FCC Delays Final Vote On Pay TV Box Reform

(Reuters) -- The U.S. Federal Communications Commission said on Thursday it would delay a final vote on a landmark reform of the $20 billion television set-top box market -- a blow to advocates seeking to cut bills for tens of millions of subscribers.

The three Democrats on the commission said in a joint statement that they backed the idea of allowing users to drop the boxes that route cable and broadcasting to consumers' televisions but are "working to resolve the remaining technical and legal issues." The final vote had been set for Thursday.

FCC Chairman Tom Wheeler has touted his plan -- backed by President Barack Obama -- to allow tens of millions of U.S. pay TV subscribers to ditch costly set-top boxes and access video programming online. But his position has faced fierce criticism from cable companies, programmers and many in Congress.

Wheeler rejected the suggestion that the delay was a major setback to complete his aggressive agenda before the end of year, which also includes finalizing new broadband privacy regulations and reforming the $40 billion a year business data service market. "We just ran out of time," he told reporters, declining to discuss specific hurdles. "We intend to get something done."

The plan, first proposed in January, is aimed at ending the cable industry's long domination of the $20-billion-a-year set-top box market and lowering prices for consumers. Nearly all pay-TV subscribers lease set-top boxes from their cable, satellite or telecommunications providers at an average annual cost of $231.

FCC Commissioner Jessica Rosenworcel, the key swing vote, disclosed at a U.S. Senate hearing earlier this month that she had "problems" with Wheeler's proposal. It included a new licensing body to ensure that pay-TV companies do not make anti-competitive agreements.

In recent months, the plan drew fierce opposition from television and content providers, including AT&T Inc, Comcast Corp and Twenty-First Century Fox Inc.

Comcast and AT&T on Thursday both urged the FCC to make the new proposal public. AT&T said in a statement "no FCC proceeding in recent years has drawn more unified opposition and bipartisan expressions of concern."

The new rules would require companies covering 95 percent of U.S. TV subscribers to comply by September 2018. Wheeler in January initially proposed open standards for set-top boxes that would allow tech companies to re-tool the delivery of video content. The proposal grants device makers the ability to integrate cable company apps.

Set-top box rental fees have jumped 185 percent since 1994, while the cost of televisions, computers and mobile phones has dropped 90 percent, the FCC has estimated.

Senator Edward Markey criticized the delay as "an unequivocal loss for the tens of millions of Americans across the country who are forced to spend their hard-earned money on overpriced set-top box leases."

Cable companies have expressed concerns that rivals like Alphabet Inc or Apple Inc could create devices or apps and insert their own content or advertising in cable content.