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Analyst Says Proposed FCC Set-Top Box Reform '95% Dead'

16 Nov, 2016 By: Erik Gruenwedel

A controversial proposal by FCC chairman Tom Wheeler that would mandate pay-TV operators move from the conventional set-top box to app-based distribution isn’t likely to see the light of day, according to an analyst.

Wheeler earlier this year in his “Ditch the Box” proposal sought to circumvent with free apps what he called a $20 billion windfall to multichannel video program distributors, whereby the average American spends $231 a year renting a set-top box to access pay-TV.

“While consumers will still pay their monthly subscription fees for the service, they will be able to download an app to devices they purchase or already own to access pay-TV service, so they are no longer forced to rent boxes from their provider. Of course, a consumer may choose to keep their set-top box and enjoy their pay-TV programming as they do today,” Wheeler wrote in the proposal.

The FCC in September pulled a vote on the proposal following industry pushback. Now with the election of Donald Trump, Matthew Schettenhelm, analyst with Bloomberg Intelligence, believes the proposal is doomed under the remaining months of the Obama Administration.

“I would say it’s 95% dead," Schettenhelm told The Philadelphia Inquirer. "It's a very long road to get this done.”

In a separate letter to the President-elect, Gene Kimmelman, CEO of Public Knowledge, a consumer advocacy group, called on Trump to continue Wheeler’s quest to supplant set-top boxes with apps and consumer-owned streaming media devices.

The group contends the FCC remains under a mandate to bring innovation to the set-top box, including third-party competition.
“The prospect of unlocking the box has excited people around the country, winning the support of editorial boards nationwide and resulting in hundreds of thousands of demands calling for the FCC to take action,” Kimmelman wrote. “It's clear that Americans are eager to stop paying rental fees on these dumb boxes.”

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