White House Calls on FCC To 'Open Up Set-top Cable Boxes'

The White House now backs FCC Chairman Tom Wheeler in a goal to unlock the cable set-top box market, senior officials said Friday. NCTA CEO Michael Powell expressed disappointment with the message of the administration, which said the look at set-tops is part of a broader initiative looking at competition. Powell slammed "bad government." Supporters of the Wheeler-backed NPRM approved 3-2 by commissioners applauded the White House support. DOJ previously backed the NPRM (see Communications Daily Bulletin Feb. 3).

The set-top market shows symptoms that it’s “cordoned off from competition,” said Council of Economic Advisers Chairman Jason Furman and National Economic Council Director Jeff Zients in a joint blog post Friday. “That’s why today the President announced that his Administration is calling on the FCC to open up set-top cable boxes to competition. This will allow for companies to create new, innovative, higher-quality, lower-cost products. Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want -- including their cable or satellite content, as well as online streaming apps -- in one, easier-to-use gadget. But we’re not stopping there. In many ways, the set-top box is the mascot for a new initiative we’re launching today. That box is a stand-in for what happens when you don’t have the choice to go elsewhere -- for all the parts of our economy where competition could do more.”

President Barack Obama is issuing an executive order Friday “that calls on departments and agencies to make further progress through specific, pro-competition executive actions that empower and inform consumers, workers, and entrepreneurs,” wrote Furman and Zients. “In 60 days, agencies will report back on specific areas where we can make additional progress.”

“We are disappointed that White House political advisers are choosing to inject politics and inflammatory rhetoric into a regulatory proceeding by what is supposed to be an independent agency,” NCTA’s Powell said in a blog post. “To see the White House take political credit for the actions of the 'independent' agency and direct it to reach a specific conclusion even before the record has been assembled, shatters that faith and undermines the Commission’s credibility. A wide and significant number of industries, members of Congress, civil rights groups, content creators and artists have raised serious and genuine concerns about the FCC’s proposed set-top box mandate; including copyright harms, damage to minority programmers, consumer loss of privacy protections and unnecessary costs to re-engineer networks. Rather than fairly address these legitimate concerns and seek a proposal that balances these issues, we are left with a proceeding whose objective is now more political than substantive and flies in the face of tremendous marketplace progress.” NCTA is a member of the Future of TV Coalition, which has lobbied against the FCC’s set-top NPRM. “One would hope the FCC Commissioners would resist being annexed by the executive branch,” Powell added. “But that hope is sadly faint.”

Obama’s “support for set-top box competition virtually ensures that consumers will finally see a $15 billion per year rip-off exploded by new electronic devices streaming innovative video services that challenge cable monopolies,” Public Knowledge President Gene Kimmelman said.

“Like the rest of us, President Obama must be tired of having to switch remote controls every time he watches House of Cards or other streaming content,” Incompas CEO Chip Pickering said. “New boxes from new companies will create a competition ecosphere that benefits consumers, innovators and content creators. A bi-partisan Congress directed the FCC to bring competition to the set top box market two decades ago. Today’s action by the White House is in line with that law. Unlocking the set top box and ending monopoly policy is change consumers and free market conservatives can all believe in.”

The Council of Economic Advisers released a 17-page brief outlining administration goals. It underscored the importance of antitrust authorities in the federal government in addition to government agencies helping to promote competition, such as in the FCC’s design of the broadcast TV incentive auction. “Other recent examples include government actions on cell phone unlocking, net neutrality, standards-essential patents, and defense acquisition and procurement,” the brief said. But more must be done, it argued: "Recent indicators suggest that many industries may be becoming more concentrated, that new firm entry is declining, and that some firms are generating returns that are greatly in excess of historical standards."