New rules from the Federal Communications Commission designed to open up the market for television set-top boxes are sure to spark a backlash from large cable companies and other pay-TV providers. Under the plan, pay television providers would have to provide a way for consumers to search for the content that they want, including the broadcast stations and streaming services in the results. Cable companies would also be required to provide their subscription feeds free to other device-makers through apps.
A commission would come up with a standard license for device makers that want to offer the apps. A new government licensing process for the new apps could give the FCC more say over the exclusive licensing arrangements between cable and media companies. While the licensing process would be run by representatives of the pay-TV industry, the agency would retain oversight to prevent anticompetitive measures.
Third-party devices could save consumers money over the cable industry’s rented boxes. Americans pay, on average, more than $230 annually renting set-top boxes from cable companies and pay television providers. Making the subscription feeds available through apps may also mean that some consumers would not need a set-top box at all. They would be able to access the feed through a smart TV or device they already own.
FCC Chairman Tom Wheeler released the proposal on Thursday. Mr. Wheeler said in a statement, “By empowering consumers to access their content on their terms, it’s about to get cheaper—and even better.” The FCC is scheduled to vote on Mr. Wheeler’s plan on Sept. 29. It is unclear whether Mr. Wheeler has the three votes necessary to pass his proposal.
Mr. Wheeler’s original proposal was much broader. Wheeler had initially proposed that cable and satellite providers be required to make their channels available to anyone who wants to make a new user interface for it. The new proposal has been heavily influenced by an alternative proposal for the app-based approach put forward by the cable industry.
Cable giant Comcast seems prepared to fight the proposal, saying on Thursday that it exceeds the FCC’s authority. In its statement, Comcast also called the proposal an “overly complicated government licensing regime and heavy-handed regulation.” Other major cable companies called the proposed centralized licensing system “unnecessary and unworkable.” Industry group Future of TV Coalition also criticized FCC plan’s licensing approach, saying it “will only hurt consumers by creating barriers to innovation,” among other criticisms.