The Federal Communications Commission is reportedly proposing new regulations that could give cable customers a choice of buying their own set-top boxes instead of renting the default company-offered device.
This move could potentially lower cable bills, as subscribers currently pay rental fees for set-top boxes that advocates say are too expensive.
The new proposal, according to the Wall Street Journal, gives customers an option on whether to use their service provider’s set-top box and cable app, or peruse the market for competing choices. This could challenge the status quo for companies like Comcast (CMCSA), DirecTV (DTV), and Time Warner (TWX), while providing an easier route into the living room for third-party providers like TiVo (TIVO) and even Google (GOOG).
The leasing of set-top boxes has been a financial boon for cable companies, according to a report issued by lawmakers last year. In July, Senators Edward J. Markey (D-Mass.) and Richard Blumenthal (D-Conn.) estimated that the set-top box rental market may be worth around $19.5 billion to cable companies, and the average annual cost of having these cable boxes came to $232 per household. They based that off a calculation that the average home had around 2.6 set-top boxes.
Two consumer groups, the Consumer Federation of America and Public Knowledge, sent a letter to the FCC at the beginning of this year with an estimate that subscribers were overpaying by $6 billion to $14 billion annually through the payment of these fees.
It would seem the FCC is making a move to address the alleged overcharging, and according to the Journal, cable service providers will mount a resistance to the proposal. More than 40 telecommunications and media groups are expected to announce a coalition to oppose the plan by FCC chairman Tom Wheeler, reported The Journal.