The U.S. Senate Committee on Commerce, Science, and Transportation is holding a hearing tomorrow on legislation to reauthorize the Satellite Television Extension and Localism Act, commonly referred to as STELA. Sitting on the panel of witnesses will be NCTA President and CEO Michael Powell.
We expect the hearing to highlight several important issues, but one in particular, the repeal of the integration ban, is a simple and important step that Congress can take to promote a fair, competitive and modern television marketplace.
For the unfamiliar, the integration ban is the rule that requires cable set-top boxes (and only cable set-top boxes) to use a CableCARD – a device about the size of a credit card that is inserted into your cable device and decrypts the content delivered to your home. We did a CableCARD integration ban explainer a few months ago, which you can check out here.
Since 2007, when the FCC required cable operators to stop using integrated set-top boxes and use CableCARDs instead, the integration ban has imposed over $1 billion in needless costs on cable customers. And on top of the added hardware expense, subscribers collectively foot the bill for roughly 500 million kilowatt hours consumed by CableCARDs each year. Eliminating the integration ban will also allow cable providers to compete on a level playing field with the many other video providers in the marketplace who aren’t subject to the integration ban.
Ending a rule that harms consumers and thwarts innovation in leased set-top boxes will have zero impact on consumers who purchase set tops at retail. The reason for that is because even if the rule is repealed, cable operators will still be obligated under law to provide a separate security solution like the CableCARD that will allow retail devices to work on any of their cable systems. And beyond legal obligations, today’s robustly competitive video marketplace will continue to create strong market incentives for cable operators to support customers that seek to purchase cable service through retail set top solutions.
In the video marketplace, competition is fierce. Content is accessible across multiple platforms operating on almost any device with a screen. Even the FCC agrees, stating in its most recent Video Competition Report, “the CPE marketplace is more dynamic than it has ever been, offering consumers an unprecedented and growing list of choices to access video content.”
To show just how much has changed since the integration ban was first implemented, look at the chart below. Customers are watching cable on an ever-growing list of devices via apps created by a number of providers. The days of the set-top cable box as the sole technology for receiving content is over.
Given these changes and these market trends, it is time for us to recognize at least one rule that has outlived its usefulness and should be repealed.
The hearing will be held at 2:30 pm and will be streamed live on the Senate Commerce Committee website. NCTA President and CEO Michael Powell’s testimony is available here.