President Obama Backs Wheeler's Set-Top Proposal, Big Time - Broadcasting & Cable

President Obama Backs Wheeler's Set-Top Proposal, Big Time

Calls for opening boxes, other pan-agency actions to promote competition
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The White House early Friday announced it was putting the administration's muscle behind an effort by FCC chairman Tom Wheeler to make set-top box information available to third parties and app developers in an effort to spur navigation device competition.

The White House did not say it was trying to promote "competition, competition, competition"—Wheeler's mantra—but it might as well have.

A White House blog post headlined by Jason Furman, the president's chief economist, said that "no corporation can unfairly squeeze their competitors, their workers, or their customers at everyone’s expense."

He then cited backing the set-top proposal as example A, saying the president was "calling on the FCC to open up set-top cable boxes to competition." He added,"this will allow for companies to create new, innovative, higher-quality, lower-cost products. Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want — including their cable or satellite content, as well as online streaming apps — in one, easier-to-use gadget."

The White House called the set-top proposal the "mascot" of a new initiative, saying it was the "stand-in" for "what happens when you don’t have the choice to go elsewhere—for all the parts of our economy where competition could do more."

That "more" will be an executive order to departments and agencies to make "further progress" in promoting competition across all sectors.

While the blog was not bylined by President Obama, it evoked his very public support for Title II reclassification by the FCC.

The National Teelcommunications & Information Administration, the President's principal communications policy adviser, signaled the White House's support in comments to the FCC Late Thursday (April 14).

"We are disappointed that White House political advisers are choosing to inject politics and inflammatory rhetoric into a regulatory proceeding by what is supposed to be an independent agency," National Cable & Telecommunications Association president Michael Powell blogged in response to the Whtie House announcement. "Consumers and regulated companies have the right to expect decisions affecting their businesses are made based on sound analysis of the record and not the political interests of the executive branch. To see the White House take political credit for the actions of the 'independent' agency and direct it to reach a specific conclusion even before the record has been assembled, shatters that faith and undermines the Commission’s credibility."

The White House announcement capped a flurry of activity on the set-top front this week, with the NCTA hosting a demonstration of navigation devices already in the market and diversity groups arguing Wheeler's proposal could adversely affect access to diverse content and the business model that supports it.

"Perhaps the strategists at the White House believe their intervention is good politics," continued Powell, "[b]ut it is bad government, undermining the independence of the FCC and shattering any faith in impartiality and fundamental fairness. One would hope the FCC Commissioners would resist being annexed by the executive branch. But that hope is sadly faint.

"Despite our doubts, we will continue to press our concerns vigorously about an ill-considered regulatory proposal that is unlawful, unnecessary, unworkable and unfair."

"The President's support for set-top box competition virtually ensures that consumers will finally see a $15 billion per year rip-off exploded by new electronic devices streaming innovative video services that challenge cable monopolies," said Gene Kimmelman, president of Public Knowledge, following the White House announcement.

“We are pleased President Obama is calling for an end to the set top box monopoly. Unlocking the box will bring competition, innovation and lower prices that benefit consumers and entrepreneurs alike," said the Video Choice Coalition.

“Being forced to rent an old box is costing American families $231 dollars per year. The pay TV industry controls 99 percent of the set top box market, and prices have risen by 185 percent over the past two decades. Over the same time period, prices in competitive markets for cell phones and computers have dropped 90 percent."

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