Changes for Cable Television Companies
Posted: February 26, 2016
The Federal Communications Commission (FCC) last week voted to approve a change in the way cable television companies do business. Instead of having to rent a cable box, customers will have the ability to purchase a set-top box that could combine cable or satellite channels with content from providers such as Netflix, Amazon, Hulu and others.
I wrote a column early last year about my inability to purchase a cable box for my office. I was told at the time that I could purchase a CableCard. After further inquiring about what that meant, I was told that the best way to do business with Charter Cable was to just rent the box. I ended up discontinuing my service with Charter in my downtown office.
A Senate study found that 99 percent of cable television customers rent their boxes, which means customers spend an average of about $231 per year. That generates more than $19 billion in revenue for the cable companies. Box rental costs have gone up 185 percent since the mid-1990s.
It's no wonder then that the pay television industry has been lobbying furiously to stop the cable box proposal.
Those opposed to the change in the way the cable television industry does business claim that companies like Google will be able to peer into our lives and habits. That could be happening right now, for all we know, so I don't put much stock into that claim.
Others opposed to the FCC measure claim that Google can repackage programming that we pay for from television providers without paying any money to the television providers. Again, I think those opposed to this sensible idea are reaching for anything that will scare cable television customers.
I like that FCC Chairman Tom Wheeler put out his proposal last week. It has been a long time coming. Wheeler's proposal holds the potential to do for cable television customers what the FCC did for telephone users beginning in 1968: Get rid of anti-competitive business practices that stifle innovation and force most consumers to rent instead of buy.
By the way, through July of last year, customers of the nine largest cable television providers had acquired just 617,000 CableCards versus the 53 million rental boxes. Go figure.