I’ve Seen the Future of Internet and Cable, and It Is Awesome
We’re getting there… To that glorious future, we are. Advancements in streaming video, both live and on demand, as well as in over-the-top digital programming are bringing us a ton of new, exciting content. The discussion is being brought to the mainstream and streaming video is being hailed as a savior by prominent content creators. Just ask Breaking Bad creator Vince Gilligan and David Cross, star of a number of shows (some of which are making a return to the airwaves), how streaming video has catapulted their careers into major success.
But there’s still a number of hurdles to clear before we actually get to that futuristic landscape of internet and TV. The President has weighed in with the FCC to make some regulatory changes to the old gatekeepers of the internet superhighway, and I think it promises some amazing returns both for consumers and creators.
Internet & Cable Companies Face Pressure to Loosen Grip on Consumers’ Set-Top Boxes
Like it or not, your cable company has been charging you unfair monthly fees for your cable box – and, until now, there’s nothing you’ve been able to do about it.
According to the White House, the average American household pays $19 a month, $231 a year or more than $1,000 over four years, to lease a set top box from their cable provider.
And, according to the Commander in Chief, this needs to stop.
Last week, President Obama announced his support of a proposed rule change from the Federal Communications Commission which would allow competing companies to offer their own set-top boxes, not just the local cable utility.
Verizon has already announced plans to release a new model of its set-top box that could “substantially” change how the cable provider delivers its services to FiOS customers.
The Obama administration said this move will increase competition, stimulate innovation and, in the process, hopefully save cable subscribers money.
He compared the current rules to the early 1980s when only local phone utilities could provide the most standard telephones to customers, usually with a monthly lease fee.
When the FCC voted to deregulate this practice 30 years ago, it allowed any phone provider to offer their own style, features and options (offering colors other than black, introducing call waiting, three-way calling, and caller ID) . The actual connection through a local utility never changed, but consumers now had freedom to choose how they could access it.
Obama said the removal of this rule led to a boom in telephone innovation that’s still going on. Rather than everyone having the same type of plain rotary device, other providers began developing touch-tone phones, cordless phones, answering machines, voice mail and digital phones. Today, though fewer Americans use landlines, you can still choose your own model of mobile phone and and type of wireless contract and provider.
In February, the current FCC board voted to consider the cable set-top box deregulation proposal and is expected to finalize a decision later this year.
What The Future of Internet and TV Will Look Like
The president’s endorsement provides support for advocates of deregulation, and it has already drawn enthusiasm from consumers and competing companies who call it “liberating”.
Mike Godwin, in a piece published by Slate, says he can see why the FCC is doing the right thing on set-top boxes. Godwin concludes that the effects of the proposed rulemaking are far greater than many advocates had even hoped for and may ultimately replace hardware updates with much less cumbersome and less expensive software updates:
Upgrading and changing Internet and TV services through software, instead of relying on hardware upgrades, is exactly what the FCC is up to in this latest rulemaking, enabling you to hang your own devices, not something you rent, off your TV service.
More speed, more devices, and more choices—that’s a huge win. In effect, the commission’s proposed rulemaking would allow software-based alternatives, working through our Internet/pay-TV connections, to replace our set-top boxes.
As streaming video and OTT (over-the-top) content becomes more and more prevalent in mainstream discussions, it’s no surprise that the pressure is on cable companies to get with the times.
The Open Technology Institute has supported the rule change, calling the set-top boxes as we know them now “antiquated,” and concluding that it would stimulate third-party competition:
The president recognizes what consumers have long known: the market for set-top devices is broken. The antiquated boxes that most consumers rent from their cable provider are needlessly overpriced, difficult to use and drain more energy than a refrigerator.
Unsurprisingly, the FCC plan has run into opposition from cable providers and dish providers. Besides the expected concerns about cutting into market share and hurting revenue at a time when they’re already seeing a growing number of ‘cable cutters,’ some providers fear that increased access to customer’s TV’s will provide competitors with confidential information about viewing habits while potentially violating customer privacy.
Providers also warn of potential disruptions in programming, advertising contracts and licensing agreements if different companies are free to customize their own boxes, but may filter out some channels. They accuse the White House of weighing in on a sensitive business matter solely to score political points before Obama leaves office.
AT&T, which owns DirecTV, is especially opposed to this plan, as is an industry group called Future of TV Coalition and pro-business members of Congress.
However, Obama doesn’t seem fazed by the criticism, and the potential deluge of innovation should be enough to get anybody but the cable companies on board. Along with his endorsement of the FCC proposal, Obama included an executive order encouraging federal offices to seek other efficiencies and innovations, even if it means disrupting established practices.