Scott Wallsten: “FCC’s set-top box proposal won’t lower cable bills” (The Hill)

A common consumer complaint is that cable bills are hard to decipher. It turns out that even Federal Communications Commission (FCC) Chairman Tom Wheeler is flummoxed by all those line items, at least as evidenced by his recent comments on set-top boxes. Wheeler believes consumers would save money if it becomes easier for any company to offer devices that substitute for the set-top box households typically rent from their cable provider. Thus, the FCC appears poised to reintroduce a 2010 proposal intended to “open up” the set-top box market. The chairman is misguided. Decoupling the set-top box from the video service may remove a charge from Americans’ cable bills, but is unlikely to change consumers’ total bills, on average. And while the average bill may stay constant, the price for service is likely to increase for households who lease a small number of boxes and decrease for households with larger numbers of boxes. That’s probably not the outcome the FCC wants. Eliminating the set-top box is unlikely to change the average price because consumers pay for video service, and the set-top box is a part of that bundle, regardless of how it is marketed and billed. Just because cable companies charge separately for the set-top box does not necessarily mean removing the boxes would reduce the total price consumers pay for video service. Like any business, video providers charge what they can. If they can’t charge for boxes they will probably increase the fee for service.