trending Market Intelligence /marketintelligence/en/news-insights/trending/4Sd9KcpJZsJ9WOlvkQyYjQ2 content esgSubNav
In This List

Set-top boxes and Congress' history of mixed messages

Case Study

Central European Broadcaster Monetizes Content with a New Online Streaming Service


Debt Ceiling Debate: IR Teams Should Prepare for Potential Market Downturns


Insight Weekly: Loan-to-deposit ratio rises; inventory turnovers ebb; miners add female leaders


Next in Tech | Episode 117: Transformation in manufacturing

Set-top boxes and Congress' history of mixed messages

Opinions expressed in this piece are solely those of the author and do not represent the views of SNL Kagan.

Republican members of the House Energy and Commerce Committee want the FCC to let sleeping set-top boxes lie. But 21 years ago, it was Congress that first poked the beast between the eyes.

At issue is a provision in the 1996 Telecommunications Act that directed the FCC to create rules to make set-top boxes available for purchase at retail stores.

The commission has been trying -- and failing -- for more than two decades to live up to that mandate, with former FCC Chairman Tom Wheeler's set-top box proceeding being the most recent effort. Wheeler initially sought to "unlock" the set-top box by requiring pay TV providers to share programming, discovery and security information with third-party device manufacturers and app developers, but later switched tacks and put forward a revised proposal that promoted an apps-based approach. Both proposals attracted strong opposition from the pay-TV industry, programmers and even other federal agencies.

Now, several Republican members of the House Energy and Commerce Committee have asked the new FCC chairman, Ajit Pai, to officially close the docket on Wheeler's set-top proceeding.

But the question remains: What about the legal mandate from 1996?

In their Jan. 25 letter to Pai, the Republican representatives made no reference to the Telecommunications Act. Instead, they focused on what they saw as the many shortcomings of Wheeler's efforts.

"The set-top box proposal, meant to bring choices to consumers, would have the opposite effect, delaying the benefits of new programming and diverse content from reaching consumers," according to the letter, which was signed by House Energy and Commerce Committee Chairman Rep. Greg Walden, R-Ore., and House Communications and Technology Subcommittee Chairman Marsha Blackburn, R-Tenn., among others.

The legislators ultimately conclude: "We believe that the best way to foster real choice in video programming delivery and bring consumers the services they want is to permit these innovations to flourish in all parts of the video ecosystem, not through a top-down Federal mandate."

But a top-down federal mandate is exactly what prompted the FCC to pursue the commercial availability of set-top boxes in the first place.

As Wheeler repeatedly said during his last year as FCC chairman, "The law says the commission 'shall' provide for competitive choice."

It's possible that the leaders of the Energy and Commerce Committee expect the 1996 law, which amended the Communications Act of 1934, to be updated in the near future.

After all, Walden has spoken for years about the need for reform, saying in a 2014 joint blog post with Rep. Fred Upton, R-Mich., that the Communications Act was "written in a time when the telegraph was the prevailing technology and last updated when dial-up Internet was considered lightning speed." A year earlier in 2013, the pair had launched an initiative, known by the Twitter-friendly moniker "#CommActUpdate," to review and update the country's communications laws.

If the law is updated, the mandate could be removed altogether.

Or it's possible that the committee leaders believe the free market has already fulfilled the mandate without government intervention. "Cable, satellite, and over-the-top video services are innovating, bringing their services to apps on new platforms, and responding to consumer demand," the letter states.

But that would mark a departure from an April 2016 letter signed by Walden and Rep. Yvette Clark, D-N.Y., which noted that although it had been 21 years since Congress had directed the FCC to "cultivate a competitive marketplace for unaffiliated set-top boxes … 99 percent of households still rent these boxes from their video provider."

Another possibility is that the Energy and Commerce Committee would like Pai to close the door on Wheeler's 2016 set-top box proceeding but put forward his own proposal at some point in the future. The letter, however, included no directions to do so.

A spokesman from the Energy and Commerce Committee did not respond to requests for comment about these possibilities as of press time.