The Federal Communication Commission (FCC) proposal to “open up” the pay TV set-top box market to competition may disrupt the industry’s ongoing efforts to reduce customer electricity costs by more than $1 billion per year. And just as consumers are moving toward apps instead of boxes to receive content from their cable and satellite company, the FCC proposal could possibly require the introduction of yet another box into consumers’ homes.
Today consumers have very little choice in the set top boxes that go into their homes and are restricted in most cases to renting them solely from their service provider. While the goal of the FCC rulemaking to increase competition and to allow consumers to buy their own set-top boxes at retail is a laudable one, the Commission has not considered the energy and environmental consequences when it developed its proposal.
There are roughly 150 million set-top boxes in the United States and they currently consume a lot of energy.
The vast majority of U.S. households subscribe to pay television services from their cable, satellite, or telephone company. The service providers—companies like Comcast, Dish Network and AT&T—are the ones that purchase the set-top boxes from manufacturers and rent them to customers for installation in America’s homes. As of 2014—the last year for which such data is available—these boxes consumed roughly $3 billion of electricity annually, which the consumer is stuck paying. This is the equivalent of nine large (500 MW) coal-burning power plants worth of annual electricity output and the cause of approximately 16 million tons per year of carbon dioxide, the main heat-trapping pollutant responsible for climate change.
The good news is that due to a voluntary agreement the service providers and the companies that manufacture the boxes are beginning to make some real progress in reducing their energy use.
In some cases, such as the new offering by Time Warner Cable, the customer can watch TV without the need for a set-top box. Customers with a smart TV and a wireless network can simply install an app and watch shows directly on their television. Alternately, a consumer can purchase and connect a low energy-consuming Roku stick or Roku box to their TV and then access the Time Warner Cable application that way. These solutions remove the hassle and cost of renting a set-top box for each television and other service providers are due to roll out similar services in the near future.
The FCC proposal has unintended consequences that could result in higher national set-top box energy use.
The FCC is interested in unlocking the set-top box market so that consumers will have greater choice in the set-top box that goes into their home and can directly purchase the box if they wish. President Obama has also expressed his support of this initiative. While we also agree with this goal, it appears the current draft could interfere with the energy-savings “boxless” approach described earlier. And in many cases, the service provider may be required to deliver a new box in each home that goes between the incoming video content and the TVs in the home. This box would essentially “disaggregate” the incoming materials from the service provider so that other companies can then repackage this content and offer it to consumers along with other features and software enhancements. The potential energy use of these new boxes is unknown but given the tens of millions of households that might need such a new box, the national impacts will really add up.
We urge the FCC to carefully review their proposal from an energy and environmental point of view and for its final rule to allow low energy-consuming, consumer friendly solutions such as the “boxless” approaches to continue to move forward.
If the FCC gets it right, consumers will have increased choices of the boxes that go into their home AND the national energy used to provide pay television services in our homes will continues to decrease. That’s definitely worth tuning in to!