President Obama Backs FCC Push To Force Competition In Cable TV Box Market

Much to the chagrin of cable TV providers that profit from leasing out set-top boxes to customers, the Obama administration joined the Federal Communications Commission in pushing for changes that would give consumers the option of buying less expensive third-party boxes that would offer full functionality with their TV service.

At the beginning of the year, FCC Chairman Tom Wheeler issued a proposal that would do exactly that. The FCC ultimately approved the proposal by a 3-2 vote, which kicked off a 60-day "information-gathering process" to give the FCC and cable providers a chance to work out the details on how to implement the proposal.

Set-Top Box

"You could have a set a standards such that anyone could connect any box to their cable and those boxes could compete for lower prices and greater innovation," Jason Furman, chairman of the Council of Economic Advisers, told reporters in a teleconference, according to Reuters.

That's exactly what the FCC is trying to do and what the Obama administration is supporting. Cable companies pull in big bucks by leasing out set-top boxes—fees can add up to almost $1,000 per customer over a four-year period, depending on the leasing agreement.

The new rule would allow companies such as Amazon, Apple, Roku, and others to supply set-top boxes that are compatible with cable TV services. Pay-TV providers would be required to deliver three specific streams to third-party boxes, ones that would include information about what programming is available to the customer, information about what a device is allowed to do with content (such as recording), and the video programming itself.

These streams wouldn't be controlled by a government mandate, but in a format that would be set forth by an independent open standards body.

Cable companies are vehemently opposed to the rule. According to Michael Powell, head of the National Cable & Telecommunications Association, the rule would hurt minority programmers, put customer privacy at risk, and lead to inflated costs related to network upgrades to support the mandate.

It's not clear if the rule will take effect before Obama leaves office in January.