Federal regulators launched an effort Thursday to give consumers more choice in the kinds of set-top boxes that provide them cable programming, a move that could reshape the way millions of Americans experience their television service.
But the cable industry has warned regulators that it will have little choice but to keep requiring monthly set-top box rentals if the federal government moves ahead with its proposal.
As a result, households that want to ditch their set-top boxes could wind up with even more of them, industry officials say. Instead of buying a third-party cable box to replace the one they rent from their TV provider, consumers could be forced to manage multiple devices, various firms have told regulators in meetings and in a regulatory filing.
The gloomy forecasts are aimed at deflating efforts by the Federal Communications Commission to allow outside companies, such as those from the tech industry, to build their own competing cable boxes and apps. Industry officials are attempting to convince the FCC that its actions will create new costs for cable companies — costs they will not hesitate to pass along to the consumer.
“Consumers will end up paying,” executives from the industry told the agency in a filing last week. They added that “someone will need to develop and pay for new technologies and specifications” that meet the FCC’s requirements.
Regulators haven’t laid out a specific road map for the industry; rather, it plans to bring cable companies, tech companies, consumer groups and others together in a bid to hammer out a mutually agreeable standard that would allow new cable boxes to interact with cable content.
Among other objections, cable companies worry that whatever solution the group comes up with — if it finds one — will require substantial changes to their networks.
It would be costly to upgrade individual cable companies’ technology to “somehow work with every potential third party that wants access,” according to an industry official who spoke on condition of anonymity in order to discuss corporate strategies.
FCC Chairman Tom Wheeler dismissed those concerns Thursday, saying his agency’s proposal does not explicitly require a “multibillion-dollar reengineering of cable systems.”
“It is not forcing cable operators to change the way they do business,” he later told reporters, adding that the standards process will ensure cable companies will not face steep new costs.
The agency voted 3-2 to move forward with the proposal, with its Democratic commissioners voting in favor and Republicans voting against.
At the moment, it is essentially Wheeler’s prediction against the industry’s, because the standard-setting process has yet to take place and could occur over a number of years. But Wheeler’s proposed plan creates financial incentives that would drive cable companies to hurt consumers, industry execs argued to the FCC.
“Each and every company has told me that it would be less expensive to deploy additional boxes in their customers’ homes” than to re-engineer their networks, said Republican FCC Commissioner Ajit Pai. “So if the commission’s proposal is implemented, the American people will probably end up paying for more boxes, not fewer.”
In this scenario, consumers would be unable to take advantage of a cable box built by a third party unless they first connected that box to the proprietary cable box supplied by the TV company.
The cable industry hopes the multiple-box argument, among others, will dissuade the FCC from its current approach. But consumer groups say it isn’t likely to resonate with officials — or with Americans.
“I think we need better proof from them than, ‘The cable company is looking out for you and would hate to raise your prices,’” said Matt Wood, policy director of the advocacy group Free Press. “There’s this notion that ‘No, no, Grandfather Cable is looking out for you and God forbid we charge you more.’”