Friday, April 22, 2016

Lies, Damn Lies, Statistics and Mistruths in the Set Top Box Debate

            As expected, incumbent cable companies and their select group of new allies, such as Roku, (see http://www.wsj.com/articles/how-the-fccs-set-top-box-rule-hurts-consumers-1461279906) have launched a major disinformation campaign pushing back at the FCC’s initiative to promote set top box competition.  In a nutshell, the rebuttal has offered several remarkably bogus rationales for maintaining the status quo: it’s a Google-generated ploy to access video content without charge just as Google has done with Internet content; regulation is bad; the cable industry has an exemplary record of deploying cutting edge set top boxes; and there’s no problem requiring government intervention in light of the fast paced introduction of new video content access options.

            It comes across as particularly rich to read how Roku now supports the cable industry after years of struggle with it.  Might Roku’s new found support result from the exclusive deal the company cut with Comcast to provide a low cost alternative to monthly set top box rentals?  Isn’t it amazing that despite years of claims that there could never be any single, low cost alternative to the cable industry-supplied set top box, lo and behold the engineers have achieved the undoable!

            Here’s another inconvenient truth: consumers used to access cable without the need for set top boxes; then they couldn’t.  The cable industry dithered for decades on making television sets compatible for both downstream content delivery and upstream navigation commands.  Apparently it was technologically IMPOSSIBLE for true “two way” access via television sets and alternatives to the cable industry rented set top box, until now.

            The cable industry also disputes the revenue levels they have managed to squeeze out from subscribers.  It rejects FCC and other estimates of an average yearly cost of about $230, largely because of voodoo accounting that differentiates what consumers see on their monthly bills.

            The cable industry also congratulates itself on the set top box innovation on display.  Bear in mind that most consumers have used the same box for years.  Ask yourself: how many times has the cable company offered to replace your existing box for new one?  Conveniently Comcast has a new box available, but I’ve had the same box for over 15 years.

            The set top box debate is rife with disinformation and outright lies.  The vilification of Google mystifies me.  If you take the cable industry position, hook, line and sinker, Google amazingly will be able to capture all video content with no payment to copyright holders.  Worse yet, the company will be able to delete and replace advertising.  Google also will rob the cable industry of any incentive to create content and the cable industry will evaporate as Google expands its vacuum cleaner, market capture.

            Newsflash: Google has to comply with copyright, FCC and other requirements.  By law Google cannot meddle with video content it processes.  Google’s market entry has raised the likelihood that consumers will have access to a competitive set top box market as well as the long denied opportunity to access video content from a wire without a box, an option that used to exist before the cable industry came to its business senses.

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