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."

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