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Federal regulators Thursday moved forward with a proposal to make it easier for consumers to switch from set-top boxes leased monthly from pay-TV companies to new devices sold at retail by consumer electronics or Internet companies. Comcast ( CMCSA ), AT&T ( T ) and other pay-TV companies quickly criticized the Federal Communications Commission’s vote to begin making the new rules, calling it unneeded because of advances in Internet and app-based technology. Alphabet ’s ( GOOGL ) Google and Tivo ( TIVO ) are among companies that could gain from the FCC’s proposal. Roku, a maker of video streaming devices, has sided with cable TV industry partners amid the lobbying battle. FCC Chairman Tom Wheeler, an Obama administration appointee, said Thursday in a hearing that rising set-top box leasing fees have hurt consumers. The FCC, with a Democratic majority, voted 3-to-2 to begin a formal rule-making process. The agency aims to develop technical standards so that new hardware suppliers can provide access to programming sold by pay-TV companies. The FCC says that its set-top box initiative is not a threat to copyright protections, although pay-TV providers pay content companies for programming. Republican FCC member Michael O’Rielly said that it would take three years for new products to appear, because pay-TV companies would have two years to comply with any new technical standards for sharing programming. He added that technology innovation would render the FCC’s rules “obsolete” in the meantime. Comcast, in a blog post, said: “A new government technology mandate makes little sense when the apps-based marketplace solution … is driving additional retail availability of third-party devices without any of the privacy, diversity, intellectual property, legal authority or other substantial concerns raised by the FCC chairman’s mandate.” Comcast has stepped up deployment of Internet-ready X1 set-top boxes. The FCC proposal has pressured shares of Arris International ( ARRS ), a supplier of set-top boxes to the cable industry; they were down 13% in afternoon trading on the stock market today , following the vote, but pay-TV stocks saw no big moves. AT&T, in a statement, said: “While consumers are embracing an apps-based approach that offers a variety of content on more than 450 devices, the FCC has chosen to go down a path that threatens the very competition that has led to a vibrant marketplace. As this proceeding continues, we hope these concerns are given the weight they deserve and the commission allows consumers and not Google to continue to drive the market.” By selling set-top box type devices, Google could target the TV advertising market, raising privacy issues, according to critics. Wheeler’s proposal could also impact Charter Communications ( CHTR ), Time Warner Cable ( TWC ) and Verizon Communications ( VZ ), as well as satellite TV broadcasters DirecTV and Dish Network ( DISH ). Scalper1 News
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