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Why Are We Still Fighting About Set-Top Boxes?

David Young posted in Policy PolicyBlog on September 29, 2011, 12:38 PM EST

Yesterday, there was an interesting exchange on NCTA’s blog between Michael Powell (Former FCC Chairman and current CEO of NCTA) and Gary Shapiro (CEO of the Consumer Electronics Association) about the need for and advisability of so-called “AllVid” rules. In his blog, Michael does a great job of demonstrating why AllVid rules are not needed. In defending the need for regulations, Gary pointed out in comments that 15 years ago, the Telecom Act included provisions (Section 629) calling for the FCC to impose regulations that would make set-top boxes available for purchase in retail stores.

It is true that Congress wanted cable boxes in retail stores, but it turns out consumers didn't want to buy cable boxes. The proof of that is Direct Broadcast Satellite (DBS). Satellite was excluded from section 629's obligations in large part because consumers bought satellite boxes in retail stores rather than leasing them from the DBS service provider. But it turns out that consumers didn't want to buy satellite boxes and instead wanted to lease them. As a result, both DBS operators today provide consumers with leased equipment and I'm not sure if you can still buy satellite boxes in retail stores even if you wanted to.

More to the point, however, is that the whole concept of a traditional set-top box is quickly fading in relevance. Broadband Internet-connected smart video devices are being sold by the millions - Roku, Boxee, Blu-ray players, Smart TVs, etc. – not to mention game consoles, tablets and smartphones. These devices are able to pull content from a variety of sources online. Multichannel video providers - cable, telco and satellite - are scrambling to make their own services available on as many of these devices as they can as quickly as possible and many were demonstrated at Gary's amazing Consumer Electronics Show. And we continue to see new evidence of this every day.

Very soon, the smart video devices that consumers are buying every day will work on any video provider’s service. This was the motivating vision behind both 629 and the AllVid proposal and the good news is that it is happening much faster than anyone could have possibly predicted just 18 months ago when the National Broadband Plan was released. Rather than having the FCC double down now on what everyone acknowledges has been 15 years of failed regulatory policy, it is time to wake up and realize that the goals of 629 have been achieved and move on to more pressing matters like reforming Universal Service for the broadband era.

It's time to let go of the grievances of the past and focus on the reality of today - a reality where consumer electronics makers, programming distributers, application developers and content creators are working together to bring consumers an AMAZING array of choices.

Comments (7) | Permalink

Tags: STB set-top box NCTA CEA DBS AllVid FCC Section 629 Rokuy Boxee Smart TV choice consumers

Reader Comments

What is even more ridiculous is that under the current statute. Set-top boxes that are capable of receiving digital broadcast reception must include an analog broadcast tuner as well. Transparent Video Systems, TIVO and Nagravison have filed a request for a waiver of this requirement although there are virtually no Analog Broadcasts in the US. http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0907/DA-11-1516A1.txt This requirement basically requires you to have a MPEG Encoder into the STB even if there isn't a need for it. www.transparentvideo.net The problem is that the consumers and market wants to develop new products that are more cost effective and desirable and are being hampered by these old statutes. Why is the FCC about CableCards when there are many other encryption systems working in the world that are less money and just as secure. These technologies cost more than then the STB itself. What would happen if the government tried to set standards for computers in 1980 Apple would not exist today. Let the marketplace make decisions in the US. If we don't other countries will and we will fall further behind. Norman Gillaspie

Norman Gillaspie posted on 9/29/2011 3:10:42 PM

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The TiVo STB is supported by a service so in effect it is a leased STB as well. You have to pay the CATV operator and TiVo.

Norman Gillaspie posted on 9/29/2011 3:40:53 PM

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The goals of 629 have not been realized and are no where near being realized. The innovation in the setup box space is pitiful despite all the companies you mentioned that are trying. The fact is that the most popular programming in America is delivered via MSOs and as long as none of them allow over-the-top services integrated with that content, the goals 629 will not be realized. Until a customer can choose their hardware AND their software and not be forced to forfeit access to content included in their package, it will not be realized. Set-top boxes are basically where cell phones were before the iPhone. Sure everyone had one, but no one was happy with theirs. DVRs are the smartphones, and while there are plenty of them, most chose the basic box. The difference is that while Apple could make a deal with the largest wireless provider in the US and sell its hardware AND software, there is no such opportunity in the set-top box market. And it isn't that people don't want to buy set-tops, it is that they want real choice. When DirecTV used to let people buy hardware, there were 10 models to chose from and even a TiVo. Now there are is only one choice and that choice isn't that great. There isn NOT an AMAZING array of choices. In fact there isn't even a single decent one. No, there has been almost been no innovation in the set-top box market since TiVo released the DVR 10 years ago.

Ben Drawbaugh posted on 9/29/2011 7:59:27 PM

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Gary's a bit clueless about the TV gear that his members sell in retail stores, both brick and mortar and on-line. See my comment on the blog you reference.

Richard Bennett posted on 9/29/2011 10:44:01 PM

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Verizon's billing continues to be a problem. Inaccuracies and unexpected charges for unrequested services appear on our bills every month. Access to customer service is available only during weekday business hours and typically requires a 30-40 minute wait before talking with a representative. This typically results in a promise to change errors, but to date, we have yet to have a matter corrected in a single call. I'm sure this is a business model that results in Verizon receiving payments far exceeding services provided. Very disappointing and unethical.

Brad posted on 10/1/2011 1:44:34 PM

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The reason that we are still fighting over set-top boxes is because the NCTA and Telco MVPDs have not proven trustworthy in this debate over the past 15 years... we simply refuse to trust that MVPDs won't use purported security issues (and cumbersome licensing processes) as a thinly-veiled excuse to assert more control over content than is necessary. Despite the fact that MVPDs have used every trick in their arsenal to try to discourage the use of CableCards (including, in my own direct experience and those of many others in the various online blogosphere on the subject, outright lies about pricing, availability and capabilities), CableCard use is actually increasing, and is expected to increase even more now that the newest FCC rules mandate that MVPDs can no longer require truck rolls for CableCards where they do not require them for their own hideous STBs. AllVid is necessary because the MVPDs should not and cannot be allowed to choose which devices win in the marketplace. If a device meets basic security requirements, it should be able to access MVPD content that the consumer has contracted and paid for, and has paid for handsomely. For MVPDs to argue that technical innovation has rendered the the FCC's Section 629 mandates obsolete based on a very limited number of examples of MVPD forays into making available on certain devices through proprietary protocols, is disingenuous. It's not that consumers did not want to but their own set-top boxes... it's that they didn't want to have to have them at all when the security protocols should have been included in the basic architecture of the system from the headend to the tv set. And now that we Consumers want to be able to connect all of our devices and enable access to the MVPD content we pay for in the way that we see fit (subject to the basic security rules and standards we can all agree on) and not as the MVPD would dictate, the AllVid gateway is the best path forward to enabling that reality. In this fight, consumers educated on the subject are firmly behind the CEA, becuase it is the CEA entrpreneurs that have innovated and forced changes in the marketplace; and the MVPDs are only now begrudgingly accepting a new paradigm has emerged and threatens extinction to the old paradigm of monopoly and oligopoly that guaranteed a revenue stream with little or no effort. Evolve or die, and let AllVid lead the way!

William Aprea posted on 10/5/2011 5:43:25 PM

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I submitted a comment last week. Will it be posted?

William Aprea posted on 10/11/2011 5:03:40 PM

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