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Consumer Groups: New Bill Trying to Kill CableCARD, Competition
by Karl Bode 11:22AM Friday Dec 06 2013
For many years CableCARD technology has struggled to see adoption for a number of reasons. Incompetent regulators and cable operators deserve an even share of the blame. Regulators passed problematic rules they then failed to enforce, while to protect set top box rental revenues and overall market control, operators rarely advertised the technology and made installations frequently nightmarish and expensive.

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When sub-par CableCARD adoption stats emerge annually, the cable industry then shrugs and incorrectly proclaims consumers just aren't interested.

That perfect storm of incompetence, sabotage, complications and high costs hasn't been enough to finally kill off the CableCARD, and so the cable industry has turned to Congress to accomplish that goal.

The "Consumer Video Device Cost Savings Act" aims to kill off the authority of the FCC to mandate that operators have to use CableCards in their own set tops. The law appears to be based on draft legislation written by the cable industry, and is being pushed through Congress by Representatives Robert Latta (R-OH) and Gene Green (R-TX).

Not too surprisingly, consumer groups have voiced significant opposition to the bill, Public Knowledge, Consumer Action, Consumers Union, Free Press, the National Consumers League, and the New America Foundation's Open Technology Institute yesterday sending a joint letter to Greg Walden insisting their bill will "harm consumers, eliminate competition, and hold back video innovation."

"It's important that the FCC maintains the power to promote video device competition," Public Knowledge VP Christopher Lewis states. FCC rules make it possible for competing electronics box manufacturers to create products that keep prices low and push forward innovation. If competing video device makers are eliminated, there is little to no incentive for large operators to keep their devices affordable or easy to use. We've seen what happens without device competition, and it's important that the retains its authority."

The broadband and cable TV industry has been pushing hard on numerous fronts to limit the FCC's authority over industry, most notably with Verizon's lawsuit against the agency over network neutrality rules. The letter argues that the bill takes things further by restricting FCC authority to the point where their toothlessness could impact other consumer issues.

"High programming costs, unwanted bundles, and a lack of competition make watching TV a costly affair," the letter notes. "But some of the most pernicious drivers of costs to consumers are below-the-line fees--unadvertised charges that cable operators slip onto viewers' bills to hide the true cost of a cable subscription."

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Santa Fe, NM

2 recommendations

It's not just about box revenue...

Cablecos want to control the entire TV viewing "experience" and the ancillary revenue associated with that. That means DVR fees, extra apps that run on the settop box, etc. Cablecards limit those opportunities because they only do TV channels.

It's the old "I don't want to be a dumb pipe" argument.