The rightful end of an outdated tech mandate

During an era of Congressional gridlock and political partisanship that often sidelines productive legislative work, it is increasingly rare that Republicans and Democrats can join together on important measures that eliminate outdated regulations and save consumers real dollars.  That is exactly what happened, however, with the bipartisan STELAR (Satellite Television Extension and Localism Reauthorization) Act of 2014, which included an important provision from our bill, H.R. 3196, that sunsets an outdated FCC equipment rule on December 4.

The outdated rule is called the integration ban and it relates to the set-top boxes consumers use to access their cable service. The integration ban is a 2007 FCC rule that prohibits cable operators from combining, or integrating, security and descrambling features into their leased set-top boxes.  Instead, this security function must be performed by an external CableCARD, a device about the size of a credit card that is inserted into the box.  The motivation for the rule was to require cable operators to use CableCARDs for security in the boxes they lease to their customers to help spur a market for devices in the retail market – like TiVo’s – that use a CableCARD to access cable services.

{mosads}While its intention at the time may have been good, the integration ban has been a flop, even in the FCC’s judgment. Most consumers chose to continue leasing set-top boxes from cable operators which they can return or upgrade when they wish. Only cable operators – not satellite, telco or Internet video providers who all sell video devices – were required to remove their security functions from set-top boxes and then reinstall them through another device.

In addition, by requiring that cable operators put CableCARDs in leased set-top boxes, consumers who leased those boxes have been on the hook for more than $1 billion in unnecessary costs since 2007 and have paid for an extra 500 million kilowatt hours of energy every year.  That’s enough electricity to power a city of 50,000 people every year. And that is exactly why a united Congress eliminated the integration ban as part of STELAR.

To be clear, ending the integration ban does not abolish the requirement that cable companies support retail CableCARD-enabled devices. Even TiVo, the maker of the most popular CableCARD device, agrees, saying that it “expect[s] CableCARDs to be supplied and supported by cable operators for many years after cable operators are no longer required to use them in their own set top boxes.”  The only change is that cable companies will no longer be compelled to use them in the leased boxes that they provide to their customers, eliminating the unnecessary cost and energy usage compelled by this rule.

Repeal of the integration ban also is occurring against a backdrop of phenomenal growth in the video device marketplace. There has not been an area of the economy where wehave seen more investment, innovation and transformation in the past few years.  When you list the names of companies that now sell retail video devices – including Apple, Amazon, Google and Roku – it is clear that America’s technology giants have embraced this market. 

Traditional pay TV companies and networks as well as online video giants like Netflix are enabling consumers to access programming via apps that are turning every connected device into a TV screen.  From streaming devices to smartphones, computers, tablets, game consoles or smart TVs, we now have an abundance of video screens at our disposal.  Apple CEO Tim Cook recently declared that “The Future of TV is Apps” and the video marketplace is bearing that out.

How does all of this tie back to why Congress sunset the integration ban?  It demonstrates that the marketplace has evolved well beyond the best intentions of federal regulators.  There simply is not a need for outdated rules like the integration ban that penalizes some competitors and millions of American consumers.   

While December 4 will likely come and go without fanfare, we should all take a moment to celebrate how a bipartisan Congress can work together to make sensible changes that benefit everyone. 

Latta has represented Ohio’s 5th Congressional District since 2007. He sits on the Energy and Commerce Committee. Green has represented Texas’ 29^th Congressional District since 1993. He sits on the Energy and Commerce Committee