For decades, the cable industry has had a tyrannical stranglehold on customers, minting millions from set-top-box rentals. The president was wisely drafting on a Federal Communications Commission proposal that would loosen the cable/telco/satellite industry grip on those pesky boxes and open the market wide to companies like Apple, Roku and Google. The president’s chief economic advisor, Jason Furman, rightly compared it to the bad old days of the telco monopoly, when everybody was stuck with rotary phones, even though more efficient devices were available.
Right on cue, the National Cable & Telecommunications Association lashed back at the president, saying he was playing favorites to his Silicon Valley pals that have been lobbying the FCC to let them compete with behemoths such as Comcast, AT&T and Verizon to be the set-top box of choice.
Predictably, Republicans in Congress claimed Obama was overstepping his bounds, in an imperial White House gambit to bully the FCC. Michael Powell, the commission’s former chairman under George W. Bush, and now head of the National Cable & Telecommunications Association—where he enjoys a salary about five times the president’s—charged that the White House was choosing to “inject politics and inflammatory rhetoric into a regulatory proceeding by what is supposed to be an independent agency.”
Certainly the White House is playing politics here—and a smart game of political gamesmanship at that. And oh, the irony to hear such alleged proponents of free markets in Congress and elsewhere, rail against removing regulations that would open up the set-top-box market.
It’s a smart move by the Obama Administration to target set-top-box liberation as the model on how to address myriad industries where domination by a few major players means higher prices for consumers while putting the brakes on innovation.
All of which begs a question: Which companies have a higher consumer satisfaction rating and are generally considered more trustworthy? Apple, Amazon and Google, or those on the other side of the debate, such as Comcast, Verizon and AT&T? Obviously, Obama knows the answer, as I’m sure everyone reading this does. Oh,wait: The cable companies will answer as soon as the next representative is free.
One can understand the consternation of the cable and telco industries. They, as well as the Motion Picture Association of America, among others, argue that the FCC proposal supported by the Obama Administration might undermine copyright protections, hurt minority programmers, reduce consumer privacy and impose new costs to reengineer networks.
Certainly, the proposed changes would present challenges, but they all seem surmountable. As we’ve seen in the exploding TV Everywhere universe, with the success of Netflix, YouTube, Hulu and others, the more open things get, the more diverse programming becomes—not less so.
Those braying against Obama and the FCC have the technological wherewithal to address what are, in my view, overstated concerns about privacy, copyright and piracy. Yes, liberating the set-top box will tighten the spigot on a reliable cash cow for the cable industry, but it’s smarter to try to discover the opportunities afforded by that coming reality than to fight it. Maybe cable and the telcos could win cord-cutters back by thinking outside the box.
This is the President who opposed gay marriage in 2008. And supported it in 2012. He's good at paying attention to which way the wind is blowing.
"If you never change your mind, why have one?" - Edward DeBono