Non satellite cable companies

The Federal Communications Commission today approved a Notice of Proposed Rulemaking (NPRM) that seeks to give consumers more choices in the set-top boxes they use to watch cable TV.

The vote was 3-2, with Chairman Tom Wheeler and fellow Democrats Mignon Clyburn and Jessica Rosenworcel voting in favor of the proposal, while Republicans Ajit Pai and Michael O'Rielly voted against. An NPRM is not a final vote. Instead, this will kick off a months-long public comment period leading up to a final vote that is likely to happen before the end of this year.

The FCC is essentially trying to create a software-based replacement for CableCard. Pay-TV operators from the cable, satellite, and telco industries would have to provide content and programming information to makers of third-party hardware or applications. Theoretically, customers could then watch their TV channels on various devices without needing to rent a set-top box from their cable company and without buying equipment that is compatible with a physical CableCard.

One possibility is that new set-top boxes could combine online video sources with cable TV channels.

The proposal has been criticized by cable companies and Republicans. Critics say it would force cable companies to build new hardware and require customers to rent even more boxes. They also say the proposal would let third-party set-top box makers insert their own advertising into pay-TV content and undermine programming agreements between programmers and pay-TV companies.

Wheeler accused proponents of spreading misinformation.

"Nothing in this item requires a second box in the home, " he said. "There is nothing in here that allows third parties to disaggregate cable content or sell advertising around it... It takes the same system that goes to the cable box today with the same structures and moves it through a different box requiring the same structures. As a result, existing copyrights and programming agreements are unaffected, consumer privacy is protected, emergency alerts are passed through and child protection laws are unaffected. Nothing in this proposal slows down or stops cable innovation."

Wheeler said the new rule will prohibit makers of set-top boxes and apps from putting extra advertising around pay-TV content.

Pay-TV companies will be required to deliver a few information streams to makers of other set-top boxes and apps. They include channel listings, video-on-demand lineups, information about what a device is allowed to do with content (such as recording), and the actual programming consumers are entitled to receive. Customers would still need a cable TV subscription for this to work.

Pay-TV companies would have two years to comply.

"These are two systems that work the same, " Wheeler said. "The difference is one is closed and one is open. The consumers have no choice today. Congress mandated [in the 1996 Telecommunications Act] that consumers should have choice."

The FCC is not mandating a specific standard for the cable companies to adopt. Instead, the commission said it recommends that the information streams "be available to the creators of competitive solutions using any published, transparent format that conforms to specifications set by an independent, open standards body."

The FCC is also proposing a billing transparency rule that makes sure "consumers understand their monthly charges for both programming services and equipment lease fees."

Pai argued that the FCC is "doubl[ing] down on the necessity of having a box" instead of trying to get rid of set-top boxes entirely. "Our goal should not be to unlock the box, it should be to eliminate the box, " Pai said. "This goal is technically feasible and it reflects most consumers' preferences, including my own."

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