Yesterday we noted how the FCC was planning to unveil some new guidelines that would kill obnoxious cable set top box rental fees, by opening the segment up to hardware competition. In short, the FCC wants users to be able to use the hardware of their choice to connect to the legacy cable TV network, hopefully resulting in better gear at cheaper prices for consumers.
99% of cable subscribers pay $231 in fees in just a single year for set top hardware. Hardware that's often barely worth a full year's worth of payments, much less the years of such fees most consumers pay.
Obviously the cable industry wants to protect the $20 billion it collects annually in fees for this sub-standard hardware.
As such, groups like the cable industry's chief lobbying organization the NCTA got right to work trying to demonize the proposal, claiming in a blog post that the FCC's plan is really part of a secret cabal by "Big Tech" (Google, Netflix, Roku and others) to demolish the amazing innovative power of the existing cable business.
"By forcing new government mandates on network providers and content creators, the FCC may intend to reward Google handsomely, but in the process it will ignore contractual freedoms, weaken content diversity and security, undermine important consumer protections like privacy, and stall the creative and technical innovation that is driving positive changes in today’s TV marketplace," states the NCTA.
Again, that's code for: we don't want to lose $20 billion in captive revenue annually.
The FCC's proposal doesn't really change things all that drastically, it just requires that cable providers provide software data that can be used in third-party boxes. Cable is allowed to continue offering ugly, dysfunctional, and over-priced cable boxes, and subscribers are allowed to keep them if they wish. Hardware competition will just require that the cable industry, for the first time ever, actually earn those consumer dollars.
Granted, with the lack of competition in the broadband space, any lost revenue will more than likely be made up for in the form of a higher broadband bill.