Obama hopes cable set-top box rule will usher in new era of competition

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 to be filed Friday with the Federal Communications Commission, the Obama administration will throw 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 won't stop there. He'll also sign 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.