OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHI NGTON
August 23, 2016
The Honorable Steve Scalise
U.S. House of Representatives
2338 Raybum House Office Building
Washington, D.C. 20515
Dear Congressman Scalise:
Thank you very much for your letter regarding the Commission's proceeding for better
fostering competition in the set-top box and navigation app marketplace. I take your input on
these issues 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. 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.
As you mention, 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 fmal decisions. Our record
already contains more than 280,000 filings, the overwhelming majority of which came 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. These conversations have covered a wide range of issues, included those raised in
the cable industry's one-page filing on June 16, 2016. I am hopeful that these discussions will
yield straight-forward, feasible and effective rules for all.
1US SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELANI1) SECURITY AND
GOVERNMENT AFFMRs 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 Scalise
The record we are developing will help us preserve strong privacy protections and strong
copyright protections, as well as avoid overburdening small pay-TV providers while delivering
American consumers meaningful choice and opening new opportunities for independent and
minority programmers. 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