FCC has taken a big step in how the cable industry works

In a three-to-two vote, the FCC has decided to move ahead with a proposal that could drastically change the cable set-top box industry. The decision may have far-reaching consequences for how cable customers watch TV — ultimately allowing them to go through third parties for their set-top systems, rather than being tied to the same company they use for cable service.

The proposed rule changes will now move into a comment period — where businesses and customers will be able to weigh in — ahead of revisions and a final vote, still some months away. FCC Chairman Tom Wheeler first announced the proposed rule changes last month, and it's been met by criticism from a cable industry that has long kept the keys to the castle. Cable companies have argued that the future may leave the cable box behind entirely — focused, instead, on apps — and that the FCC is driving innovation from the wrong direction.

Wheeler argues that if any company can build a box that can communicate with any TV service, those companies will be able to get started building cable boxes rather than having to work out other deals first. The competition, the Chairman argues, will drive down costs and improve device options for consumers. He said at the assembled meeting that "consumers have no choice today," and that the proposed rules did not make major changes for consumers. "It only creates the opportunity for them to have choice."

"While the cost of other technologies have fallen as competition increased, the cost of a set-top box has risen at more than three times the rate of inflation for American paid-TV subscribers over that same period," FCC Commissioner Mignon Clyburn said at the meeting, in support of the proposed rules. She noted that more than $200 per year was spent on set-top box rentals.

Commissioner Ajit Pai opposed the proposal, arguing that the decision would simply be changing "one complex regulatory scheme for another." "I know that the current set-top marketplace is the product of an intrusive regulatory regime," Pai said.

"This is not complex," Wheeler said, before the vote. "The law mandates it, technology allows it, the industry at one time proposed something similar to it, and consumers deserve a break and a choice."