With a Trump presidency on the horizon, the Federal Communications Commission’s long-contested plan to shake up the set-top box market appears to be dead.
Earlier this week, Republicans in Congress urged FCC Chairman Tom Wheeler to avoid looking at any contested policy issues until President-elect Trump, whose administration is expected to be far less open to telecom and cable industry regulation than the current one, takes office.
In a letter sent to Wheeler on Wednesday, Sen. John Thune (R-S.D.) requested the FCC to not direct its resources to “complex, partisan, or otherwise controversial items” that the Trump administration or forthcoming Republican-majority Congress will “have an interest in reviewing.”
Representatives Fred Upton (R-Mich.) and Greg Walden (R-Ore.) sent a similar letter (via Ars Technica) on Wednesday, noting how Democrats in Congress made a comparable request of the FCC just before President Obama took office in early 2009.
Later that day, the FCC complied, deleting all of the major items scheduled for its monthly Open Commission Meeting on Thursday. Those items included votes on funding to expand mobile broadband networks, lowering price caps on small businesses reliant on telecom company special access lines, and requiring TV networks to expand the availability of audio descriptions for the blind, among others.
As a result, Thursday’s meeting lasted less than 10 minutes. Wheeler explained that any item opposed by one commissioner was dropped.
How the FCC wanted to kill the cable box
That leaves Wheeler’s plans for cable box reform in serious doubt. Though Wheeler said the FCC will “keep trying” to come to a consensus, Republican Commissioners Ajit Pai and Michael O’Reilly have consistently objected to Wheeler’s proposals, and they will soon have the backing of Congress and the White House.
The FCC would not say if its decision to delete objected items at Thursday’s meeting will apply to the set-top box proposal as well, merely noting that it will remain “under consideration on circulation.”
The Commission first voted to end cable company control over the set-top box market in February. At the time, Wheeler wanted cable and satellite companies to give their programming information to third-party streaming device makers, who would then be able present pay-TV content on their boxes, through their own user interfaces.
- Thomson Reuters
So, instead of needing to rent a cable box – which Wheeler has claimed to cost the average American household $231 per year, though that figure has been disputed – you would have been able to watch cable TV through a Roku, Apple TV, and the like.
The proposal won the approval of President Barack Obama, but did not go over well with the cable industry, which cited concerns over piracy, disrupted licensing deals, and the technical challenges of making apps for several platforms. It also threatened the billions of dollars in revenue the industry makes from set-top box fees each year.
After months of objections, Wheeler issued a revised plan in September, which made a number of concessions to industry concerns. Instead of giving pay-TV content to a Roku or Google, cable and satellite companies would only be mandated to make that content available in apps for major streaming platforms, which they would have full control over. The actual look of cable TV wouldn’t need to be any different; you just wouldn’t have to rent a separate box to watch it in full.
However, even though Wheeler’s revision was largely based on a counterproposal presented by the cable industry earlier in the year – and though several cable companies have made their content available in apps as it is – the cable industry has objected. This is largely due to a provision that would let the FCC set a universal license, instead of letting pay-TV companies negotiate licensing rates with streaming device makers on a case-by-case basis (thus allowing them to ask for more cash from some than others).
- Zach Gibson/Getty Images
This was enough to force the FCC to delay its vote on the issue later that month, as Democratic Commissioner Jessica Rosenworcel expressed doubts over those licensing terms. No official progress has been made since.
Where a Trump FCC goes from here
Now, it appears the cable industry will win out. Though Wheeler is technically allowed to stay on as Chairman through 2018, the Trump administration will be able to name a successor upon assuming the presidency.
Furthermore, a Reuters report earlier this week cited two FCC sources that said the Commission is not expected to vote on the set-top box proposal going forward.
Meanwhile, consumer advocacy groups like Public Knowledge are already urging Trump to follow Wheeler’s lead on the issue.
Wheeler said on Thursday that he is “committed to a smooth transition,” but that he has not picked a departure date yet. If he were to remain with the FCC beyond January, it would likely be as a Commissioner – something that’s at least possible, after a Washington Post report said that leading Senate Democrats want to block the reconfirmation of Rosenworcel, whose term ends at the end of the year.
That could leave Trump’s FCC in a state of deadlock for a few months, but eventually it will have a 3-2 Republican majority. Though Trump has said little about the set-top box issue specifically, this means it’s very likely to oppose federal oversight where it can.
To that presumed end, Trump has appointed Jeffrey Eisenach, an economist and former telecoms industry consultant, as the head of his transition team’s telecoms- and FCC-related policy. Eisenach has been a general proponent of light-touch telecoms regulation in the past, defending controversial practices like zero-rating, and opposing Wheeler’s landmark decision to treat the internet as a public utility, which is the basis of the current net neutrality rules that force internet service providers like Comcast and AT&T to treat all content equally.
Speaking about Trump’s potential telecoms approach on C-SPAN last month, Eisenach said, “I think, in general, taking his broader views on regulation into account, you would expect him to appoint to the FCC one who would be inclined to take a less regulatory position.”
- Thomson Reuters
Aiding Eisenach is Mark Jamison, the director of the Public Utility Research Center at the University of Florida and a former manager of regulatory policy (i.e., lobbyist) at Sprint. His views on net neutrality align closely with Eisenach’s.
He’s been a particularly fierce opponent of Wheeler’s set-top box plan, too. In a September op-ed at TechPolicyDaily, Jamison said that “Mr. Wheeler’s proposal would not spur more innovation nor lower prices for customers.” He argues that the market should decide the value of set-top boxes – a point critics say is difficult to do today, given the relative lack of local choice in the cable space, and the fact that a good chunk of content isn’t easily available without subscribing to cable, and thus renting a pricey cable box, first.
In any case, it all strongly suggests that the federal government won’t be telling cable companies to change their tack going forward. If the cable box does go away, don’t expect the FCC to be the one pushing it out the door.