The chairman of the Federal Communications Commission is keeping open a controversial proceeding drawn up by his Democratic predecessor to fundamentally change the set-top box market, despite calls from fellow Republicans in Congress to close it.
Chairman Ajit Pai responded to the request from congressional Republicans in letters released Friday. In those letters to 19 lawmakers, Pai explains it would be “premature” to close the docket because the proceeding’s notice of proposed rulemaking, which the agency issues to get feedback before drafting and passing actual rules, “teed up certain issues that were not related to my predecessor’s flawed set-top box scheme.”
Shortly after replacing Democrat Tom Wheeler as chairman of the FCC, Pai pulled from circulation a number of orders awaiting votes including the set-top box docket. The proposal was designed to give cable and satellite TV subscribers an alternative to paying monthly fees to rent boxes from Comcast, Verizon, and others (costing the average American household $231 annually, according to congressional Democrats). It would also allow third parties like Google to build and sell set-top boxes, on which subscribers could download apps from their TV provider and view content.
The plan drew criticism even from Democrats in Congress and at the FCC, while Republicans led the call for it to be abandoned, warning it would jeopardize copyrights, advertising, and minority programmers all while exceeding the agency’s authority.
“We are writing to ask that you close the docket on the set-top box proceeding,” House Republicans wrote to Pai in January, “and signal clearly to consumers, content producers, consumer electronics manufacturers, and video programming distributors that the commission’s consideration of its set-top box proposal is at an end.”
Pai was no fan of the proposal either, saying the FCC’s goal “should not be to unlock the box; it should be to eliminate the box” when it advanced the NPRM in 2016.
“If you are a cable customer and you don’t want to have a set-top box, you shouldn’t be required to have one. This goal is technically feasible, and it reflects most consumers’ preferences — including my own,” Pai said while referencing the success of app-based video streaming from providers like Netflix, Hulu, and Amazon Prime. The FCC’s final plan required pay-TV operators to issue apps compatible with smartphones, tablets, Rokus, Apple TVs, and other devices commonly used for streaming.
But closing the door now, he explained to lawmakers in the April letter, would make it harder to do away with current regulations on the market, like the CableCARD reporting requirement.
“I do not want to impede our ability to take appropriate action with respect to this regulation in an efficient manner by immediately closing this docket,” Pai said.
The CableCARD was an early shot at Wheeler’s idea. The one-way CableCard allows a compatible third-party device not rented by cable providers to access their TV content.
Under FCC rules cable giants like Comcast and Time Warner Cable have to periodically report to the agency the number of CableCards they’ve deployed to subscribers. For example as of 2014, Comcast, Time Warner, Cox Communications, Charter Communications, Cablevision Systems, and the next four largest cable providers together deployed more than 623,000 CableCards, compared to more than 50 million set-top boxes. Senate Democrats estimate those boxes rake in $20 billion for cable companies annually.
While the docket is staying open for now, Pai assured lawmakers it won’t advance under his watch.
“Because I do not believe that the set-top box order circulated by my immediate predecessor furthered this goal, I have removed it from circulation,” Pai wrote. “As such, it is no longer pending before the commission, and I do not intend to resurrect it.”
Also on Monday, the NCTA – The Internet & Television Association, an industry lobbying group, released a report highlighting that the cable industry in 2016 supported more than 2.9 million U.S. jobs, representing a total economic impact of more than $421 billion. The report notes a rising number of workers who rely on jobs in the cable industry, increasing investment in broadband deployment, and growing investment in television programming by basic cable networks.