Changing world of TV and video (Spring 2016)

In its Spring 2016 issue, Consumer Action News examines your viewing options

Table of Contents

Ever-expanding options for viewing pleasure

By Ruth Susswein

How we watch, receive and pay for television programs has advanced in ways that few would have predicted. The options are a bit mind-boggling. This issue of Consumer Action News is meant to help you better understand the rapidly changing TV and video landscape and how to make the most of your viewing choices.

We’ve gone from the 1970s, watching one of three free national broadcast networks on our stationary TVs, to paying for cable or satellite TV services for access to a wide range of specialty programs and networks (ESPN, HBO, the Food Network, MTV, etc.), whether we watch them all or not.

Cable companies don’t stop at TV, now they sell Internet access and telephone service for a monthly package price that often tops $200.

More recently, viewers have turned to online video streaming services like Netflix, Amazon (Prime) Video and Hulu to watch TV programs and movies of their choosing, whenever they want to, on a variety of devices.

Today we can receive programs directly through our computers, tablets and smartphones via video streaming services accessed through Web browsers or mobile apps. We can watch a limited amount of content for free (usually with ads), or subscribe to individual streaming services that allow us to watch movies or television series ad-free, and “binge-watch” as many episodes as we want.

Streaming video refers to watching content sent via the Internet to your receiver (personal computer, mobile device, streaming media player, “streaming stick,” game console or smart TV). You can watch videos when you feel like it (“on demand”), and your viewing options aren’t limited to what’s being broadcast on set days at set times.

To view streaming video on a computer, smartphone or tablet, you need a:

  • High-speed broadband Internet connection
  • Paid video streaming subscription (Netflix, Amazon Video, Hulu Plus, etc.) or a free video service (YouTube, Hulu, etc.)

To view streaming video on a standard TV, you also need a:

  • Streaming media player, which could be a streaming media set-top box (Roku, Apple TV, Amazon Fire, etc.) or a streaming media stick (Chromecast, Fire TV, Roku, etc.) or a game console (Xbox, PlayStation, Wii, etc.)

For more on streaming methods, see How to stream video.

Streaming services typically charge a monthly subscription fee to access movies, original series (such as Netflix’s “Orange Is the New Black” and “House of Cards”), current and classic TV programs and more. (Amazon’s Prime fee is annual, or you can rent or buy programs individually. Some, like Crackle, are free but you must endure commercials.)

Streaming media players are a one-time purchase. For help in evaluating which media player to buy, visit Tom’s Guide. For consumers who own a smart TV (an Internet-connected TV with built-in browser, made by electronics manufacturers like Samsung, LG and Vizio), you typically don’t need a media player unless the TV doesn’t feature a particular streaming provider’s “app” that you want. (For example, you can watch the Public Broadcasting System via an app on Roku but not on a Samsung Smart TV.) On smart TVs, streaming services are accessed through pre-installed “apps” similar to those on your smartphone.

Cable and satellite “pay-TV” providers (Comcast, Time Warner, Verizon, Dish, DIRECTV, etc.) offer one-stop-shop access to hundreds of channels of programming for a monthly access fee. In addition to the access fee, most subscribers also pay a monthly fee (of $4 to $25) to rent a company’s cable box. Additional boxes for cable access in other rooms of the house can cost as much as $10 each.

With their wide variety of a la carte programming and lower monthly fees, video streaming services are convincing many cable TV customers to “cut the cord” on cable and satellite services. In trying to prevent the hemorrhaging of pay-TV customers to their streaming competitors, the industry is fighting back with stand-alone subscriptions to movie channels like HBO and Showtime, or “skinny bundles” instead of the giant variety pack of programs that pay-TV providers typically force customers to buy.

For avid sports fans, pay-TV remains the only source for certain high-profile sporting events and is a primary reason why many viewers haven’t cut the pay-TV cord.

Cheaper than cable but pricier than streaming services, consumers can replace pay-TV with services like Sling TV or PlayStation Vue, which connect viewers to many traditional TV channels and movies for far less money. But if the goal is to save money, viewers should be careful not to add too many extras, such as a sports package or HBO, to their monthly bill, or any savings will soon disappear. (See next story for a comparison of typical monthly subscriber fees.)

Sampling the costs of your viewing options

By Alegra Howard

The average cable TV bill hit a record $99.10 in 2015 (a 39 percent increase from 2010), causing many consumers to opt out of pay-TV.

“Cutting the cord” is easier to do these days thanks to streaming devices and smart TVs, high-speed Internet, and companies like Netflix and Hulu that have revolutionized the way consumers watch television and movies.

But will shutting down your cable service and switching to streaming actually save you money? That depends on your video viewing preferences.

Cable costs

A quick survey of Comcast, Time Warner and Verizon Fios found that a basic cable subscription costs between $10 per month (Time Warner Starter TV) and $54.99 per month (Verizon Fios Custom TV) for a limited-channels package. Prices vary based on your region and length of contract.

Don’t forget the monthly cable box rental fee. The box descrambles television signals so paying customers can watch, but freeloaders are shut out. Box rental fees run between $3.99 a month (Comcast) and $24.75 a month for a high definition digital video recorder (DVR) box (Time Warner). Taxes, fees and local surcharges can tack on as much as 20 percent more to your monthly bill, causing sticker shock and a discrepancy from the deal you originally signed up for.

Satellite TV

Satellite television is a competitively priced alternative to cable, and is especially appealing to those living in rural areas, where cable may not be an option. Depending on availability in your region, we found introductory deals for consumers who aren’t afraid of a two-year contract and have a decent credit history. The cheapest packages ranged from $19.99 (DIRECTV) to $34.99 per month for 12 months (DISH). In year two, DIRECTV’s offer increases to $51.99 per month, while DISH’s price locks in at $34.99 per month for three years. Based on the package you choose, you can have limited or extensive programming including HD channels, premium movie channels like HBO and Showtime (for an extra $15 a month after the free, three-month introductory period), sports and Spanish-language packages.

DISH had three different types of set-top boxes available to rent, ranging from $7 per month for a basic box up to $15 per month for a high definition DVR. DIRECTV didn’t charge a box rental fee for the first year, but it does charge a $22 monthly equipment fee.

DIRECTV, now owned by AT&T, recently announced that it plans to offer viewers new video streaming packages, which will not require a satellite or cable connection, later this year. No pricing information was available at the time of this writing.

One current downside to a satellite package is its lack of Internet service. Both providers fail to compete with cable companies in offering broadband Internet service. DISH offers a slower-speed digital subscriber line (DSL) Internet service, which could make it difficult to stream movies. In some regions, both DISH and DIRECTV partner with third parties such as AT&T or Verizon to provide customers with high-speed Internet access. However, high-speed Internet is not currently an option everywhere in DIRECTV territory.

Streaming costs

If you’re interested in ditching cable for some streaming video subscription services like Netflix, Hulu and Amazon (Prime) Video, you’ll need a high-speed Internet connection and, if you don’t want to watch directly on your computer, smartphone or tablet, either a smart TV or a streaming media player/game console that you connect to your regular television to access streamed content. And, you’ll pay a monthly subscription fee. Here’s a breakdown of costs:

Internet fees. Time Warner offered the cheapest Internet-only subscription we found, at $14.99 per month for a slow Internet speed of 3 Mbps (megabytes per second). For optimal streaming of movies and other video content, you’ll want a faster speed (50 Mbps), at $34.99 a month (for 12 months). Now add a $15.95 monthly rental fee for the wireless modem. Total: You would spend either $30.94 per month for the slower option or $50.94 per month for the faster one, plus taxes, plus a one-time $39.99 Internet set-up fee.

The priciest low-end option was Verizon Fios, with 50 Mbps Internet speed for $59.99 a month ($49.99/mo. with a two-year contract), plus a $10 per month modem rental fee. Total: $69.99 per month, plus taxes, plus a hefty Internet set-up charge of up to $150.

Streaming media players. If you don’t own an Internet-enabled (“smart”) TV, you’ll need to purchase a streaming media player. These systems cost anywhere from $35 for a Google Chromecast or Amazon Fire TV Stick up to $400 for a PlayStation 4 game console and media player. Other popular media players include Apple TV ($69 to $180) and Roku Streaming Players ($50 to $130). If you’re not sure which to choose, be sure the programming you’ll want to watch from a streaming content provider is compatible with the media player you purchase. For example, Google Chromecast will stream Google Play apps and Pandora, but won’t stream Amazon Video, Sling TV or iTunes.

Streaming service providers. Providers like Netflix, Hulu and Amazon Video offer access to thousands of movies and television shows for a fee ranging from $7.99 a month for Hulu (with some commercials) to $99 a year for an Amazon Prime subscription (also includes two-day shipping via Amazon.com, access to Kindle’s library, unlimited music streaming and photo storage).

Netflix charges $9.99 a month, and is known for smooth playback service and a huge library of movies and programs. While all three of these companies have tons of content and their own original series, Hulu is the only one that offers access to current TV programming (available one day after it airs) from FOX, NBC, ABC and the CW, as well as delayed or archived content from cable channels like Comedy Central and FX.

You can add CBS shows to your Hulu subscription for an extra $5.99 per month. The downside: Even if you’re only going to watch a few shows from each provider, you must pay the monthly subscription fee.

Sling TV can satiate your desire for cable/satellite content by offering “on demand” movies and live TV, including basic cable channels AMC, TNT, TBS, A&E and ABC Family, for $20 a month. Sling TV also provides access to ESPN and ESPN2. For another $5 per month, you can add a Spanish channel package, kids programming or additional sports networks.

One downside for Sling has been playback problems. During last year’s NCAA Final Four tournament, Sling TV’s service failed many customers, leading the company to issue an apology. Another downside of Sling TV: Digital video recorder capabilities may be limited to functions such as “pause” and “rewind” while streaming live television.

Sports lovers who have cut out pay-TV still have a few streaming subscription options for viewing live or archived games. Baseball fans can stream regular season games live or on demand with a $3 monthly ($20 annual) At Bat Premium subscription. NHL TV has a $49.99 per year plan for hockey fans to stream live, out-of-market regular season games. Basketball fans can stream some games as soon as three hours after they’ve aired with an NBA League Pass subscription ($99.99 per year). In addition to hefty price tags, blackouts are a downside to these services. Local games are generally exclusive to regional sports networks, so you’ll likely need pay-TV to watch them live.

If it’s premium-TV programming you’re after, an HBO Now subscription streams HBO movies and series on your phone, tablet or smart TV for $14.99 a month. Showtime is available with an Amazon Prime or Hulu subscription for an extra $7.99 a month. Otherwise, stream Showtime’s series and movies by downloading the Showtime app and paying the $10.99 a month subscription fee.

Savings?

What does it all mean in terms of savings? Let’s compare some examples:

1. Stream without cable (no contracts, cancel anytime). Equipment: An Apple TV set-top box (purchase for about $69)

Internet access: Time Warner (50 Mbps for $34.99/month) and modem rental ($15.95): $50.94

Streaming network TV channels: Hulu subscription with limited commercials ($7.99) and additional CBS package ($5.99): $13.98

Streaming cable TV channels: Sling TV subscription ($20) with extra sports package ($5): $25

HBO Now subscription: $14.99

Monthly total: $104.91

2. Sample monthly “promo” cost for limited cable/Internet packages.

Note: Introductory deals from cable providers typically lock you into a one- or two-year contract. Any streaming services (like Netflix) that you buy are extra.

A. Time Warner offer of limited basic TV channels, Showtime and HBO, with 50 Mbps Internet: $44.99 a month in year one/$64.99 year two

Equipment: Rent wireless modem if you do not own one ($15.95 per month) and a cable box ($11.75 per month)

Monthly total A: Excluding taxes, $72.69 in year one, $92.69 in year two

B. Comcast Xfinity offer of limited basic TV, HBO and 25 Mbps Internet: $44.99 a month in year one/$64.99 year two

Equipment: Rent wireless modem if you do not own one ($10 per month) and a cable box ($10 per month)

Monthly total B: Excluding taxes, $64.99 in year one, $84.99 in year two

Other considerations

There are a lot of options available to consumers looking for pay-TV alternatives. Here are some of the things to consider:

  • How important is watching live sporting events to you? If you’re a March Madness fanatic and intend to host this year’s NCAA Championship party, you’re not ready to cut the cord.
  • Do multiple people in your home stream video at the same time? More devices streaming video at the same time requires faster Internet speeds, meaning pricier monthly Internet costs.

Your options are abundant, and costs can climb quickly depending on how many services you subscribe to. But with pay-TV costs projected to rise another three to four percent this year, it’s worth investigating your alternatives.

Streaming privacy along with your video?

By Linda Sherry

As people “stream” and view digital videos virtually anyplace, on devices that are at the ready 24 hours a day, the privacy of our viewing habits is bound to come into question.

Since a lot of video streaming is done via browsers, it must be assumed that online advertisers are tracking our viewing histories. Cross-device tracking is commonly used by advertisers to link information about your online behavior across multiple Internet-connected devices, such as smartphones, tablets and smart TVs.

All this raises questions about the rights of Internet users to control what is done with their personal information. Unfortunately, at this time the answers are not so simple and our rights are not particularly robust.

The Video Privacy Protection Act (VPPA) was passed in 1988, after the press gained access to the video rental history of U.S. Supreme Court nominee Robert Bork. The VPPA prohibits “video tape” service providers from knowingly disclosing users’ personally identifiable information (PII) to third parties.

The VPPA is a strong law that creates an individual right to sue (called a private right of action) and allows a court to award damages of $2,500 or more per violation (plus attorney fees).

But streaming video companies have brought court cases saying the law doesn’t apply to them.

In 2011, TV show streaming service Hulu was hit with a class action lawsuit claiming it had violated the VPPA by sharing user information with Facebook. In the Re Hulu Privacy Litigation case, plaintiffs charged that Hulu disclosed user identities and other personal information protected by the VPPA via Hulu’s Facebook “Like” buttons. Last year, a district court found there was not enough evidence to judge whether Hulu had “knowingly” disclosed to Facebook the videos that Hulu users had watched. Both parties agreed to drop the suit.

However, earlier in the case, U.S. Magistrate Judge Laurel Beeler concluded that a term used in the VPPA (“similar audio visual materials”) was a “broad phrase designed to include new technologies for pre-recorded video content.” Judge Beeler’s 2012 decision marked the first time a court opined that the VPPA covers streaming video technology. Whether this set a precedent is not clear, and privacy advocates have called on Congress to amend the law’s protections to ensure it applies to all companies that provide streaming video services.

Social sharing buttons on streaming sites are a result of an amendment to the VPPA that went into effect in 2013. Streaming company Netflix lobbied Congress to change the law so that viewers could share their online video viewing habits, which would have been prohibited under the VPPA. The amendment made it easier for businesses to obtain user consent and to share personally identifiable information about movies and other streaming content. (Those who decide to share such information with Facebook friends can adjust privacy settings in Facebook so that only certain people see their posts.)

Apps

Most mobile software (“apps”) is free to download onto your smartphone or tablet. Apps can track you and send information to third parties for marketing and other purposes. There are no specific privacy laws that protect the information apps collect, and most require users to consent to data collection for the apps to work. In effect, consumers who use free (and even paid) mobile apps pay a hidden price of sharing information about themselves. While online users can employ do-not-track tools such as browser plug-ins Do Not Track Plus and Ghostery, and can adjust built-in browser privacy settings, apps stand alone and work outside browsers. (If users find blatant deceptiveness and unfairness in app functionality, they can submit complaints to the Federal Trade Commission.)

On another front, live streaming video apps such as Meerkat and Periscope raise new questions about the privacy of bystanders (people being filmed inadvertently), private conversations and copyrighted material. Live streaming apps enable mobile users to send video recordings from their device’s camera and stream them online in real time. Videos (or photos) taken in a public setting usually are exempt from privacy obligations. But if they are used for commercial purposes, people whose images are displayed have a right to sue if they have not given their consent.

Both Meerkat and Periscope prohibit users from posting videos that would constitute copyright infringement. It’s early days for the legal ramifications of live streaming video, but users should be aware that when they provide content, they are required to comply with commercial publicity and copyright laws that protect individuals’ rights.

ISP privacy

The principle of an “open Internet” means consumers can browse where they want, when they want and on any device they want. This is often referred to as Net Neutrality. The Federal Communications Commission (FCC) enshrined that right last year when it adopted its Open Internet rules.

Internet service providers (ISPs) also face new responsibilities for protecting the privacy of their customers’ personal information. The FCC applied the customer privacy protections of the Communications Act to broadband Internet providers, however the details of exactly what will be considered private customer information have yet to be determined. The FCC says it will continue to enforce against the misuse or breach of customers’ private information, as it has done with telecommunications carriers.

Rules regarding broadband privacy will be developed at the FCC during 2016, although no proposals have been floated nor dates set for rulemaking.

Cable systems

Under the federal Cable TV Privacy Act, cable TV operators are required to protect subscribers’ personally identifiable information (PII), and must provide an annual written notice of:

  • What personally identifiable information is collected and how it’s used
  • How frequently it’s disclosed and for what purpose
  • How long the information is maintained
  • Where and when the subscriber may access the information

Cable operators are also prohibited from using the cable system to collect or disclose personal information without a subscriber’s written (or electronic) consent and must take action to prevent unauthorized access to PII in subscriber accounts.

In a few states, including California, protections may also apply to the apps that cable companies provide to watch content on websites or mobile devices.

Internet of things

If a device connects to the Internet, it’s vulnerable to data breaches by hackers. Recently, “smart” TVs—Internet-enabled television sets—became a focus of privacy concerns when security researchers were able to hack into a smart TV and turn on its built-in camera and microphones. Experts say that hackers could steal logins and passwords, and, in the worst-case scenario, spy on people in their homes.

According to an NBCNews.com article by Herb Weisbaum published in January, authorized security engineers were able to infect a smart TV with “ransomware,” which locks the device until the owner pays to unlock it. (Fraudsters have used ransomware to extort money from computer owners who inadvertently download malicious software.)

Last year, ProPublica reported on electronics manufacturer Vizio’s tracking policies. On Vizio’s modems and smart TVs, tracking was enabled by default, and the company connected IP addresses (device identifiers) with viewing habits to allow advertisers to deliver ads to other devices on the same network (like a phone or tablet). Wirecutter found that Vizio was not the only manufacturer with such policies, and reported its findings late last year in an article titled Your Privacy, Your Devices, and You.

Knowing that smart TVs can be vulnerable, owners should make sure they install all updates to the TV software, download apps only from trusted sources and not input sensitive, personal or financial information using the TV’s browser or apps. An expert interviewed by Weisbaum suggested people with home Internet service should establish a guest account on their Wi-Fi network and connect the TV to the guest account, which can prevent hackers from getting into computers and other electronics in the home. Search for “set up guest Wi-Fi access point” online or call your ISP for instructions.

Consumer Action has created a new fact sheet called Watch out! Online video and your privacy about issues consumers need to be aware of when streaming video content, creating and uploading video, live streaming, webcams and being present at public events that are being recorded.

We’re also advocating for the strongest rules to protect ISP customers’ privacy.

Look for more on these in our free monthly Consumer Action INSIDER newsletter. Not a subscriber? You can sign up here: bit.ly/get_insider.

How to stream video

By Monica Steinisch

Streaming—watching content in “real time,” sent via the Internet—has become a realistic option for many more consumers, thanks to the growing availability of high-speed Internet, the development of streaming devices and the proliferation of video “content.”

How and what you stream depends on your equipment (devices), your software and apps, your budget and personal preferences. If you’re not streaming video yet but would like to start, the information here will help you sort out your options.

On a computer

Generally you will need a:

  • Fast Internet connection—called broadband
  • Relatively recent computer operating system (OS) (Windows, Android, Apple iOS)
  • Recent version of a Web browser (Firefox, Safari, Internet Explorer or Chrome, for example). (You may also need additional software, called a “plug-in,” such as Microsoft Silverlight, Adobe Flash Player or Apple QuickTime Player. If not preinstalled on your computer, a notice will pop up on your screen alerting you that it is available for free download.)

Video streaming service (Netflix, Amazon (Prime) Video, Hulu, etc.) websites typically provide detailed information about what you will need to stream and how to download and install any necessary software.

Once you’re connected, streaming is as easy as choosing what you want to watch and clicking Play, though some content will require a subscription or purchase. If you have technical difficulties, look for a Help or Support link on the website you are streaming from or in the operating system or software you’re using.

You can typically stream on Wi-Fi without a problem, but if your video is not playing or keeps stopping, try connecting the computer directly to the Internet modem or router with an Ethernet cable. Or, you can try to get closer to the Wi-Fi connection or boost the signal with a Wi-Fi range extender.

On a mobile device

Smartphones and tablets generally come ready to stream. There will be a lot of video you can watch on your mobile device without having to take any additional steps. If an app is required to watch a particular video and it’s not already installed on the device, you can download it from the Apple App store, Google Play Store or an app developer (Netflix, for example). Often, however, an app isn’t necessary, because you can just stream the video directly through the content provider’s mobile website (similar to its regular website, but optimized for mobile devices’ smaller screens).

How fast you can stream depends on your wireless connection: 4G mobile networks stream faster than 3G. Regardless of speed, streaming video can quickly drain your battery, so plan accordingly by limiting your play, carrying a portable battery charger or plugging in.

For smooth streaming over the long term, keep the operating system, browsers and apps updated as new versions become available.

Another benefit of mobile devices: You’re not limited to just watching streamed video, you can stream your own video for others to watch using an app such as Periscope or Meerkat.

To a television

If you prefer to watch on a full-size screen, you’ve got some choices for streaming to your TV. Here’s a recent comparison from Digital Trends.

HDMI connection: An HDMI cable allows you to connect almost any device to a TV that has an HDMI port. All digital TVs since the end of 2009 (and many before then) have at least one HDMI port. Adapters are available if the HDMI cable doesn’t match up to the port(s). While functional, a long cable going from your device on the couch to the TV across the room is not the most streamlined.

TIP: Resist being steered toward an expensive HDMI cable; cheap ones usually work just as well.

Set-top box: The streaming media player box plugs directly into your TV’s HDMI port and can operate on a wired or wireless high-speed Internet connection. Set-top boxes stream content to your TV directly from a streaming service. You don’t pay a monthly fee for this box the way you do for a cable box—you purchase it outright.

Set-top boxes include Roku, Amazon Fire TV, Apple TV and Android TV (various makes). The box you choose will depend largely on the devices you’re streaming from and the availability of apps and content you want to access.

For example, the Apple TV box works with Apple’s AirPlay technology to enable you to link devices on a single wireless network and stream video from a piece of Apple equipment onto your television screen. You can also use Apple TV to display what’s on your mobile device or laptop screen on the television.

Streaming stick: The Amazon Fire TV Stick, Roku Streaming Stick and Google’s Chromecast are smaller, more economical alternatives to the set-top box. About the size of a large thumb drive, these streaming media players plug directly into your TV’s HDMI port. Once plugged in, you choose the video you want to watch. The Roku and Amazon Fire sticks are operated with a remote control. With Chromecast, you have to use an app on your computer or mobile device.

Whether to go with a set-top box or a streaming stick depends on your budget and how serious you are about your technology (boxes are more powerful and, unlike the Chromecast stick, don’t require a computer or mobile device to control them).

To compare streaming sticks, see stories at Lifehacker and The Street.

For a recent comparison of streaming media players, visit CNET.

Game console: If you’re really into gaming and want a single device to play games and also view programming, consoles such as Xbox, PlayStation and Wii have video streaming capability. But if shows and movies are your top priority, go for a streaming media player, which will also give you some gaming.

Blu-ray player: Some Blu-ray players are Wi-Fi capable, meaning they have a built-in receiver to connect to your wireless router. Others are Wi-Fi ready, meaning that you need to purchase an inexpensive Wi-Fi adapter (a dongle) to connect it to the network. Once online, you should have the option to stream movies and shows from Netflix (with a subscription), videos on YouTube, music and maybe more.

While Blu-ray can be a good option if you still watch DVDs and your streaming needs are basic, it won’t offer you as many content choices as a dedicated streaming media player (set-top box or stick).

Smart TV: A smart TV has Internet connectivity and Web 2.0 features built into it, so no streaming media player is needed. Different makes and models will have different interfaces (what you see onscreen when you are controlling the TV) and pre-installed apps (streaming services), so shop around to get the one you’ll be happy with. Streaming after initial set-up is simple. But if you’re not in the market for a new TV anyway, using a set-top box, stick or game console will make more sense until you’re ready to invest.

For answers to some FAQs, see Smart TVs: Everything You Need to Know.

Regardless of which approach you take to streaming, you’ll need to keep (and pay for) your cable or satellite box if you want to continue watching all the stations you currently get through your TV service provider.

Or, to get just free over-the-air HDTV broadcasts (local channels, PBS, etc.), you could attach an HD antenna to your TV (approximately $20). (See Tom’s Guide.)

Coalition for video choice

By Linda Sherry

A recent proposal by the Federal Communications Commission (FCC) could make it cheaper and easier to watch TV, and a coalition Consumer Action is part of was an important influence in the decision-making process.

The Consumer Video Choice Coalition believes that consumers should be able to access cable television programming directly through any third-party device or app they purchase, rather than being locked into equipment leased to them by cable companies.

Today, virtually all cable customers rent their cable boxes directly from the providers, at an average cost of about $232 per year, according to the FCC. Big cable companies make about $19.5 billion every year on these rental fees alone. The coalition joined forces with the realization that these companies would not release their grip on consumers without a major battle. In this case, consumer interests aligned with those of some important tech and electronics companies, such as TiVo, Vizio, SiliconDust, Hauppauge and Google. Coalition members INCOMPAS and CCIA are trade associations representing communications and technology companies. Consumer Action, Public Knowledge and the Open Technology Institute (at New America) bring the perspective of the rights of individual consumers.

Late last year, cable industry lobbyists were successful in killing the future prospects of the one device that offered consumers competitive access to cable, the CableCARD.

At the end of the ‘90s, Congress mandated that cable companies allow viewers access to digital cable networks through third-party devices, leading to the eventual birth of the CableCARD. (Oddly, satellite TV providers were left out of the CableCARD requirement.) Unfortunately, the card solution was clunky and required customers to obtain the card directly from cable providers, which charged monthly fees to use it.

Despite last-minute efforts by Senators Richard Blumenthal (D-CT) and Ed Markey (D-MA) to keep CableCARD alive, requirements to maintain access were allowed to sunset last year. A working group was appointed by the FCC to recommend a replacement technology that would give consumers new options to buy their own set-top boxes to access not only their cable provider’s content, but also that of video streaming services such as Netflix, Hulu and Amazon Video. (This is called “over the top,” or OTT, programming.)

The coalition stepped into this void, championing the working group’s “competitive navigation device proposal,” which, to no one’s surprise, the cable industry opposed, preferring a “walled garden” system. The Video Choice coalition prefers a proposal that would enable users to search for cable, satellite and Internet programming from a single user menu, and would feature open source technology for third parties to manufacture the new devices.

In late January, coalition members were elated when FCC Chairman Tom Wheeler announced a proposal that would force pay-TV companies to make cable programming available to makers of third-party hardware or software—without a physical device such as the CableCARD. This would allow consumers to watch the TV channels they pay for on other devices without having to rent a cable box from the cable company.

FCC Chairman Wheeler has likened the hold cable companies have on viewers to the old days when consumers had to pay monthly telephone rental fees to the “Ma Bell” phone monopoly company, AT&T.

The FCC is now accepting public comments on its proposal to “unlock the box.” If implemented, the cable and satellite industry would have two years to open access up to competition. The Notice of Proposed Rulemaking (NPRM) is titled “Expanding Consumers’ Video Navigation Choices; Commercial Availability of Navigation Devices.” To read a summary of the proposal, click here.

Consumer Action also urges consumers to write to your elected officials in Congress to let them know you favor the FCC plan. Click here to send a message to Congress.

Web Bonus: New ways to watch collide with traditional pipelines

By Lauren Hall

Have you “cut the cord” to end your relationship with cable? Do you find that streaming Internet video (via Hulu, Netflix, HBO Go, etc.) offers you loads of stuff to watch at a much lower monthly cost? Then you are part of the avant-garde of TV viewers.

There are many reasons to love streaming video services. For example, you can “binge-watch” original programming like Netflix’s “House of Cards,” reruns of broadcast shows, and new, classic and foreign films when and where you want, on practically any Internet-enabled device.

Another plus is that the software-based provision of streaming video content allows for more friendly user interfaces. To watch more than one episode in a series on streaming, the transition to the next program is often seamless. Meanwhile, most of pay-TV’s “on demand” interfaces require viewers to navigate back to the entry and choose the next episode.

But many more people continue to pay for a cable or satellite subscription. Perhaps they don’t have robust Internet to support streaming, love pay-TV’s “on demand” features and broadcast programs, or want to watch their favorite sporting events in real time.

Pay-TV customers are a captive audience, and many of them balk at the monthly fees for equipment (receivers, DVRs, etc.) and closed systems they are forced to use. In the late ‘90s, Congress mandated that pay-TV companies devise a way that subscribers could purchase their own equipment to bring cable into their homes. The companies responded by offering a plug-in solution called a cableCARD, but it didn’t take off and most electronics manufacturers (except TiVo) were loath to build the ports into free-market set-top boxes. At the end of 2015, the requirement for cable to offer such access in third-party equipment was allowed to sunset.

Since cableCARDs were hard to get, difficult to make work and triggered a monthly fee on cable bills, the demise of the cableCARD requirement was largely unnoticed outside of the world of electronics manufacturers and consumer advocates. However, it’s likely that cable companies will continue to make and provide cableCARDs for existing equipment until a “cardless” Internet-based solution is developed.

To fill the void left now that cableCARD-ready equipment is no longer mandated, the Federal Communications Commission (FCC) recently released a proposal that would give makers of third-party set-top boxes the right to funnel pay-TV subscriptions digitally through their devices. Pay-TV providers dislike the idea, and have predicted a host of negative consequences, such as loss of subscriber privacy, higher prices and the facilitation of copyright piracy.

FCC Chairman Tom Wheeler proposed to require all cable and satellite companies to allow third-party makers of TVs, DVRs and other set-top boxes to allow subscribers to watch pay-TV content via those devices. Wheeler has said his proposal will “tear down anti-competitive barriers and pave the way for software, devices and other innovative solutions to compete with the set-top boxes that a majority of consumers must lease today.” Predictably, the cable industry is preparing to fight the proposal to “unlock” the lucrative cable box.

“Giving up control [of the rental cable box] might be in the best long-term interest of the cable and programming industries,” said consumer advocate John Bergmayer of Public Knowledge. “The wireless industry ended up growing, not shrinking, after it gave up micromanaging what features could be on mobile phones.”

One ongoing criticism of pay-TV is that it is sold in “bundles” of many channels, the vast majority of which consumers pay for but don’t watch. Consumer Action has long advocated for “skinny bundles” that allow pay-TV subscribers to get just the channels they want for a lower price. The cable and satellite TV industry has pushed back at this idea by saying that without the cross subsidization of popular and unpopular programming, popular channels would be extremely costly to watch.

Change is occurring rapidly. Perhaps for now, the best move for consumers is to watch how technology and market competition evolve in the months ahead.

About Consumer Action

Consumer Action is a non-profit 501(c)(3) organization that has championed the rights of underrepresented consumers nationwide since 1971. Throughout its history, the organization has dedicated its resources to promoting financial and consumer literacy and advocating for consumer rights in both the media and before lawmakers to promote economic justice for all. With the resources and infrastructure to reach millions of consumers, Consumer Action is one of the most recognized, effective and trusted consumer organizations in the nation.

Consumer education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of educational resources. The organization’s extensive library of free publications offers in-depth information on many topics related to personal money management, housing, insurance and privacy, while its hotline provides non-legal advice and referrals. At Consumer-Action.org, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database and nine topic-specific subsites. Consumer Action also publishes unbiased surveys of financial and consumer services that expose excessive prices and anti-consumer practices to help consumers make informed buying choices and elicit change from big business.

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of nearly 7,000 community-based organizations. Outreach services include training and free mailings of financial and consumer education materials in many languages, including English, Spanish, Chinese, Korean and Vietnamese. Consumer Action’s network is the largest and most diverse of its kind.

Advocacy. Consumer Action is deeply committed to ensuring that underrepresented consumers are represented in the national media and in front of lawmakers. The organization promotes pro-consumer policy, regulation and legislation by taking positions on dozens of bills at the state and national levels and submitting comments and testimony on a host of consumer protection issues. Additionally, its diverse staff provides the media with expert commentary on key consumer issues supported by solid data and victim testimony.

Downloads

Changing world of TV and video (Spring 2016)   (spring_2016_streaming.pdf)

 

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tv, television, streaming video


 
 

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