The FCC's cynical set-top box play

[Commentary] The Federal Communications Commission recently announced that it intends to vote this month on a "Notice of Proposed Rulemaking" aimed at creating a competitive retail market for video set-top boxes, a move that gives clear meaning to the biblical proverb "as a dog returns to his vomit, so a fool repeats his folly." Accordingly to FCC Chairman Tom Wheeler, the problem is one of price. However, if Chairman Wheeler's central argument for government intervention is price, then my question back to the chairman is this: If the government could set the price for a set-top box, what would that price be? With Chairman Wheeler's "high price" ruse thus exposed, we must ask: What is this new proposal really about?

Chairman Wheeler's new plan isn't about equipment at all; instead, his plan is nakedly designed to force Multichannel Video Programming Distributors (MVPDs) to make available to third parties not only information about what programming is available to consumers (including channel listings and on-demand options), but access to the programming itself. At bottom, the plan allows edge providers to confiscate another company's product — and the viewers it works hard to acquire — by doing little more than repackaging it to create their own video service without having to negotiate and pay for content. Whether in the form of network neutrality, special access regulation, piracy, spectrum auctions or now set-top boxes, the agency is now in the near-exclusive business of shifting profits among corporate giants. Consumers are merely pawns in the game of special-interest squabbles that use the regulator to get a leg up. As a former FCC staffer, I have defended the relevance of the agency on numerous occasions. It is becoming an exhausting and increasingly difficult position to maintain.

[George S. Ford is the chief economist of the Phoenix Center for Advanced Legal & Economic Public Policy Studies.]