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FCC revises controversial set-top box proposal

In a compromise, the FCC will require cable operators and other pay-TV providers to offer apps that provide access to TV content.

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FCC Chairman Tom Wheeler has revised a controversial proposal to free consumers from renting set-top boxes from cable companies and other pay-TV providers.

Screenshot by CNET

US regulators have revised a proposal that's supposed to free consumers from set-top box rental fees after months of criticism from the cable industry.

On Thursday, Federal Communications Commission Chairman Tom Wheeler suggested new rules that would allow consumers to ditch their traditional cable boxes and instead access their pay-TV service through an app on devices like a Roku, Apple TV, Xbox One, smart TVs, or iOS and Android phones or tablets. The proposal also requires that cable operators and other companies offering pay-TV service integrate search for their programing with content found through apps, like Hulu and Netflix, so that consumers can search across apps for TV shows and movies.

"If adopted, these consumer-first rules would pave the way for a competitive marketplace for new devices that enhance the TV-watching experience," Wheeler said in a blog post. "Bottom line: consumers will no longer have to rent a set-top box just to watch the programming they already pay for."

The new plan is a compromise that takes into account the industry's criticisms of an earlier proposal. The previous plan required pay-TV providers to adopt a new technology standard that would have allowed third-party device makers access to TV content streams.

The FCC's original "Unlock the Box" proposal, introduced in February, had been pitched as a way to give consumers cheaper and more innovative alternatives to the set-top boxes available from their cable companies. Today, 99 percent of pay-TV subscribers rent set-top boxes and spend an average of $231 a year to lease these devices, according to a congressional study.

But critics, such as the cable companies and Roku, a maker of streaming-video devices, argued an FCC mandate on set-top boxes could add costs, threaten consumer privacy and hurt smaller content producers. They also argued the rules were unnecessary since the market was moving away from a box in favor of apps that run on mobile devices, gaming consoles and TVs.

Lawmakers, such as Sen. Ed Markey (D-Mass.) who helped write the 1996 Telecommunications Act and is a member of the Commerce, Science and Transportation Committee, applauded the FCC's efforts.

"Consumers have been waiting for twenty years for a truly competitive and robust set-top box marketplace that puts an end to exorbitant cable box rental fees, and the FCC's order represents the dawn of a new era," he said in a statement. "The FCC is using authority clearly provided by Congress to better allow consumers to choose which device to watch programming for which they have already paid."

While some cable companies, such as Comcast, have already developed apps that allow customers to access their TV service on devices other than set-top boxes, critics say the FCC's new proposal is still flawed because it gives the FCC oversight over how pay-TV providers and content owners strike programming deals. In a blog post Thursday, The Future of TV Coalition, a group created by the pay-TV industry to fight these new rules, said that like the FCC's original mandate, the new rules would violate copyright law and "would wrongly and unlawfully empower the FCC to dictate content licensing terms."

The FCC says it will not interfere with licensing deals. Instead, it says oversight will ensure there is a process in place for device makers to get pay-TV apps.

The FCC is scheduled to vote on the proposal at its open meeting on September 29.