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The Cable Industry Is Fighting Tooth And Nail To Prevent Cable Set Top Box Competition

from the protectin'-innovation-through-obstinance dept

Wed, Sep 2nd 2015 10:41am — Karl Bode

For years now regulators have tried fruitlessly to bring a little more competition to the cable set top box market. While CableCARD was supposed to be a revolution on this front, regulatory enforcement was messy and inconsistent, and to protect set top box rental revenues and overall market control, cable companies rarely advertised the technology and made installations frequently nightmarish and expensive. When lackluster CableCARD stats then emerged annually, the cable industry just shrugged and apathetically declared that gosh -- nobody really wanted choice anyway.

Senators Ed Markey and Richard Blumenthal recently collected data from ten cable companies and found that things haven't really improved when it comes to set top box competition. Their data found that 99% of cable customers still rent a cable box, and pay $231 in fees annually for hardware that's usually not even worth a single year's payments. As a result, the cable industry generates $19.5 billion per year in rental fees, and has every incentive to keep things as they are.

Last fall, Congress passed the Satellite Television Extension Act Reauthorization (STELAR), which effectively killed the CableCARD and the FCC's sloppy attempt to crack open the set top market. However, STELAR's passage included the creation of the the Downloadable Security Technology Advisory Committee (DSTAC), tasked with advising the FCC on how to move forward on a CableCARD replacement that actually works. That's no small feat given the cable industry desperately wants to maintain the status quo, and the copyright brigades want hardware to be as locked and crippled as possible.

Among the DSTAC proposals released last week (pdf) is the idea of a "virtual headend," where network security functionality is performed in the cloud, leaving the end user device flexible for an array of hardware and software solutions. It's an evolution of the "Allvid" proposal the FCC considered in 2010, intended to create a single, unified standard for a set top gateway that's open to all forms of video competition, software and hardware alike.

Not too surprisingly this idea has the support of companies like Google, Apple, Sony and Microsoft, but has faced stiff opposition from the cable industry. With reports suggesting DSTAC will be pushing such an open platform (even if more flexible than the original Allvid proposal), the cable industry's chief lobbying apparatus (the NCTA) is of course once again trotting out the safety, privacy and security bogeyman:

"Regrettably, the report veers off course by including a controversial proposal to place a burdensome technology mandate on MVPDs known as AllVid. This approach could jeopardize consumer protections including privacy, emergency alerts, parental controls, and inhibit innovation by allowing the government to dictate the way video content is delivered to consumers. Fortunately, the report reflects substantial opposition to the idea of a new, government-imposed technology mandate and extensively describes the proposal's shortcomings."

Yes, and we wouldn't want to "inhibit innovation," would we? Opening up the locked-down cable set top box not only would open the door to greater set top hardware competition, but it would ultimately threaten the cable industry's stranglehold over cable itself. As such, it's highly unlikely that any proposal worth its salt will see NCTA approval. It's also probably unsurprising that Allvid has the support of consumer advocates like Public Knowledge and the New York Times editorial board, which this week tried to soft sell the idea to the cable industry at the bottom of an editorial on the subject:

"Cable and satellite companies will surely resist change or try to water down the new F.C.C. regulations. After all, they stand to lose billions in rental fees. But it is in their long-term interest to give consumers more choices. A growing number of Americans are giving up cable-TV because it costs too much. Consumers might be more inclined to pay for cable if the industry stopped trying to nickel-and-dime them."

Except it's not really in their long-term interest to give consumers more choices. Open set top gateways and open, competing platforms would only further usher in increased Internet video options, incurring a mass realization that people pay the cable industry far too much, for far too little. As such, expect the cable industry to scratch, piss and moan until it has ensured that whatever standard emerges from the FCC committee is a scarred and bastardized shadow of the original intent. And should this shadow actually survive the lobbying gauntlet and see real-world adoption, the cable industry will surely work tirelessly to ensure the same level of dysfunction consumers enjoyed with the CableCARD.

On the bright side: none of this really matters longer term. Neither incompetent regulators nor terrified legacy giants can stop the Internet video revolution from threatening traditional cable television. And as traditional cable's power wanes, its all-too-comfortable walled-garden authority over the set top box market becomes utterly irrelevant. As such, the cable industry needs to stop focusing on swimming upstream, and start battening down the hatches ahead of what's going to be a particularly nasty storm.

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Filed Under: cable, cablecard, competition, fcc, set top box, stelar, tv

18 Comments

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Uriel-238 (profile), 2 Sep 2015 @ 10:59am

Your regular reminder:
Cable is more profitable than drugs. Or child sex slaves. Or (heh.) pirated media.

In fact it's a wonder that the black market doesn't deal exclusively in cable.

Renting proprietary hardware at exorbitant rates may explain some of that odious profit.
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DannyB (profile), 2 Sep 2015 @ 11:00am

You said it for me
I was just going to write something similar. But you expressed it for me.
On the bright side: none of this really matters longer term. Neither incompetent regulators nor terrified legacy giants can stop the Internet video revolution from threatening traditional cable television.
Eventually, they can have total control over no customers.
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- Ninja (profile), 2 Sep 2015 @ 11:48am
  
  Re: You said it for me
  That. Still, if this initiative enables new competition in the AppleTV, Chromecast etc field it may be awesome. Even if the intended primary target of it is dying a slow, ugly death.
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DannyB (profile), 2 Sep 2015 @ 11:03am

Things change slowly, but they change
The copyright brigades will find this out too.

Amazon. Netflix. Hulu. They will create their own original content.

Slowly.

But surely, they will have most people watching their new content and less and less of the 40 year old content locked up in the copyright pigopolist's vaults.

A newer young generation will have their own culture. Not quite so locked up. And the old locked up copyrighted culture can just disappear in locked-up DRM'ed obscurity.
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- Ninja (profile), 2 Sep 2015 @ 11:51am
  
  Re: Things change slowly, but they change
  That. I was amused and pleased to see people eagerly commenting and discussing series produced by Netflix recently (Orange is the New Black comes to mind). And Disney is still remarkably absent from Netflix even though most parents I know now have ditched everything else for their kids in favor of Netflix. Awesome, Disney can die in oblivion.
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  - Anonymous Coward, 2 Sep 2015 @ 12:06pm
    
    Re: Re: Things change slowly, but they change
    Awesome, Disney can die in oblivion.
    
    YAY
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SparkyOfGenius (profile), 2 Sep 2015 @ 11:14am

Good article. We just wrote something similar on Project DisCo: http://www.project-disco.org/competition/090215-the-future-of-the-set-top-box/
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Deckmaster, 2 Sep 2015 @ 11:38am

MaBell & Leased Phones
While I am a bit too young to remember leased phone equipment. I do know about it and the requirements that MaBell put on connecting devices to the network. https://en.wikipedia.org/wiki/Bell_System#Nationwide_Monopoly
Why is it that we fail to see this as the same issue? Cable companies are forcing people to rent devices at inflated prices or face fees to connect something like a Tivo along with the overly difficult task of doing so. All just to protect their profits.

I should be able to connect any device to the network and recieve the signal I am paying for as long as it does not cause harm to the network.
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- Anonymous Coward, 2 Sep 2015 @ 12:43pm
  
  Re: MaBell & Leased Phones
  I'm old enough to remember when you got a landline from MaBell you got one phone with it. It would be hard wired in your house or business. Any additional phones were extra and you could plug them into wall jacks. Then in the late 70s regulations were enacted that allowed customers to own their own phone(s). We got a note from MaBell to schedule a service call (at no cost) to 'modify' our phone which was to undo the hard wire and install a jack.
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  - Anonymous Coward, 2 Sep 2015 @ 3:22pm
    
    Re: Re: MaBell & Leased Phones
    Yeah; because we were on a party line, even after they did this, we still needed to rent from them, otherwise our phone would ring for any party, and one phone I tried actually used up more electricity than the local pool could handle, resulting in all phones in the pool failing to ring.
    
    Eventually the local loop finally switched to DTMF service and all that was a thing of the past... as were the old white and olive rotary phones with detached handset.
    
    I have to admit, I liked being able to listen and speak while also being able to see the numbers I was dialing.
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    - Anonymous Coward, 2 Sep 2015 @ 5:39pm
      
      Re: Re: Re: MaBell & Leased Phones
      | I liked being able to listen and speak while
      | also being able to see the numbers I was dialing.
      
      Dial in speakerphone mode.
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Christenson, 2 Sep 2015 @ 11:50am

Forget the standard!
Well, not quite, but trying to set a standard for a set-top box is a little too much government interference for me.

Instead, force the cable companies to publish, and adhere to, standard signalling into the dwelling, (just like for my phone) and kill DRM by requiring the decryption keys for the copywrong stuff to be available on the same terms to all subscribers. If the cable co wants to send keys over their wire, there should be a standard interface for that. And no "fingerprinting"!

Then anyone that likes can make a better mousetrap/set top box.
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Anonymous Coward, 2 Sep 2015 @ 1:16pm

i truly wonder what the chance is of change in the USA. it seems that apart from the public, the various business interests have become the most important, the most precious of things. it matters not whether it is the cable industry or Hollywood or any of the other movie and music studios we talk about, they are all so incensed with two things. one is staying in control of their parts of the industries which maintains their ability to charge absolutely ridiculous, rip off prices, the results being that the top honchos are paid equally as ridiculous salaries for doing nothing except to constantly complain about change. the other is to do anything and everything that can be thought of to do that will ensure there are no changes unless these industries decide to make the changes. all this goes on, costing the American public an absolute fortune and getting nothing or worse than nothing in return and the whole shemossel is backed by those in Congress who will do less than nothing to force the changes into being because they are paid too well to make sure things stay as they are!! the future isn't passing by the inhabitants of the USA, it is doing the same as it is everywhere else, intentionally being held back just to ensure a certain few people (few in relation to the population of even the smallest office) can continue telling everyone what the can watch, when they cam watch it, how they can watch it and the cost of doing so is a minimum of x10 what it should be. on top of that, each piece of media is filled with anything and everything that politicians have agreed is 'perfectly fine' to include on each piece, that pisses people off before they even get to what they want to watch. i mean, who the fuck wants to sit and be forced to watch some bullshit that the FBI has put together to stop you from buying any of the other things sold by the same studios, the blank disks, the burners, the software etc etc so you cant copy the disk, even though you are encouraged to buy these items but are told you cant do it! add in the DRM and whatever else thought of and by the time you get to the part that you bought the disk for, you're so brain dead, you rip the disk apart and the player too!! you never get to watch anything!! and as soon as there is the slightest hint that a new bill may be on the scene, one that gets to bypass everything else and the studios, just so that progress can happen and the industries can catch up with technology used everywhere else, out come the politicians again, hands extended ready to get the 'encouragement' to put everything, every genie, back in the respective bottles and the USA can sink back on to its haunches again and hold back progress for another year or two, while the customers get fleeced again and again!! pathetic!!
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- tqk (profile), 2 Sep 2015 @ 2:16pm
  
  Illegible, sorry.
  You don't seriously expect anyone to read that, do you?
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Anonymous Coward, 2 Sep 2015 @ 1:47pm

At least Google Fiber's Set Top Box includes fuel-cell that powers your entire house and absorbs even direct lightning strikes!
Also wirelessly powers Robot Dog that licks your face or any other parts you want licked, automatically uploading video to Youtube.

Gosh, those 27,000 Google Fiber subscribers get a good deal. Why doesn't Google Fiber expand?
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Anonymous Coward, 2 Sep 2015 @ 1:50pm

For a while at&t's uverse product had an option to use an Xbox 360 as a set top box. You had to buy a kit with a disk and the 360 remote and at&t would activate it. Not long after they discontinued the service. Perhaps a follow up article?
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dogwitch (profile), 3 Sep 2015 @ 1:14am

finale
its about time this and also router fees get notice about
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Anonymous Coward, 3 Sep 2015 @ 6:42am

Shorter NCTA
"Don't let the government inhibit innovation. That's our job!"
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