Set-top boxes

Cable Feuds With Senate Dems Over STBs

The cable industry is squabbling with two key Senate Democrats over their new report lambasting the lack of choice and competition in the US pay-TV set-top box market and calling for new restrictions on integrated cable set-tops.

The National Cable & Telecommunications Association (NCTA) fired off a sharp retort to Sens. Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.) Thursday after the two lawmakers released their report. The cable trade group refuted the assertion by the two senators that pay-TV subscribers are shelling out too much to rent their set-tops and that the set-top market lacks real competition.

"In today's competitive video marketplace, American consumers have a growing number of choices of video providers and ways to access video content on multiple devices in and out of the home," the NCTA said in its statement. "Retail devices including TiVo, Roku and Apple TV have been purchased by tens of millions of consumers. Pay TV and content providers have embraced the mobile marketplace and offer robust apps that have been downloaded 52 million times on Apple and Android devices."

The report by Blumenthal and Markey, based on information gathered from pay-TV providers late last year, found that an overwhelming 99% of American consumers rent their set-top boxes directly from their pay-TV providers rather than buy the boxes at retail. That's despite repeated attempts by Congress and the Federal Communications Commission (FCC) to crack open the set-top market and make it much more competitive.

"Consumers should have the same range of choices for their video set-top boxes as they have for their mobile phones," Markey said. "Consumers should not be forced to rent video boxes from their pay-TV provider in perpetuity."

Want to know more about the pay-TV set-top market? Check out our dedicated cable set-top box content channel here on Light Reading.

The Markey-Blumenthal study also found out that the average US pay-TV household spends about $89 a year renting a single set-top, or $7.43 a month. With pay-TV customers renting an average of 2.6 set-tops per household, that total translates to subscribers spending $232 a year on all STB rental fees, assuming no discounts for multiple boxes in the home.

Further, the report estimates that the total US set-top rental market may be worth more than $19.5 billion a year, based on publicly available data indicating that there are approximately 221 million leased set-tops installed in pay-TV homes today.

Expressing regret that Congress killed the CableCARD mandate when it passed the STELA Reauthorization Act of 2014 last fall, the two senators are calling for some new kind of ban or restriction on integrated cable set-tops. "We need a new, national consumer-friendly standard that will allow consumers to choose their own video box irrespective from their pay-TV provider," Markey said. (See Obama Signs CableCARD Death Warrant.)

Not surprisingly, the NCTA, which fought long and hard to eliminate the dreaded CableCARD mandate, vehemently disagrees. "In 2014, an overwhelmingly bipartisan Congress wisely enacted legislation that sunset an unnecessary and expensive mandate that saddles consumers of cable leased set-top boxes with high costs and higher energy bills," the group said. "And as even TiVo has acknowledged, elimination of the integration ban will not affect the market for retail devices and CableCARDs will continue to be available. It's unfortunate the Senators Markey and Blumenthal continue to misrepresent the text and impact of the STELAR Act."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

mendyk 7/31/2015 | 3:48:14 PM
Re: Jeebus I'm guessing that most people are resigned to STB rental fees as being part of the overall cost of the service. And I agree that most video subscribers simply have no interest in buying their own boxes. I'd put that in the Life's Too Short column.
Mitch Wagner 7/31/2015 | 3:41:28 PM
Re: Jeebus After this long trying to introduce choice into the set-top box market, maybe consumers just aren't interested. The cable companies make a compelling case here. In a world where you can buy a cheap OTT video device on a USB stick from Amazon or Google, how can we be said to lack choice in video options?
cnwedit 7/31/2015 | 2:23:31 PM
Re: Jeebus l am paying $20 a month (well, $19.90) to rent two wireless receivers as part of AT&T's U-verse service. It was the one charge they didn't inform me of upfront, and it makes me angry every month. 

I was also ticked at Spirit the first time I chose their "cheap" airfare and found out they charge extra for carrying my purse on the plane. The difference is, I'll never fly Spirit again, while I can't get away from the STB charges on payTV.

I suspect when more of us have cut the cord, the cable industry will find a way to compete ore effectively by eliminating those charges, but until that happens, we're stuck. 
thebulk 7/31/2015 | 2:14:03 PM
Re: Jeebus @Sterling, I have learned its best to now ask law makers what they think. No matter what side they are on. Thinking seems to be a bad thing.
Sterling Perrin 7/31/2015 | 1:59:08 PM
Re: Jeebus I wonder what the senators think of Spirit Airlines? 

thebulk 7/31/2015 | 1:52:39 PM
Re: Jeebus @mendyk, though I am 100% for freedom of speech I would back a bill like that in a second. Hell, I would support an all out ban. 
thebulk 7/31/2015 | 1:51:21 PM
Hate the box Even when I worked for a cable company and got the service and box for basically nothing I still had several Rokus around the house that I used more than that STB unless it was for a HD PPV at the time. I agree the idea to rent the box is pretty bad and they are limited in selection, but since they all pretty much offer the same featuers I don't see the limited choice as an issue. I doubt the cable companies are going to subsidise the boxes like mobile networks do with  phones. 
mendyk 7/31/2015 | 1:47:18 PM
Jeebus Among all the egregious developments occurring in what is rapidly becoming a fee-based economy, rental charges for set-top boxes have to be near or at the bottom of the list. Maybe Sens. Blumenthal and Markey should turn their attention to something more serious, like proposing legislation that limits the number of hours per week that a Kardashian is allowed to appear on a cable network.
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