Gregory Korte

USA TODAY

WASHINGTON — President Obama will weigh in on a controversy with big implications for cable customers — and, the White House says, the future of the American economy.

In comments filed Friday with the Federal Communications Commission, the Obama administration threw its support behind a proposed rule that would prohibit cable companies from requiring customers to rent their set-top boxes directly from their provider.

But Obama isn't stopping there. He also signed an executive order requiring federal agencies to adopt similar policies that will foster more competition, the White House said.

"Being pro-competition is more than just anti-trust," said Jason Furman, Obama's chief economic adviser, announcing what he said would be a whole-of-government effort. In a briefing paper, Furman argued that competition has declined over the last two decades as fewer companies take up a greater share of the market — with increased profits to show for it.

For Furman, the set-top box is the modern equivalent of the rotary phone — the mid-20th century staple of communication that was dictated largely by the local telephone company.

"The consumer experience wasn’t pretty. The phones had basic functionality. People had to pay to lease their phones —- and it got in the way of competition and choice," he said.

Once the FCC opened up the home phone to competition, consumers gained access to touch-tone phones, cordless models, built-in answering machines and other innovations.

"That may sound like ancient history to you, but that's the logic that animates what we’re doing now with set-top boxes," Furman said.

By a vote of 3-2 in February, the FCC moved forward with a proposal to do the same thing to the cable industry, where many companies require customers to rent the necessary equipment — at an average cost of $231 a year — from the cable company.

The proposed rule would require cable providers to provide a data stream with information on each program, allowing third-party cable box manufacturers to use that data to help customers navigate and record programs.

In the administration's comments to the FCC, Assistant Secretary of Commerce Lawrence Strickling said cable and satellite companies "deserve credit for expanding the ways in which their subscribers can access the video programming they purchase. (But the fact remains that those subscribers still typically have limited competitive choice in the ways that they may access or navigate programming or integrate complementary features and services."

Let TV viewers buy cable boxes: Our view

Cable and telecommunications companies oppose the new rule, saying mandating the disruptive technology would come at the cost of consumer privacy.



Don’t let FCC derail TV progress: Opposing view

The FCC is an independent federal commission, and the president can't dictate its policies. But that doesn't prevent Obama from giving an opinion, and he's done so previously on cell phone number portability and the open Internet policy known as "net neutrality."

"It’s something we do sparingly, and when the president personally gets involved it’s something that is truly important in his mind to consumers, to competition and the economy," Furman said.

But the cable industry said Obama's intervention was inappropriate.

"We are disappointed that White House political advisers are choosing to inject politics and inflammatory rhetoric into a regulatory proceeding by what is supposed to be an independent agency," said Michael Powell, a former FCC commissioner and president of the National Cable & Telecommunications Association, an industry lobbying group.

He noted that many of the companies that have the most to gain from the proposed rule — Apple, Amazon, Google, Netflix — are often involved in White House initiatives, and already have access to consumers' televisions with or without cable companies.