By David McCabe - 01/30/16 02:49 PM EST
A proposed rule from the Federal Communications Commission could be a boon to Americans who hope to dump the set-top boxes from cable or satellite providers that deliver their television service.
Consumer groups have long complained about the costs and restrictions of the cable boxes.
But the changes threaten to upend a multi-billion dollar revenue stream for the politically powerful cable, satellite and telecommunications industry, which is already pushingback hard.
Here's what it means for TV viewers:
Why are set-top boxes so important?
Americans who subscribe to a television provider’s service know all too well the set-top box that sits next to their TV and allows them to watch their favorite shows.
It also gives viewers access to channel guides, video-on-demand and, sometimes, the ability to record programming.
Most Americans who own set-top boxes — 99 percent, according to the FCC — lease them from their television provider. And consumers usually pay additional fees to rent them, in addition to their television service charges.
That’s big business for TV providers. The FCC estimates they make $20 billion each year through the rentals. They also make money through deals over channel placement and onscreen marketing.
There have been past efforts to shake-up the cable box market.
One plan rolled out in the 2000s allowed other companies to enter the market by making set-top boxes that interfaced with a small device called a CableCARD. Pay TV companies were required to put those in their own boxes — but that system was largely unsuccessful.
Now the FCC is taking another crack at making the market more competitive.
What would the new rules do?
Cable providers would be required to open up their systems to other by companies manufacturing their own set-top boxes.
Under the proposal, they would be required to provide their video feeds to those companies as well as information for viewers, such as channel guides and how to record programs.
An external agency would set standards for how information would be shared by cable companies with rival box manufacturers. But critics say that could take time to finalize.
What does it mean for consumers?
If the commissioners approve a version of Wheeler’s proposal, then it could mean consumers could eventually stop renting the set-top boxes required by their cable or satellite provider.
Companies like Google and Tivo, both of which have been supportive of opening up the set-top box marketplace in the past, could make their own boxes. That would mean that consumers would have more options to choose from — more manufacturers, and different ways to interact with video content.
The FCC also argues that that competition would drive down prices for consumers, potentially leading to lower overall bills for television service.
“The proposal is about one thing: Consumer choice,” Wheeler said in an op-ed published on Recode. “You should have options that competition provides. It’s time to unlock the set-top box market — let’s let innovators create, and then let consumers choose.”
What's next for the proposed rule?
The item Wheeler sent to his fellow commissioners this week is called a Notice of Proposed Rulemaking. It proposes rules the FCC might later adopt and asks the public to comment.
If the notice is approved, it's just the first step in a process that eventually leads to a vote on new rules for television service providers.
Who backs the rule and who opposes it?
There are powerful groups on both sides and the debate is certain in involve a strong push from tech companies that want to change the set-top box rules and enter the market, as well as pay-TV providers who don't want to lose a valuable revenue stream.
The cable industry and others who oppose the proposal are putting up a fight. A cable-led group — the Future of TV Coalition — was announced this week and also includes content creators and other video providers like Dish.
They say that opening up the market would “undermine vital privacy and other consumer protections that apply to pay-TV providers but not the tech firms.” They also warn that easing rules on set-top boxes could hurt copyright protections for content. Wheeler says his proposal addresses those concerns.
The pay-TV industry instead supports a proposal that would allow them to create applications that allow viewers to access different types of video content.
Public interest groups also support the reforms. They say cable, satellite and telecommunications companies have hit subscribers with sky-high prices to rent the boxes for far too long.
Who has the upper hand?
It's too early to say who has edge in the fight over cable boxes.
The FCC's two Republican commissioners are hesitant to stake out a position on the proposal yet. The commission's Democratic majority often sides with Wheeler.
But the fight at the FCC over how to advance technology and ultimately change how Americans access their favorite television shows is just getting started.