Obama calls for giving consumers more choice when it comes to cable boxes

by Timothy Gardner

WASHINGTON (Reuters): The Obama administration weighed in on the debate on allowing consumers to switch from expensive cable boxes to cheaper devices on Friday, calling on regulators to set an example for the rest of the government in increasing competition.

Consumers can spend almost $1,000 over four years to rent cable boxes. According to the administration, allowing consumers to choose which devices or applications they can have could mean quick savings.

“Competition is good for consumers,” President Barack Obama said in an interview with Yahoo Finance. “And ultimately it’s good for business. The more competition there is, the more products, services and innovations appear.”

In February, the Federal Communications Commission (FCC) proposed a rule opening up competition in the $20 billion set-top box market.

She set a 60-day comment period for the provision, which could deal a financial blow to cable companies. The administration issued a rare filing regarding the FCC’s independent agency rule.

The rule would allow consumers to use video services from providers such as Google, Apple Inc and Alphabet Inc’s TiVo In, instead of cable, satellite and other providers such as Comcast Corp and Verizon Communications Inc.

It was unclear whether the rule would be implemented before Obama left office in January.

Cable and broadcast operators have fiercely opposed the proposal, saying it could stifle innovation. Under the provision, minority programmers would be harmed, consumers would lose privacy protections and would be burdened with network rebuilding costs, said Michael Powell, head of the National Cable & Telecommunications Association trade group.

The companies also alleged that the White House was putting pressure on the FCC, which they said was inappropriate. “This action not only harms the only companies that are seriously investing in building broadband infrastructure in this country, it also does great harm to the confidence we should have in the impartiality of FCC proceedings,” said Jim Cicconi, senior executive vice president and president at AT&T Inc.

Obama will also sign an executive order on Friday calling on federal agencies and departments to submit a report within 60 days on areas where additional measures could be taken to open the competition.

In a conference call with reporters, Jason Furman, chairman of the Council of Economic Advisers, declined to speculate on what pro-competitive measures the executive order might spur. The administration wants to add to consumer-friendly measures on cell phones, net neutrality and retirement advice.

“This will be an entire government effort to empower consumers, workers and small businesses,” Furman said.

(Reporting by Timothy Gardner, additional reporting by David Shepardson; editing by Michael Perry and Meredith Mazzilli)