Obama supports disrupting set-top box market

Apr 15, 2016, 3:37 PM EDT
Unboxing Apple TV. (Source: Simon Yeo/flickr)
Unboxing Apple TV. (Source: Simon Yeo/flickr)

As if the Obama administration could infuriate the cable industry any further, President Obama announced his support on Friday for a proposal to open the market for cable set-top boxes. His call for increasing competition in the set-top box industry echoes what many consumers have complained about for years: that the cable box industry is rigged against the consumer.

Obama’s comments on the Federal Communications Commission’s proposal to loosen the chokehold corporate cable giants have on the set-top box industry is an unusual personal endorsement. As the New York Times points out, it is uncommon for Obama to personally weigh in on a proposal like this at the F.C.C. It signals his earnestness to disrupt the eon-old corporate structure that has ruled the cable industry in the U.S. since cable TV was invented. Obama said in an interview with Yahoo Finance: 

"The cable or satellite box is just one example of an area where, because it’s been tied to the provider and you rent it, and consumers spend billions of dollars on it every single year, there hasn’t been much innovation."

Obama signed an executive order on Friday calling for administrative action to promote competition and better protect consumers, although specific examples of the new rules or action by government agencies were not offered by the White House.

The only win the cable industry has had during Obama’s tenure was a Supreme Court shut-down of Aereo, the startup that allowed users to bypass cable companies to watch cable programs, but that lost its legality in late 2014.

Of course, the cable industry is up in arms over Obama’s open support of the set-top box shake up. The National Cable and Telecommunications Association (NCTA) CEO Michael Powell said in a statement: "We are disappointed that White House political advisers are choosing to inject politics and inflammatory rhetoric into a regulatory proceeding by what is supposed to be an independent agency."

The NCTA has urged the F.C.C. to take a "measured and balanced" approach to injecting competition into the set-top box market. Companies like Google and Amazon have been disrupting that market for years already. What the F.C.C. has in store remains to be seen.

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