The FCC was going to open up the cable box to promote competition. But that’s all changed under Trump.
NEARLY A DECADE ago, Comcast promised liberation from the tyranny of the cable box. But today its control seems here to stay—as does big cable’s control over how you consume the programming you pay for.
This week, the Federal Communications Commission met for the first time under its new chairman, Ajit Pai, a Republican. The original agenda for the meeting included consideration of the agency’s latest proposal—advanced under former Democratic chairman Tom Wheeler—to force cable companies to make their services a bit more open. That item disappeared from the agenda—and with it the likelihood that much of anything will change in the world of cable, at least as far as government regulation is concerned.
If Comcast controls the cable box, it can avoid becoming just another app.
At the dawn of the Obama administration, the future of cable looked a lot different, and not because government regulators were going to force the industry to change. Comcast announced a tech standard called Tru2Way at the 2008 Consumer Electronics Show that would have made it possible for any company to build a cable box that tapped into Comcast’s television service. The idea was that instead of renting a cable box from Comcast, you could pick from a wide range of different devices. You’d still need to pay for your cable subscription, but you could use your Apple TV or Roku instead of renting a cable box, or maybe just plug your TV right into the wall without worrying about any box at all.
“The age of the closed, proprietary cable box is behind us,” Comcast CEO Brian Roberts said at the event.
Had the idea ever taken off, cable box rental fees would have disappeared, and third parties could have competed to create the best cable-viewing experience. Don’t like your pay TV provider’s labyrinth of menus? Maybe the Apple TV’s interface would be more to your liking. Or perhaps you would have been able to use gadgets like the Amazon Echo or Google Home.
But Tru2Way never went anywhere. Neither did the bigger idea of opening up cable until last year, when the FCC proposed rules that would have required pay TV companies to open their video streams to third parties through an open standard. The proposal was not unlike what Comcast pledged to do back in 2008. It was also a long time coming: Congress first asked the FCC to promote competition in the cable equipment business back in 1996, and would have replaced the outdated and cumbersome CableCard standard.
The cable industry pushed back, arguing that the proposed system was technically unfeasible and would have enabled people to pirate content more easily, as well as allow those third parties companies to insert their own ads into shows. The FCC listened and came back with a watered-down proposal that would have required companies to simply provide apps for all major platforms—think Amazon Video on your Comcast box—and make their content searchable. The industry balked at this idea as well. Now it looks like the whole endeavor has been postponed, more than two decades after congress first asked FCC to look into the issue.
Still, the question remains: Why didn’t the industry make these changes voluntarily? After all, the ability to watch what you want where you want on any device you want is the basic promise of internet-powered television in the 21st century.
Keeping the Cord
The most obvious answer is money. According to the FCC, consumers collectively spend around $19.5 billion a year on cable box rental fees. That’s almost pure profit for the industry because customers pay for the cost of the box several times over. But Comcast was apparently happy to part with that revenue a few years ago when it proposed Tru2Way. So what’s changed? Why has Comcast gone from promising to kill the proprietary cable box to prolonging its existence?
The rise of video streaming services is likely key. “If [cable companies] relegate their user experience to just another app on a third-party box like a Roku, they’re on par with all the other forms of entertainment that compete for user attention,” says telecommunications industry analyst Jan Dawson.
Without an open standard, third parties have to work out deals with companies like Charter and Comcast in order to carry their apps. That gives the cable giants quite a bit of control over what you can watch and where. If Comcast doesn’t want to make an app for the Apple TV, then you’re out of luck.
If Comcast doesn’t want to make an app for the Apple TV, then you’re out of luck.
It’s not all bad news for those who want to watch TV somewhere other than their TV sets. Streaming services like Dish’s Sling TV and AT&T’s DirecTV let you watch live programming over the internet on smartphones, tablets, and computers. And this week Comcast launched a beta version of an app that lets you watch live TV on Roku devices. Charter/Time-Warner Cable have a Roku app as well. But Charter’s Roku app doesn’t include on-demand programming or the ability to record any content. And Comcast’s beta app still requires a cable box, at least until the final version is released.
In the meantime, Comcast is also working on improving the cable box itself to avoid becoming just another app. The company launched its voice-controlled remote in 2015, and last year Bloomberg reported that Comcast was working on a more Alexa-like version that doesn’t require you to carry around the remote like a microphone. Comcast is also in the process of integrated its system with a range of smart home devices, including lights, smart locks, the Nest thermostat, and its own home security service. In other words, Comcast is trying to build a smart home platform with TV at the center. A platform that, as it happens, will also encourage bundling of multiple Comcast services. That aspiration puts it in competition with Amazon, Apple, Google, and many other companies battling to control the living room via voice-activated hardware.
Control over TV is Comcast’s edge in this battle. If its box is the only way you can search and control your cable with your voice and you can control everything else in your home with it too, you have less incentive to use a competing product. And thanks to the FCC’s apparently new direction, Comcast’s cable box is likely to remain the only cable box its customers in Comcast markets will be able to use for the foreseeable future.
The risk for Comcast is that customers might opt to cut the cord entirely and just watch streaming video, especially if competing services are cheaper and provide a better experience. But Comcast has another edge: data limits. If the cost of streaming services plus data overages ends up being more than a cable subscription, Comcast could encourage people to stick to cable. The FCC’s net neutrality rules give the agency the ability to step in if it deems Comcast’s actions as anti-competitive. But those rules are in Republicans’ crosshairs. Under the new administration, Comcast’s control appears assured. You, on the other hand, are stuck with the same remote.