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FCC urged to pause its fight against America's $20bn cable-box rip-off

Washington lobbying dollars: Exhibit 1

Sixty US congressman have sent a letter [PDF] to Tom Wheeler – chairman of America's internet mall cop, the FCC – urging him to "press pause" on plans to open the cable box market to competition.

In it, the elected representatives argue that the proposal to force large telco companies to allow third parties to produce set-top boxes could "harm small pay-TV providers and their customers."

That harm, they argue, would continue even if small providers were "granted a permanent exemption from the rules."

Wheeler will probably crack a wry smile at the letter, having so far faced guest-written columns and legal threats over his plan to end what has been a decade-long consumer rip-off.

An extraordinary 99 per cent of cable customers rent their cable boxes from their providers: a pleasure that they pay, on average, $231 a year for. Aside from the fact that the boxes themselves use outdated technology and are worth a fraction of the annual rental fees, the cost of renting the box has also increased at three times the rate of inflation.

Wheeler's plan would require the cable giants to provide the data that drives the boxes – essentially subscriber and channel information – in an open format and allow third parties to build boxes that use that data. Currently, the telco companies use proprietary formats and do not allow anyone but companies they license to build boxes. Those boxes are also typically only available through the cable companies and only for rent (YMMV).


The end result of the change would be that the next Roku, or Apple TV, or other streaming media box would simply include your cable information. It would mean folks can use different interfaces, get rid of the clunky cable box, use a single remote control to access all their TV, and buy, rather than a rent, a box that did it all.

It would be a huge consumer win and every newspaper that has reviewed the plans has approved of it, as has the White House and the US Department of Commerce. Many citizens have asked why it has taken so long in the internet era to move to a more open system.

However, the plans would also mean the end of an annual $20bn windfall for the big cable companies, and that has led to some determined resistance to the idea.

People closely associated with the cable industry have erroneously claimed that streaming box manufacturers do not want the new rules, that the plan is a conspiracy cooked up between Google and President Obama, and that companies would replace cable company ads with their own.

The industry's lobbying group, the National Cable & Telecommunications Association (NCTA), has threatened to sue the FCC over the plans claiming, among other things, that the regulator does not have the legal authority to do so.

And now 60 congressmen, largely Republican, have argued that the change would negatively impact small business.

By the way: the NCTA and the two largest cable companies in the US, AT&T and Comcast, has been in the top 20 of all companies in terms of money spent on Congressional lobbying every year for at least the past decade. ®

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