With the FCC prepping to vote on new rules that aim to break up cable companies’ monopolies on set-top boxes, the pay-TV industry is fighting back with an astroturfing campaign that tries to make the case that having more choices in set-top boxes will somehow harm diversity in TV programming.
FCC Chair Tom Wheeler proposed last month that cable companies — who earn about $20 billion a year from monthly set-top box rental fees — should be required to allow other manufacturers to make devices that work on their networks. The idea is that consumers will have more choices, hopefully encouraging cable companies to reduce their fees and/or improve their boxes so that customers will be willing to continuing paying top-dollar for them.
The industry has already had its official say, like Comcast’s assertion — flying in the face of common sense and history — that having more choices will slow innovation in set-top boxes.
This Sounds Familiar
Now the industry is pumping many of these same talking points through a recently created group called Future Of TV Coalition, whose membership combines the pay-TV companies, existing set-top box and modem manufacturers (Arris, Cisco), and a variety of advocacy and community organizations like the Minority Business RoundTable, National Black Caucus of State Legislators, and the Hispanic Technology & Telecommunications Partnership — itself a coalition of other organizations, and a continued vocal opponent of net neutrality.
The Future of TV Coalition is led by Nomi Bergman, president of Bright House Networks, and Alfred Liggins, CEO of TV One — a network that had, until only a few months ago, been co-owned by Comcast.
The “Poaching” Myth
For the sake of discussion, let’s put the coalition’s corporate connections and histories to the side for the moment and just look at what it actually has to say on the set-top box proposal, also referred to as “AllVid.”
“AllVid is a technology mandate that would allow companies to poach programming from TV providers and repackage it into their own products and services without negotiating or paying for the rights,” reads one of the talking points from the coalition.
Comcast tried to argue this same point a couple weeks back, and it’s just as nonsensical as today as it was then.
A set-top box is nothing but a device that receives, decodes, and sometimes stores the TV feed from the pay-TV provider. Cable customers are still paying the same subscription every month to their cable company. The programmers are still receiving their agreed-upon carriage fees from the cable company. The networks and the cable company are still earning money from advertising.
If anything, broadcasters should be hoping for competition in the set-top box market. If subscribers can spend slim down this costly part of their monthly cable bills, they might be less likely to cut the cord.
We’ll Raise Your Bills!
The talking point continues, without any explanation, to claim that set-top box competition could drive up consumer bills.
First off, cable companies will use any excuse to raise bills. As demonstrated in our recent breakdown of a typical Comcast bill, the company deploys multiple surcharges — like the “Broadcast TV Fee,” the “Regional Sports Fee,” and the “Regulatory Recovery Fee” — to squeeze the customer for extra money without raising the advertised rate.
In our example for that story, just those three fees added more than eight dollars each month to what was supposed to be a $99/month cable and Internet bill. Over the course of a year, that’s an additional $97.56 in Comcast’s coffers. When you figure in Comcast’s base of more than 20 million customers, you’re looking at a multibillion-dollar revenue stream from fees the company is not in any way obliged to collect.
It’s baffling that the broadcasters and the minority community groups are begging the FCC to not do something that might raise rates, when they should be asking why the cable companies are always threatening to do so.
Less Diverse Programming?
The coalition contends that “Small, independent, and diverse networks are particularly vulnerable to AllVid because they lack the scale and resources to absorb the revenue losses, channel dislocation, and other harms that AllVid would cause.”
Again, this simply doesn’t mesh with the reality of the situation. All that the FCC is considering is whether or not to allow other manufacturers to make competing set-top boxes. As proposed by Wheeler, manufacturers would not be able to reshuffle channels at whim, so this “channel dislocation” complaint is a non-starter with no basis in fact.
And yet TV One’s Liggins still contends that new manufacturers would engage in “digital ‘redlining” that could “bury diversity programming in the farthest reaches of the program guide.”
Except that’s simply not true. If Google or TiVo or Jimmy Joe Johnson’s Set-Top Boxeria Inc. decided to make a box for Comcast or DirecTV or Sal’s Hoagies and Cable TV, they could not in any way interfere with the content provided to them by the pay-TV companies.
And what “revenue losses”? As mentioned above, programmers would still get the same fees and ad revenue they are seeing now. Another smoke screen rising up from the astroturf.
The Government-Mandated Box!
The following statement contains what is perhaps our favorite bit of pablum from the coalition’s talking points:
“Current AllVid proposals would actually require a new, additional government-mandated ‘AllVid’ device in customers’ homes – resulting in more in-home devices, not fewer.”
Once again, this is absolutely not at all, in any possible world, true.
It is your cable company that requires that you have a set-top box, because it’s the easiest way to (A) prevent piracy of its signals, and (B) reap billions in monthly fees.
The coalition loves to mention all the “TV Everywhere” apps offered by cable companies that let you watch programming without a box on your phone, computer, or tablet. But guess what — you still need to have that cable company-provided box (or cable card) in your home just to be a customer.
I propose the following challenge to any of the coalition members: See what happens when you try to take your cable box back to Comcast/TWC/DirecTV/Sal’s and say “I’m not canceling service; I just don’t need to pay $10/month for this box because I only watch cable on my phone now.”
The Fiction Is Now Viral
The anti-consumer untruths being disseminated by the coalition would be merely risible if it was just another industry-backed campaign shouting into the wind. But these talking points are now filtering out into seemingly more legitimate forums.
This piece repeats Liggins’ fiction about reshuffling and redlining, alleging that programming for racial and ethnic minority communities “could be dropped or buried at the far end of the digital dial.”
Dr. E. Faye Williams, Esq., CEO of the National Congress of Black Women, echoes the same inaccurate sentiment about redlining in an AL.com op-ed.
Williams also makes baseless claims about piracy and privacy when she says that “Nothing would stop AllVid companies from selling viewers’ individualized television viewing habits to advertisers (just as they do your internet habits today), airing pirated television shows and movies alongside the original, or placing adult entertainment or violent programming next to children’s shows.”
First off, does she think that the existing broadcasters and cable networks are not tracking users’ online behavior, or that these companies aren’t also buying tracking data? It’s not that this isn’t an entirely valid concern, but Williams provides no evidence to support her statement.
Second, why on Earth would these set-top box manufacturers want to air pirated TV shows and movies? If Williams means that users of these boxes would be able to access pirated videos on the same device as they do their cable TV programming, she’s unintentionally undercutting the coalition’s argument in favor of app-based TV access.
After all, you can watch your Comcast feed on your phone or tablet, then switch right over to another app, or browse to a website, where pirated content is readily available. Let’s not forget that a number of set-top boxes now have apps that let you watch videos from YouTube and other services that are brimming with illegally shared content.
As for Williams’ dangling sword of “placing adult entertainment or violent programming next to children’s shows,” we’ve already covered the fact — repeatedly — that set-top box makers would have no ability to rearrange channels. And if she wants to see flesh, blood, and kids’ cartoons sharing the same neighborhood of the channel guide, she need look no further than HBO’s bundle of premium channels.
I’ve said before that there is no guarantee that set-top box competition would result in lower prices for consumers. We’d need enough manufacturers to step up to the plate, the pay-TV companies to not drag their feet in complying, and for TV viewers to give a darn. That’s a lot of things that have to happen in order to make this a success; it doesn’t need the additional roadblock of overcoming industry-backed falsehoods.