White House again comes out in favor of ending cable set top box monopoly in blog post
But cable industry strikes back, accusing the administration of injecting ‘politics and inflammatory rhetoric into a regulatory proceeding,’ tearing ‘down the value of content’
The White House today again came out in favor of ending the cable set top box monopoly as Jason Furman, Chairman of the Council of Economic Advisers, and Jeffrey Zients, Director of the National Economic Council and Assistant to the President for Economic Policy, jointly authored a blog post for the White House website.
“Today, building on efforts over the last seven years, the President is launching a new initiative to stoke competition across our economy, so that no corporation can unfairly squeeze their competitors, their workers, or their customers at everyone’s expense,” the administration said. “Stronger competition matters because it can deliver lower prices, higher quality, and better customer service for consumers. It gives workers more of a voice and can help strengthen wage growth. And it’s what entrepreneurs need to get a fair shot at growing their businesses and creating jobs.”
The 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.”
The White House initiative has gained the support of several organizations.
“Competition is the key to unlocking the set top box and unleashing innovation. Ending monopoly policy and injecting competition policy is a proven way to create American jobs, new markets and investment. Entrepreneurs are eager and ready to build a better box and apps of the future, and the White House wants to accelerate that process,” said Chip Pickering, CEO of INCOMPAS, the Internet and competition association.
“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. New boxes from new companies will create a competition ecosphere that benefits consumers, innovators and content creators.”
The Consumer Video Choice Coalition also voiced support: “We are pleased President Obama is calling for an end to the set top box monopoly. Unlocking the box will bring competition, innovation and lower prices that benefit consumers and entrepreneurs alike. Being forced to rent an old box is costing American families $231 dollars per year. The pay TV industry controls 99 percent of the set top box market, and prices have risen by 185 percent over the past two decades. Over the same time period, prices in competitive markets for cell phones and computers have dropped 90 percent.”
But lobbyists for the cable companies expressed their displeasure for the initiative.
“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,” said Michael Powell, CEO of the National Cable & Telecommunications Association said. “Consumers and regulated companies have the right to expect decisions affecting their businesses are made based on sound analysis of the record and not the political interests of the executive branch. 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.”
“Perhaps the strategists at the White House believe their intervention is good politics. But it is bad government, undermining the independence of the FCC and shattering any faith in impartiality and fundamental fairness. One would hope the FCC Commissioners would resist being annexed by the executive branch. But that hope is sadly faint,” Powell said.
“A FCC technology mandate will decimate the creative industry, rip up licensing protections, tear down the value of content, and strip away consumer privacy protections,” the Future of TV Coalition said in a statement. “The market is already moving toward a boxless future powered by apps. The Google proposal the White House endorsed today will box consumers into yesterday’s technology and impede the innovation consumers so desperately want.”