President Obama is demanding better, cheaper versions of the cable boxes that millions of Americans use to browse their pay-TV channels, in hopes of enhancing competition.
The Obama administration pressed for changes to the cable box in a letter to federal regulators Thursday night, according to multiple people familiar with the matter who spoke on condition of anonymity because the filing is not yet public.
Obama's move effectively throws the full weight of his office behind the Federal Communications Commission, which has taken the lead role in trying to crack open the market for TV set-top boxes. Millions of Americans pay, on average, more than $200 a year to rent their boxes from a cable or satellite provider.
Greater competition, the administration said in a blog post Friday, will drive down prices and result in more innovative products.
"Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want — including their cable or satellite content, as well as online streaming apps — in one, easier-to-use gadget," wrote Jeff Zients and Jason Furman, two of Obama's top economic advisers.
In addition to supporting the FCC's proposal, the blog post highlights a connection between a lack of choice among "overpriced products" and the fate of the working class — a timely decision in light of a rising focus in the presidential primary on stagnant wages, labor unions and this week's continuing strike by roughly 40,000 Verizon employees.
The White House's push on set-top boxes is part of a wider effort aimed at spurring more aggressive federal action on competition policy. As part of Friday's announcement, Zients and Furman said Obama would be signing an executive order that requires agencies to take stock of the steps they could make to enhance competition in industry. The agencies will have two months to report back.
The move is likely to score populist points for Democrats in the upcoming election. The administration's blog post ties the stated lack of competition in set-top boxes together with low wages and the working class. And it raises the profile of set-top boxes just as the FCC is preparing to rewrite the rules.
"The president's support for set-top box competition virtually ensures that consumers will finally see a $15 billion-per-year rip-off exploded by new electronic devices streaming innovative video services that challenge cable monopolies," said Gene Kimmelman, chief executive of the consumer group Public Knowledge.
But it could also invite backlash among Republicans who have criticized Obama before for seemingly influencing the course of a regulatory proposal. Obama's last endorsement of a move by the FCC took place in the fall of 2014, when he strongly recommended the agency adopt a set of strict net neutrality rules that banned Internet providers from blocking or slowing consumers' Web content. FCC Chairman Tom Wheeler, who had been considering a softer legal approach to the task, changed course shortly thereafter. The industry cried foul, accusing Obama of improperly wielding his influence upon an independent agency, even though the FCC denied any wrongful coordination between it and the White House.
Cable industry officials oppose the FCC's plan on set-top boxes, arguing there are already ample amounts of innovation in the marketplace. They also have said the FCC’s proposal would disrupt their contractual relationships with the producers of cable programming.
"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 the National Cable and Telecommunications Association in a blog post. "To see the White House take political credit for the actions of the 'independent' agency and direct it to reach a specific conclusion even before the record has been assembled, shatters that faith and undermines the Commission’s credibility."
Wheeler did not seek an intervention by the White House on the set-top box issue, according to one person familiar with the matter who spoke on the condition of anonymity because the FCC's proceeding is still ongoing.
Furman told reporters Thursday that when it came to set-top boxes, Obama wished to express his own opinion, irrespective of the FCC.
"It seemed like a clear-cut case to get a win for consumers and get a win for innovation," he said. "There were a variety of different views, all pushing in different directions on this topic. We wanted to make his views known. This is something really tangible."
The FCC declined to comment.
David Nakamura contributed to this report.