FCC’s proposal does not require that anyone stop using the box they’re used to, if they like it. This is about providing consumers with choices by not requiring that they use a particular kind of device.
The FCC has found a way to finally provide more competition and choice to pay-TV subscribers across the nation, using a method that is much simpler for consumers than the existing CableCARD regime. But it’s worth remembering who might benefit the most from this upgrade to their pay-TV service: rural Americans.
John Bergmayer is a senior staff attorney at Public Knowledge, specializing in telecommunications, Internet, and intellectual property issues.