Congress Scolds The FCC For Making The Cable Set Top Box Market More Competitive
from the pretending-to-care dept
Congress is simply fed up with the FCC's pesky new habit of standing up to giant cable and broadband companies. Congress was outraged when the FCC announced it wanted to stop states from letting large ISPs write horrible, protectionist state laws. Congress was outraged when the FCC announced it wanted to pass actual, functioning net neutrality rules. Congress was even outraged when the FCC decided to raise the standard definition of broadband to 25 Mbps, since it only served to highlight a lack of competition for next-generation broadband service.Now, not too surprisingly, Congress is just pissed that the FCC wants to try and bring some competition to the cable set top box space.
The FCC recently announced that it plans to craft rules requiring that cable operators deliver their existing content (at the same price and with the same copy protection) to third-party hardware without the need for a clunky CableCARD. The cable industry has been having an incredible, epic hissy fit over the announcement, not only because it would endanger $21 billion in captive annual revenue from set top box rental fees, but it would drive consumers to hardware delivering a wider variety of legacy TV alternatives than ever before.
Part of the cable industry's ingenious plan to stop the FCC has involved funding an ocean of misleading editorials that try to claim the FCC's plan will somehow boost piracy, hurt privacy, "steal the future," and even harm ethnic diversity. Spend a few minutes perusing the news wires and you'll find hundreds of such editorials, all penned by a wide variety of cable industry-tied consultants, think tankers, and others, suddenly pretending to be objective analysts just really worried about the welfare of consumers. It is too much, as usual, for news outlets to bother highlighting any financial conflicts of interest these authors might have.
In addition to pummeling the press with a parade of misleading editorials, the other wing of the cable industry's brilliant strategy to stop the FCC involves convincing loyal Congressional allies -- whose approval ratings are about on part with the cable industry -- to whine like petulant children.
A new letter from sixty Congressmen and women (pdf) reads as if it was written by a cable industry lobbyist (because it probably was), deriding the FCC for daring to interrupt the cable industry's glorious history of innovation with a pesky quest for better, cheaper, consumer-facing hardware:
"The Federal Communications Commission's recently proposed rules on the Competitive Availability of Navigation Devices, if adopted, will jeopardize the incredible evolution of video distribution services enabled by generally reasonable regulation. Imposing new, onerous regulations on pay-TV providers would produce very few benefits for consumers, while potentially harming the viability of these providers. The particular obligations being considered by the FCC are all the more troubling because they would mandate compliance with technical standards that do not yet exist, injecting even greater uncertainty into the marketplace.How horrible! Except it's not true. The FCC's proposal as it currently stands (pdf) says that cable providers can use any technology they see fit, and any copy protection they'd like, to ensure their content can be delivered to third-party hardware under the FCC's rules. In fact, Comcast recently demonstrated how non-onerous it was by offering its content via apps on Samsung and Roku devices. Again, the FCC's proposal isn't difficult or onerous, but it does put a giant crack in the side of the cable industry's walled garden, of which clunky, outdated, closed cable boxes are a cornerstone.
Knowing how hated cable providers generally are, the Senators (including traditional telecom allies like Marsha Blackburn and Bob Latta) try to insist they're solely worried about the impact the FCC's plan will have on small cable providers. But not before penning some additional, gushing adoration of the incredible quality the cable industry provides:
"Consumers today enjoy unprecedented access to some of the highest-quality television programming ever produced, which they can watch anytime, anywhere, on a wide variety of devices. Given this proliferation of consumer choice, it is concerning the Commission continues to consider a proposal that will place significant technical and competitive burdens on pay-TV providers operating in an increasingly competitive environment, particularly small providers who serve as the communications backbone of their communities.That's very sweet, but many of those smaller cable operators are getting out of the cable industry anyway. Many have noted that as smaller companies, they lack the scale and by proxy leverage to negotiate deals that could make offering TV sustainable in the face of unrelenting broadcaster price hikes. As such, many say they're planning to exit the TV business anyway and focus on broadband and other services. The CEO of one such smaller cable company, Cable ONE, this week wrote a missive calling the pay TV Industry a tragedy of the commons, one that ends horribly in the face of real disruption.
I personally still think it makes more sense for the FCC to focus its regulatory calories on broadband competition, net neutrality and zero rating -- and let the old cable box die organically in the face of streaming alternatives. But given the relatively glacial pace of cord cutting and continued, entrenched power of companies like Comcast, I can also understand the FCC's logic in wanting to accelerate that process so it doesn't take the lion's share of the next decade.
That said, while it's nice that Latta, Blackburn and friends are just so damn worried about consumers and small cable companies, there's simply no debating the fact that the cable industry's opposition to the FCC's plan is rooted in just one thing: fear. Fear of losing control of monopoly power. Fear of losing $21 billion in annual captive revenue. Fear of third-party set tops that present consumers with actual choice instead of the expensive illusion of choice. And while it's sweet to yell "how high" when the cable industry demands they jump, it's not clear who Congress and the cable industry actually think they're fooling when they pretend -- after thirty years of abysmal service -- to actually give a flying damn about consumer welfare.
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Filed Under: competition, congress, fcc, set top box
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This is Regulation
To all you "Pro Regulation" people. This is how regulation ALWAYS goes. There is no exception, there is no "other outcome". Regulation only provides one stop shopping for government corruption where businesses can show up and buy what they need to screw the little guy.
The market must be Capitalist and Free, with strong anti-trust & anti-monopoly laws. That is the best possible combination to serve the people all others just means government controlled market or oligarchy.
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Re: This is Regulation
So... regulated, then?
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Re: This is Regulation
Solid point except for that entire sentence being total bullshit.
"To all you "Pro Regulation" people. This is how regulation ALWAYS goes. There is no exception, there is no "other outcome". Regulation only provides one stop shopping for government corruption where businesses can show up and buy what they need to screw the little guy."
Like when the FCC and DOJ blocked the AT&T and T-Mobile merger, resulting in T-Mobile becoming more competitive than ever before, resulting in huge, cross industry benefits for consumers on all wireless carriers?
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Re: Re: This is Regulation
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This works today for internet access
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Re: Re: Re: This is Regulation
Regulation is more complicated than it ALWAYS being bad, or always being the first solution to a problem. You have to actually stop and weigh each instance of regulation on its own merits, which is clearly too fatiguing for many.
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I would be happy with a compromise
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Reminds me of any third world banana republic instead of what used to be 1 of the greatest countries in the world.
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Re: Re: Re: Re: This is Regulation
Seems to me like one of those people who take in some aspects of a certain political argument, but hasn't really thought any of it through apart from the "guvmint bad" part.
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Simple fix
So, suppose the cable box costs $50. The cable company would sell you the box at $2.50/month for 24 months, after which you pay nothing because the box belongs to you. Would also need controls on the cost of cable boxes.
That way, there's no piracy, because the cable companies control the box used, just like now.
Surely the cable companies would jump on that because it's not like they make a GIGANTIC PROFIT leasing a $50 box to the consumer for $20 a month, indefinitely.
(Realizes: That means that, so far, I've paid about $500 for my $50 box.)
Oh, wait, they do make a GIGANTIC PROFIT leasing a $50 box to the consumer for $20 a month, indefinitely. Never mind. This won't work, they'd hate it, too.
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Assumes at least one fact not in evidence.
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Re:
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Re: This is Regulation
As you yourself highlight, monopoly is not a free market, that's why you need to regulate it. See https://en.wikipedia.org/wiki/Free_market
So it's not the question of "regulation or no regulation". It's the question of which regulation makes the market more free (when it reigns in monopolies increasing competition), and which doesn't (when it actually prevents competition). Economics 101.
This particular example from FCC which reduces monopolistic lock-in is clearly making the market more free. Therefore those who oppose it are also opposing free market. Surprise!
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Big Corporate business behind closed doors with republican congressman and the republicans advocate for their corporate buddies. Surprise,Surprise.
Consumer rights,except gun rights,will erode under total republican control.
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ftfy
That's how those big bribes, I mean campaign contributions, work.
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Re: This works today for internet access
That's because the entire security argument the cable companies are making is 100% pure industrial-grade bullshit.
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Re:
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Vote Them Out Of Office
Come this election season, VOTE THESE FEDERAL CONGRESSIONAL folks out of office, vote STATE REPS out that support this type of legislation.
Nothing is going to change until WE CHANGE IT.
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Re: This is Regulation
Free markets and pure capitalism only work in academic theory. Because they can't stand in the face of bad actors, evil doers, detrimental gamesmanship, greed, meanness, spite and downright mental impairment.
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Re: This works today for internet access
ISP's sometimes use MAC addresses for inventory and identification purposes but that's stupid and relies on the hope that nobody changes it.
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Re: Re: This is Regulation
A bit like a represenative democracy then?
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R: "injecting even greater uncertainty into the marketplace"
The difference between leverage and a conflict of interest is whether your the one making the money.
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Re: Re: This is Regulation
(Note, just to head off one meaningless avenue of rebuttal, that the fact that they are regulation is not the same as saying that they are regulations. The law regulates the market in these respects, and the established agencies enforce that law, irrespective of whether or not those agencies establish regulations to provide more guidance than the law does about what exactly will be enforced.)
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Re: Re: Re: This is Regulation
The Bill of Rights protects against tyranny of either kind in academic theory. Shall we bin it because it doesn't work perfectly in practice? Be careful what you wish for.
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Re: Re: This is Regulation
Except that goes to his point about strong anti-trust laws.
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Set-top boxes market
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