FCC Chairman Thomas Wheeler wants to change the way consumers watch TV by eliminating mandatory set-top box rentals.  So far, however, his cable box free future has remained elusively out of reach.

After seven months of debating, the FCC was scheduled to vote on the proposal on September 29, but ultimately removed it from the agenda the morning of the meeting.  This is the latest setback for the controversial proposal, which was introduced by Wheeler back in January.

Wheeler’s proposal centers on his desire to free consumers from mandatory set-top box rentals.  Currently consumers pay Multichannel Video Programming Distributors (MVPDs)— including cable, satellite, or other telecommunications companies —a lot of money each year to rent set-top boxes.  These set-top boxes are mandated by the MVPDs and are generally unavailable for purchase.  As a result, the average consumer spends $231 in rental fees each year on these set-top boxes.

In the rest of the technology sector, the price of electronics has dropped steadily over the years, to the benefit of consumers.  This is not the case, however, for set-top boxes.  Rather, the average consumer pays 185% more to rent their set-top box than they did in 1994.

To replace this system of mandatory set-top box rentals, Wheeler proposed a system where MVPDs had to open their programming feeds to third party set-top box creators like Apple, Google, and Roku. Instead of flipping through channels with a Comcast cable box, all of a subscriber’s available channels could appear as apps on an Apple TV.  MVPDs would surrender their exclusive right to control the end user experience, leading to more innovative user interfaces. Most importantly, consumers would no longer be required to rent expensive set-top boxes from their MVPDs; rather, they could use a much cheaper Roku player, Apple TV, Google Chromecast, or countless other third party devices.

Wheeler’s proposal garnered praise from the tech sector, outcry from MVPDs, and concern from many legal scholars.  In an August opinion letter to the FCC, the US Copyright Office expressed concern that, by allowing third party tech companies to control the user interface, the proposal could trample the complex licensing agreements between MVPDs and content creators.  These licensing agreements often dictate when certain programming may be shown, what channels may surround other channels, and how the programming may be accessed.  While Wheeler’s original proposal would create more choices for consumers, the Copyright Office was concerned that it did not respect the thoroughly negotiated rights of content creators.

This pushback led Wheeler to scale back his original proposal in early September. Under this current iteration, the proposal would require all large cable companies to provide apps for third party streaming devices.  In other words, Dish Network would be required to provide a Dish Network app for the Apple TV so that subscribers could access the programming they paid for without needing to rent a Dish Network set-top box.  Under this plan, the MVPDs would control the packaging of their programming within the app; tech companies could not separate channels and create their own interfaces from scratch. This gives the MVPDs more control over the end user interface, while still creating more options for consumers.  Because the MVPDs would control the user interface within the app, essentially turning the third party streaming device into a mere conduit, this revised proposal avoids many of the legal issues that the Copyright Office feared.

Nevertheless, opposition from MVPDs has remained.  Even under the new plan, which is much more favorable to MVPDs, the FCC would still impose requirements on the apps that the MVPDs would be required to provide.  For example, these apps would need to be compatible with universal search, meaning that a searching one’s Google Chromecast for The Simpsons would bring up both Netflix results and results from a Comcast app.  The MVPD apps would also need to include all of the functionality of traditional set-top boxes, such as recording and pausing live TV.

Wheeler’s anti-cable box endeavor is one of his highest priorities for the remainder of his term as FCC Chairman.  By resolving many of the legal issues in his scaled-back proposal this September, Wheeler demonstrated a good faith effort to reconcile the interests of consumers with the needs of content creators and MVPDs. After this week’s vote postponement, it seems that Wheeler— and the rest of us —will have to wait a bit longer to find out if consumers will be freed from the cable box.

Daniel Paulson

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