FCC weighs ways to end cable box rental rip-off
Once, all you needed to get every available TV channel was an antenna. Then came cable, and except for premium channels, all you usually had to do was run a wire from the set to the wall. Over time, though, cable companies digitized their signals, which meant you had to have a set-top box to watch just about anything.
That turns out to have been a lucrative development for the cable industry. In addition to charging for channels, companies now lease set-top boxes to an estimated 99% of their customers for an average of more than $230 a year per household. Total revenue to the industry: almost $20 billion a year, according to Sens. Edward Markey, D-Mass., and Richard Blumenthal, D-Conn., who say consumers deserve better.
The state of set-top boxes is almost as onerous and anti-competitive as it was when the only way you could get a telephone was to rent it from “Ma Bell” — the AT&T telephone monopoly that forbade customers from connecting anything but its devices to telephone lines. Then came the Federal Communications Commission’s 1968 Carterfone ruling, which eventually let consumers buy their own phones and triggered an explosion of innovation.
That’s what the FCC thought it was doing in 1998 when it responded to a congressional mandate for better set-top boxes by requiring cable operators to make available “cable cards” that consumers could install in third-party boxes they bought themselves. While that can work, some cable companies fought it by charging monthly rental fees for the cards and making installation grueling — “waterboarding meets the DMV,” complained one consumer website.
Nor do companies do much to advertise the option, a key reason why only 1% of customers buy their own boxes. The industry “totally undermined and failed to support” the cable-card experiment, says John Bergmayer, a senior staff attorney with Public Knowledge, which has been bat- tling the cable industry to open the market for better boxes.
The FCC has an opportunity to open the way for better devices, and it should. The agency is considering competing recommendations from a working group.
Ideally, you should be able to buy a cutting-edge set-top box for a reasonable price that would run rings around what you can lease from your cable provider. It would give you not just the cable channels you pay for, but also any other services you subscribe to (Netflix, Amazon, Hulu, etc.), plus Internet content, all in the same box (or built into your TV), and in an easily searchable grid not controlled by the cable provider.
Such a device might also consume far less electricity than today’s boxes, which run even when they’re turned off and are second only to air conditioners as some homes’ biggest energy drain.
To make this possible, the FCC would have to require the cable industry to provide a feed that would work on all sorts of thirdparty boxes. Unsurprisingly, the industry says that’s too complicated and too onerous. The real reason seems to be that it would threaten cable providers’ gravy train of rental income and their control of how their customers watch TV — reasons the FCC would do well to look past as it seeks the best outcome for consumers.