But some Republican members of a U.S. House of Representatives committee and DirecTV questioned a need for FCC action to promote competition to set-top boxes generally provided by video programming providers. There's already "robust" competition among video programming providers, with telecom carriers and satellite-based providers competing with traditional cable TV providers, Representative Cliff Stearns, a Florida Republican, said during a hearing of the communications subcommittee of the House Energy and Commerce Committee.
Despite an FCC proposal to set standards for a video gateway device that would allow multiple devices in a home to connect to a video programming service, many new TV sets already have broadband connectivity built in, Stearns said. Some analysts project that more than 70 million Internet-enabled TV sets will ship in 2012, he said.
"Being able to access the Internet from a television is certainly an appealing idea to many consumers," Stearns said. "As such, the market already seems to be delivering this service without any government assistance."
The FCC, in a national broadband plan released in March, set a goal of requiring all video programming providers to install gateway devices along with set-top boxes by the end of 2012. Two manufacturers control 90 percent of the set-top box market in the U.S., and efforts from the '90s to encourage set-top competition have largely failed, the plan said.
The FCC acted on the set-top recommendations quickly by moving forward on two set-top box items during its April 21 meeting. The commission voted to launch a notice of inquiry on how to encourage set-top box competition, including creating video gateway device standards. Commissioners also voted to launch a further notice of proposed rulemaking to fix problems with CableCard devices, which allow video subscribers to connect third-party devices such as TiVo boxes to video services.
Satellite video providers and some telecom-based video providers don't support CableCard devices, and installation of the devices can often take hours or multiple visits from cable technicians, said Representative Rick Boucher, a Virginia Democrat. A new generation of smart set-top boxes, that consumers could buy and use with multiple video providers, could show more U.S. consumers the benefit of broadband, Boucher and other Democrats on the subcommittee said.
When Congress passed the Telecommunications Act of 1996, it recognized that set-top boxes would someday enable two-way communications, added Harold Feld, legal director of Public Knowledge, a digital rights group.
"In the national broadband plan, the FCC determined that promoting competition in video devices would spur the adoption and use of broadband by making it easy for innovators to break down the wall between television and the Internet," Feld said. "Fulfilling the mandate of Congress to promote competition in video devices will help America achieve the goal of universal broadband, which has become the general-purpose communications technology of our time."
Kyle McSlarrow, president and CEO of trade group the National Cable and Telecommunications Association, pledged to work with the FCC on its set-top box competition goals. Representatives of TiVo and Sony Electronics also said they supported the FCC's initiatives.
But requiring satellite providers such as DirecTV to accept third-party set-top boxes could cause problems, said Eric Shanks, executive vice president for entertainment at DirecTV. Because of the way satellite TV providers deliver their service, the add-on features, such as weather forecasts, sports scores and 3D TV, reside on the provider's set-top boxes, Shanks said.
Cable's two-way architecture would allow cable providers to more easily accept third-party devices, he added. The FCC proposals could hurt satellite TV providers' ability to compete with cable, he said.
Third-party devices would also create a customer-service nightmare for satellite TV providers, with the providers expected to fix problems with the set-top boxes, he added.
"Allowing third parties to strip out our services ... and develop their own user interface will diminish the industry-leading customer service they expect from DirecTV," he said. "We receive 140 million customer calls a year, including a great number regarding the set-top box. Who will take these calls, and more importantly, who will solve the customers' problems"
Representative John Shimkus, an Illinois Republican, questioned why the FCC needed to create new rules to encourage set-top box competition. Congress and the FCC should let the free market work, he said.
Instead, the FCC should focus on deploying broadband to areas that don't have it, he added.
"It is the consumers that drive demand, and business then fills demand," he said. "Every time we intervene and try to push a service on the public through government, we fail."