Comcast retreats on set-top boxes, offers FCC a new plan

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File photo: U.S. FCC Chairman Tom Wheeler testifies before the House Communications and Technology panel on Capitol Hill in 2013.

In a concession to regulators, Comcast Corp. has proposed developing an app-based model for set-top boxes that could lead consumers to ditch boxes that cost $230 a year to rent.

With it, set-top boxes would evolve similarly to smartphones loaded with apps. Only in this case, a store-bought set-top box would be loaded with apps for television services such as Comcast's Xfinity TV.

Those seeking set-top box reforms said the idea sounded like a good one but warned that other set-top box reform plans had fizzled over the last 20 years.

Comcast and AT&T, the parent company of DirecTV, presented the idea on Wednesday to the Federal Communications Commission that is considering a reform proposal that would ease the entry of technology companies such as Google into the $20 billion set-box market, an FCC filing shows.

Set-top boxes are the devices that connect TV services to televisions. Most consumers rent them from their pay-TV provider.

FCC Chairman Tom Wheeler, a former lobbyist for the cable industry, has taken a hard line with pay-TV companies over the last two years and industry officials believe that his set-top box proposal could be a new economic blow.

With Wheeler's plan, pay-TV insiders fear that Google could take over the search function on TVs and then sell advertising around those searches. They also say that subscriber privacy could be compromised.

The five FCC commissioners, three Democrats and two Republicans, could formally vote on Wheeler's plan at the agency's August public meeting.

Chip Pickering, the chief executive officer at the Incompass, an industry group backing Wheeler's plan, said the pay-TV industry's app-based model was "some positive movement" in the debate over bringing competition to the national set-top box market. But he also said the cable industry has made promises about set-top boxes in the past "that have not materialized."

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