According to a Congressional analysis released mid 2015, the average household spends close to $230 each year on rental fees for cable set-top boxes, creating a market worth close to $20 billion yearly. However, according to Consumer Federation of America, households overpay anywhere from $6 billion to $14 billion yearly.
The majority of cable providers give their customers an option to rent cable boxes by paying an average $10 monthly fee for each one. However, the advertised prices for services from cable companies very rarely cover those costs. The devices rented are usually produced by Motorola or Cisco, and customers find it more convenient to rent them through the provider and get access to services such as On Demand and DVR.
In light of the latest estimates on over-charging, the FCC is trying to lower the costs of box rentals for consumers by introducing a proposal which would give customers the option to choose which cable device they want. This would open the market to companies such as Apple and Alphabet to develop new devices which could both host cable and streaming services.
Long Time Coming
The proposal, which will be put to a vote on February 18th, is based on the 1996 Telecommunications Act which dictates commercial and competitive availability for set-top boxes. However, the main source of boxes for customers has been cable companies.
The FCC already attempted to address the issue nine years ago with the introduction of CableCARDs, a system that made it possible for consumers to buy a third-party set-top cable box and then rent a card at a lower rate. The cards would be installed into the third-party box and would enable cable service. However, due to lack of interest and compatibility issues this attempt failed. The latest proposal seems to be carrying more merit, as major cable companies have already established a Future of TV Coalition to oppose it.