OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Renee Ellmers
U.S. House of Representatives
1210 Longworth House Office Building
Washington, D.C. 20515
Dear Congresswoman Elimers:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, iNSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Renee Elimers
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Tom Emmer
U.S. House of Representatives
503 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Emmer:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE BOX: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Tom Emmer
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Stephen Fincher
U.S. House of Representatives
2452 Raybum House Office Building
Washington, D.C. 20515
Dear Congressman Fincher:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Stephen Fincher
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Bob Gibbs
U.S. House of Representatives
329 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Gibbs:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Bob Gibbs
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Paul Gosar
U.S. House of Representatives
504 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Gosar:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment. 1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Paul Gosar
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Sam Graves
U.S. House of Representatives
1415 Longworth House Office Building
Washington, D.C. 20515
Dear Congressman Graves:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE BOX: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Sam Graves
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Morgan Griffith
U.S. House of Representatives
1108 Longworth House Office Building
Washington, D.C. 20515
Dear Congressman Griffith:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Morgan Griffith
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Glenn Grothman
U.S. House of Representatives
501 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Grothman:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Glenn Grothman
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Frank Guinta
U.S. House of Representatives
326 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Guinta:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Frank Guinta
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Brett Guthrie
U.S. House of Representatives
2434 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Guthrie:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
1 U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INS IDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Brett Guthrie
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Richard Hudson
U.S. House of Representatives
429 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Hudson:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Richard Hudson
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Tim Huelskamp
U.S. House of Representatives
1110 Longworth House Office Building
Washington, D.C. 20515
Dear Congressman Huelskamp:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
1 U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Tim Huelskamp
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Will Hurd
U.S. House of Representatives
317 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Hurd:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
'U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Will Hurd
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11,2016
The Honorable Lynn Jenkins
U.S. House of Representatives
1526 Longworth House Office Building
Washington, D.C. 20515
Dear Congresswoman Jenkins:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996, requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.1 With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE BOX: CUSTOMER SERVICE AND BILLING
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Lynn Jenkins
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Bill Johnson
U.S. House of Representatives
1710 Longworth House Office Building
Washington, D.C. 20515
Dear Congressman Johnson:
Thank you very much for your letter sharing your views about how the Commission's
proceeding for better fostering competition in the set-top box and navigation app marketplace
might impact small pay-TV providers. I take your input on this issue seriously and assure you
that it will receive careful consideration.
Section 629 of the Communications Act, adopted by Congress in 1996. requires the
Commission to promote competition in the market for devices that consumers use to access their
pay-television content. Yet, unfortunately, the statutory mandate in section 629 is not yet
fulfilled. The lack of competition in this market has meant few choices and high prices for
consumers. In a recent Rasmussen Report Study, 84 percent of consumers felt their cable bill
was too high. One of the main contributing factors to these high prices is the no-option, add-on
fee for set-top box rental that is included on every bill, forcing consumers to spend, on average,
$231 in rental fees annually. Even worse, a recent congressional investigation found that the
price of most equipment fees is determined by what the market will bear, and not the actual cost
of the equipment.' With the lack of competition in this market, it should come as little surprise
that fees for set-top boxes continue to rise.2 Clearly, consumers deserve better.
This February the Commission put out for public comment a proposal that would fulfill
the statutory requirement of competitive choice for consumers. This action opened a fact-finding
dialog to build a record upon which to base any final decisions. Our record already contains
more than 280,000 filings, the overwhelming majority of which come from individual
consumers. FCC staff is actively engaged in constructive conversations with all stakeholders-
content creators, minority and independent programmers, public interest and consumer groups,
device manufacturers and app developers, software security developers, and pay-TV providers of
all sizes-on how to ensure that consumers have the competition and choice they deserve. I am
hopeful that these discussions will yield straight-forward, feasible and effective rules for all.
I U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENT AFFAIRS COMMITTEE, MINORITY STAFF REPORT, INSIDE THE Box: CUSTOMER SERVICE AND BILL[NG
PRACTICES IN THE CABLE AND SATELLITE INDUSTRY, 17 (Jun. 23, 2016).
2 One recent analysis found that the cost of cable set-top boxes has risen 185 percent since 1994 while the cost of
computers, television and mobile phones has dropped by 90 percent during that same time period.
Page 2-The Honorable Bill Johnson
I share your goal of ensuring that pay-TV subscribers in all parts of our country can enjoy
the benefits of consumer choice without unduly burdening small providers of pay-TV.
Recognizing the important role that small pay-TV providers play in many rural communities, the
Notice of Proposed Rulemaking (NPRM) adopted in February seeks comment how this
proceeding could affect these providers. Notably, the NPRM proposes to exempt all analog
cable systems from new requirements while also seeking comment on the American Cable
Association's proposal to exempt all pay-TV providers serving one million or fewer subscribers
from any rules. The NPRM further asks how the Commission can ensure that any rules adopted
are not overly burdensome to pay-TV providers. We are continuing to engage with all
stakeholders on this issue, including small pay-TV providers. Customers of providers of all sizes
deserve choice and innovation, and I am confident that we will be able to find a balance that
accurately reflects the technology and resources available to truly small providers.
The record we are developing will help us avoid overburdening small pay-TV providers
while delivering all American consumers meaningful choice. Thank you for your engagement in
this proceeding, and I look forward to continuing to work with you on this important consumer
issue.
Tom Wheeler