ó That unsightly and costly metal box that funnels
cable or satellite service into your TV might be going
the way of the black rotary-dial telephone ó in the
technology trash heap.
holdover from the early days of pay television, the
set-top box is an energy-inhaling contraption that also
sucks money from Americansí wallets each month.
a move that could further disrupt the changing video
marketplace, those boxes soon could face new federal
regulations designed to break the hold of Comcast,
Verizon, DirecTV and other providers on the devices that
millions of Americans depend on to watch TV.
99 percent of the nationís 100 million pay TV
subscribers lease a set-top box, with the average
household paying $231 a year in rental fees, according
to a survey by Sens. Edward Markey, D-Mass., and Richard
costs are one reason a growing number of so-called cord
cutters are dropping their conventional pay TV service
and now are streaming programming over the Internet
directly through smart TVs or via much smaller devices,
such as Roku, Chromecast and Apple TV, that they can
purchase instead of rent.
boxes typically cost less than $10 a month, but the
average customer rents about 2.6 set-top boxes to cover
multiple TVs. Those rentals generate about $19.5 billion
a year in revenue for pay TV companies, so theyíre not
eager to open up the market to other manufacturers who
could produce more innovative devices for viewers to
buy, consumer advocates said.
Time Warner Cable Inc., and some other providers are
experimenting with their own customized apps that would
enable customers to ditch the set-top box and access
their programming on a variety of devices. Pay TV
companies are warning against adding new federal
mandates as video options rapidly evolve.
is no quicker way to disrupt this vibrancy that is
creating the greatest TV programming in the world than
for the government to try and fix something that isnít
broken," said Brian Dietz, a spokesman for the
National Cable & Telecommunications Association
changes arenít coming fast enough for some lawmakers
and consumer advocates as well as tech companies such as
Google Inc., which are eager to jump into the set-top
box market. They want the Federal Communications
Commission to require that pay TV providers make their
services more easily compatible with third-party set-top
boxes or similar devices.
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think the time has arrived for the FCC to enable
millions of Americans to access the enormous amount of
content in new, innovative and less costly ways,"
Markey said. "Any phone will work with any
cellphone company and any video box should be able to
work with any video company."
a mandate could allow consumers to access their pay TV
and streaming services through one device instead of
having to switch between two or more. And it could lead
to innovations such as an ability to search for
programming across services to determine, for example,
whether a movie is available on Netflix or on-demand via
a pay TV provider.
the cable operators gave up control, I think weíd see
a lot more innovation," said John Bergmayer, a
staff attorney at Public Knowledge, a consumer group
that focuses on digital issues. "It would actually
make cable a more appealing product."
a case in point, he pointed to another device Americans
were required to rent for years before regulators
stepped in and opened the market: the telephone.
its monopoly days, AT&T Inc. prohibited any
unauthorized device from being attached to its phone
network. That left Americans paying a monthly fee to
rent AT&Tís standard rotary telephone. Any color
other than black cost extra.
in a landmark 1968 case involving the Carterfone, a
device that allowed telephone customers to have
conversations with two-way radio users, the FCC ruled
that AT&T was required to let its customers attach
any lawful device to the network as long as it didnít
adversely affect it. The decision opened the door to
innovations that reshaped voice communications,
including the answering machine and wireless phones.
leasing of set-top boxes through the traditional cable
provider has not only locked up the box, but also has
locked the consumer in a box," said Chip Pickering,
chief executive of Incompas, a telecommunications trade
group formerly called Comptel that includes Amazon,
Google Fiber, Netflix and Sprint.
not only an outdated technology, but also an outdated
business model similar to what the old Bell monopoly had
with the leased rotary phone," he said.
year, Congress directed the FCC to appoint a panel of
experts to study whether there was a "way to create
a more competitive market for set-top boxes that would
not be "unduly burdensome."
two of the top 10 pay TV companies ó DirecTV and Dish
Network ó offer their set-top boxes for purchase by
FCCís Downloadable Security Technology Advisory
Committee was composed of representatives from pay TV
companies, electronics manufacturers, consumer advocates
and high-tech firms such as Google and Amazon. But the
diverse group could not reach a consensus on the best
way to increase competition in the set-top box market.
committeeís report, released in August, gave
recommendations for the two leading options, both of
which are still largely in the conceptual stage.
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is the app-based approach backed by the pay TV industry.
would download a provider-issued app via a smart TV or
other device and have access to all the programming for
which theyíve subscribed, including the ability to
watch on mobile devices. But the content would be walled
off within the providerís app, unavailable to be used
by other applications for services such as an
all-encompassing programming guide that included options
from streaming services such as Netflix or Hulu.
second option, backed by a coalition of consumer groups,
high-tech companies, and device manufacturers such as
Vizio and TiVo, as well as Amazon, would mandate a
standardized technology that would make it easier for
third parties to sell their own set-top boxes. The
approach, based on a concept known as AllVid, would
break the individual providerís hold on their content
and allow it to be integrated into a device that offers
other services and programming as well.
reason pay TV companies donít like the second option
is that competitors might sell advertising around their
content, which their customers already pay for.
FCC is expected to propose new rules in the coming
STORY CAN END HERE)
donít think that the Congress passed the legislation
instructing us to take this action for the purpose of
having an academic seminar, so I would anticipate there
would be something forthcoming," FCC Chairman Tom
Wheeler said last month.
the FCCís second chance to fulfill Congressí desire
to open up the set-top box market.
similar effort begun in the late 1990s led to the
creation of the CableCard.
credit card-sized device contains the providerís
encryption technology. The card can be inserted into a
TV or other retail device, such as a TiVo set-top box,
to enable subscribers to watch programming without
leasing a box from their provider.
the CableCard has failed to transform the set-top box
market since it was introduced in 2000. Consumers still
have to rent the card for $2 to $4 a month from their
provider, which usually must send a technician to
install it in the third-party device. Also, the card
doesnít work for interactive services, such as
purchasing on-demand movies.
of July 31, there were only 617,000 CableCards installed
in third-party devices for customers of the nine largest
cable operators, according to the FCC. Thatís compared
with 53 million set-top boxes from those companies.
pay TV industry has said that the CableCard initiative
has been costly and that it fears another ineffective
FCC mandate. To try to speed adoption of the card, the
FCC in 2007 required that it be installed in all new
cable set-top boxes, which previously had integrated
decryption technology. That mandate cost cable companies
$1 billion, and the separate cards required the boxes to
use more electricity, the National Cable &
Telecommunications Association said.
FCC must wrestle with difficult issues, including how to
ensure the security of pay TV programming. Thatís a
big concern of the Motion Picture Association of
America, which represents the six major Hollywood
MPAA prefers apps from pay TV providers that would wall
off their content so that licensing and distribution
agreements arenít violated. So does Alfred Liggins,
chairman of TV One, a cable network aimed at
a programmer, what I donít want is to have the
government force the cable operators to open up the
set-top box platform," he said. "The tech
companies are going to write their own programming,
manipulate content and sell advertising around it."
the FCCís advisory committee said the AllVid approach
could protect content as well. Ellen Stutzman, who
directs research and public policy for the Writers Guild
of America, West, said provider-based apps would fail to
open up the video market and keep pay TV companies, not
consumers, in charge.
they control the set-top box market and are allowed to
integrate the Internet video of their choice, they
remain the content gatekeeper," she said.
money in set-top boxes
what the 10 major pay-television providers charge
monthly for the set-top box, or STB, that brings the
programming into your home:
Basic STB; Second STB; Total pay-TV customers;
$1 to $2.50; $1 to $2.50; 22.4 million;
6; 6; 20.4; million;
Free; 7; 14 million;
Warner Cable; 7 to 11.25; 7 to 11.25; 11.4 million;
Free; 8; 6 million;
11.99; 7.99; 5.5 million;
8.50; 8.50; 4.3 million;
6.99; 6.99; 4.2 million;
6.95; 6.95; 2.7 million;
8; 8; 2.4 million;
Security and Exchange Commission filings; company
responses to 2014 Senate survey.