April 26, 2016

FCC Meddles in Cable-Box Market. Is Streaming TV Next?


How long will it be until the FCC looks to regulate online video platforms and applications like the rest of its portfolio? If the agency’s history is any guide, this outcome is unfortunately quite likely.

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This February, the Federal Communications Commission (FCC) announced a plan to intervene in the cable set-top box (STB) market with its "Unlock The Box" proposal. The telecommunications regulatory body sings a libertarian tune in press releases about the program, extolling the virtues of "creating choice and innovation" and bringing "competitive solutions" to that dusty old cable box in your living room. But this is rather misleading. We are already witnessing a renaissance of competition and innovation in media distribution without the FCC’s help. Reading between the lines, it appears the FCC is not primarily interested in STBs at all. Rather, the agency may be building a foundation to exert more control over online content services such as Netflix. 

The lowly set top box has few fans. For years, many of us have begrudgingly forked over STB rental fees to our cable providers just to be treated to slow, unintuitive software and poor user experience. But because it was the only option we had, we grumbled and took it. That is, until the rise of online content provides such as Chromecast, Hulu, and Apple TV, provided an alternative. These newcomers won over consumers with their thoughtful user interfaces, ease of use, and lack of annoying rental fees. 

It’s not hard to understand why, after taking a quick comparison of their futuristic Roku device and their bulky set top box, some viewers decided to cut cable altogether and stick with the stick. Since 2002, cable TV operators lost around 15 million subscribers as tech-savvy consumers sought out more cutting-edge technologies. Thus, these technologies improved. This is the beauty of creative destruction. Cable companies were eventually forced to adapt and improve, too. For example, Comcast recently announced a new plan for its Xfinity TV service that will be compatible with streaming devices like Roku instead of an old-school set top box.

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