OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
July 11, 2016
The Honorable Adam Kinzinger
U.S. House of Representatives
1221 Longworth House Office Building
Washington, D.C. 20515
Dear Congressman Kinzinger:
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 aimually. 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, 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 Adam Kinzinger
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 Ann Kirkpatrick
U.S. House of Representatives
201 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Kirkpatrick:
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 detennined 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 Ann Kirkpatrick
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 John Kline
U.S. House of Representatives
2439 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Kline:
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 John Kline
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 Doug LaMalfa
U.S. House of Representatives
322 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman LaMalfa:
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 statutoly 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 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 Doug LaMalfa
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 Doug Lamborn
U.S. House of Representatives
2402 Raybum House Office Building
Washington, D.C. 20515
Dear Congressman Lamborn:
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 Doug Lamborn
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 Leonard Lance
U.S. House of Representatives
2352 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Lance:
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 Leonard Lance
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 Latta
U.S. House of Representatives
2448 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Latta:
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 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 Latta
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 Billy Long
U.S. House of Representatives
1541 Longworth House Office Building
Washington, D.C. 20515
Dear Congressman Long:
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 Billy Long
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 D. Lucas
U.S. House of Representatives
2405 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Lucas:
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 statutoly 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 Frank D. Lucas
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 Kristi Noem
U.S. House of Representatives
2422 Rayburn House Office Building
Washington, D.C. 20515
Dear Congresswoman Noem:
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 BILLrNG
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 Kristi Noem
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 Rick Nolan
U.S. House of Representatives
2366 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Nolan:
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 Rick Nolan
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 Pete Olson
U.S. House of Representatives
2133 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Olson:
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 Pete Olson
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 conmient 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 Steve Pearce
U.S. House of Representatives
2432 Raybum House Office Building
Washington, D.C. 20515
Dear Congressman Pearce:
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 Steve Pearce
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 Collin C. Peterson
U.S. House of Representatives
2204 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Peterson:
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 Collin C. Peterson
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 Mike Pompeo
U.S. House of Representatives
436 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Pompeo:
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. I 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 Mike Pompeo
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