Will new cable boxes change anything?

Cable TV box

TEXT OF STORY

KAI RYSSDAL: It might have slipped by you in the run-up to the holiday yesterday, but reaching the halfway mark for 2007 means a change for new cable subscribers.

Beginning July 1st, cable companies were required to give their customers a new kind of set-top box. They'll come with a little card that will let customers go out and buy or lease their own box. What happens then depends on who you ask.

Our Washington bureau chief John Dimsdale reports.


John Dimsdale: For Jason Oxman at the Consumer Electronics Association July 1st was a big day.

Jason Oxman: It is as momentous for cable consumers as the day the FCC ordered AT&T to permit consumers to purchase telephone equipment from someone other than the telephone company.

Right now, most cable TV subscribers rent their set-top box from the cable company. Back in 1996, Congress ordered the FCC to pry open the cable industry's lock on home equipment. After several delays, the FCC now requires cable companies to provide set-top cards so people can buy their own cable boxes.

But Brian Dietz at the National Cable Television Association says those cards have already been available for several years.

Brian DIETZ: All this mandate will do is drive up the cost of the set-top boxes that cable customers lease from their cable companies. It won't result in set-top boxes being available at retail outlets.

Cable companies warn the mandate will increase the rental cost of set-top boxes by $2 or $3 a month. But Chris Murray at Consumers Union says the cable industry is just trying to maintain its monopoly.

Chris MURRAY: The idea that this is of no benefit to consumers is a laughable proposition from the cable industry who wants people to just stay within their walled garden.

All sides agree, technology is coming within a few years that will bypass the set-top box entirely and allow cable companies to download subscription information directly to the TV set.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...