“Must-Pass” Legislation Must Not Harm Customers

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Congress is on a deadline:  Unless it reauthorizes a law that allows satellite TV providers to carry certain broadcast programming by the end of the year, satellite TV viewers might find channels they rely on blacked out.  All that Congress has to do is change the date in an existing statute--but it certainly makes sense to use the opportunity to pass some pro-consumer protections in the video marketplace.

Unfortunately, while the current bill (the Satellite Television Access and Viewer Rights Act, or “STAVRA”) does contain some minor reforms that could help consumers, it also contains a provision--a law repealing the FCC's "integration ban" in two years--that would harm consumers, by making it even harder for them to use devices (such as TiVo DVRs) that use CableCARDs to access video programming.  The "integration ban" requires that cable companies use CableCARD technology internally in their own devices.  This ensures that they have a natural incentive to keep CableCARD working and not change their systems in ways that would break third-party devices.

No member of Congress should hold satellite TV viewers hostage for an opportunity to pass a law that would harm cable customers and limit device choice. It doesn’t make sense to begin with that the satellite industry has to go to Congress every few years to get this provision reauthorized--the laws that allow the broadcast and cable industries to keep functioning don’t have a built-in time limit.  It’s especially wrong to then take advantage of this deadline, which Congress created for itself, to create an artificial crisis where anti-innovation and anti-consumer provisions can slip through, hopefully unnoticed.  If there are members of Congress who think it makes sense to remove this consumer protection they should welcome the opportunity to discuss the issue without the distraction of the pending satellite reauthorization working to limit debate.

A certain amount of horse-trading in bills is normal, and for what it's worth, PK agrees with some of the cable industry on the value of the "Local Choice" proposal (which has been pulled from the current bill). But consumers should never be on the losing end of legislative compromises, and there are no consumer benefits to repealing the integration ban.  Getting rid of the integration ban has been on the cable industry's wishlist for a long time, and cable argues that it drives up costs.  But even if you take these claims about the integration ban’s costs at face value there's no reason to think cable companies would pass along any savings to consumers.  (Plus, any costs to consumers relating to the integration ban are more than offset by equipment rental fees). In the meantime, CableCARD continues to benefit consumers and the cable industry should only be relieved of supporting in when a better (and perhaps cheaper) successor technology is adopted.

That's why Public Knowledge supports an amendment proposed by Senator Markey that would tell the FCC to get rid of the CableCARD integration ban only after it's come up with a superior replacement for CableCARD. The bill shouldn’t move to the floor without this amendment.

Background

For the 99.99% of people who haven’t followed this debate for years it’s worth giving a little context.

One of the big drivers of pay TV bills is equipment fees. People might see one price listed on a cable company's website or advertising, but find out that their real bill can be significantly higher. Most subscribers have to pay to rent even a basic, no-frills set-top box.  And if you want to join the 1990s and get a DVR or even--gasp--an HD-capable DVR you can expect to pay even more. For many subscribers using equipment which should be standard-issue in the year 2014 can add hundreds of dollars to their cable bills each year.

The FCC has been supposed to fix this since Congress passed the 1996 Telecommunications Act, which in part told the FCC to create marketplace conditions that allow for people to buy third-party devices that can access pay TV programming.  If the FCC had succeeded in implementing this statute, today, pay TV subscribers would be able to access their full channel line-up right on their TVs without any extra boxes, as well as on game consoles, third-party set-top boxes like the Roku and Apple TV, and laptops, smartphones, and tablets--without having to wait for the cable company to get around to supporting those devices.

At around the time this law was passed, cable systems were being upgraded in ways that made it so that you needed a converter device. For a while people were able to access their complete channel lineup without needing any extra gear. But as technology changed "cable-ready" was becoming a thing of the past, and Congress wanted to prevent the uncompetitive equipment market we see around us from developing.  The FCC's job was to help develop a standard and associated rules that laid the groundwork for continued consumer choice in video equipment.  Instead it endorsed CableCARD.

CableCARD may have made sense at the time, and there's no need to rehash all the reasons why it didn't fully achieve Congress's goals.  It's still around today and is the only option for people who use third-party devices like TiVos.  But because it is functionally limited and somewhat difficult to get and set up, it primarily appeals to an enthusiast market.  There's nothing wrong with that--technology and media enthusiasts are disproportionately likely to read this blog--but it's a far cry from consumers being able to just plug a wire into their TVs and have it just work.

It's clear that the cable industry would like to eliminate the video device provisions of the 1996 Telecommunications Act entirely.  But this is a tough sell:  people want more choice in how they access their pay TV programming and are outraged at paying to rent inferior equipment from the cable companies. Repealing the integration ban is a way to undermine a consumer protection law without having to come clean about wanting it repealed.

The FCC's task is clear:  it should come up with a successor to CableCARD.  Everyone should be able to use high-quality devices like the TiVo without having to negotiate with their cable companies to get them supported.  PK still thinks the AllVid approach has a lot of merit.  If Congress wants to help consumers, it should push the FCC to implement the video device portions of the 1996 Telecommunications Act more effectively. No one is particularly happy with the status quo, but many consumers rely on CableCARD today and it makes no sense for the FCC's existing implementation of the law to be phased out before a successor is in place.  From the consumer perspective, phasing out rules that ensure CableCARD’s continued support are all cost and no benefit, and if the rules are weakened today it will be that much harder to get the cable industry to come to the table and support a successor technology.

As the Senate considers the integration ban and other video industry measures, I hope it makes sure to put the interests of consumers ahead of the interests of the pay TV industry.

Photo Credit Flickr User: Dan Budiac

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