Set Top Box Competition: What’s Not to Like?

[Commentary] Only in this pay to play, partisan world could two out of three Federal Communications Commission members rise in opposition to an overdue initiative to save consumers billions of dollars.

Cable and DBS companies will join the opponents along with sponsored researchers who will trot out all sorts of bogus rationales. I’ll start by using two words to dismiss what appears to be the first gambit rationalizing a monopoly set top box marketplace. The narrative goes something like this: “Why fix something that isn’t broken? Just look at those so-called Tivo boxes. Have you seen their prices? My response in two words: umbrella pricing. Tivo charges what the market will bear, and in an artificially uncompetitive market it can use the outrageous set top box rental box rates to establish an equally outrageous sale price. If the FCC removes the government-sanctioned near monopoly, then cable, DBS and set top box manufacturers simply will have to sharpen their pencils and offer consumers a far better value proposition.