Telecoms Poised For Another FCC Battle

Just months after the Federal Communications Commission delivered a significant blow to U.S. telecoms by passing new net neutrality rules, the organization is again working on a proposal that could stifle the industry's bottom line.

The FCC is expected to propose new rules that regulate how television set-top boxes are sold, which could cut down on some firms' profits.

Another Blow To Telecoms

Telecoms like Comcast Corporation (NASDAQ: CMCSA) generate a great deal of revenue by forcing their customers to rent their set-top boxes in order to gain access to a variety of channels. However, consumer advocate groups say that the prices cable companies are charging for the boxes are inflated, and that introducing more competition would help keep prices fair.

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Battle Brewing

FCC Chairman Tom Wheeler agrees with these concerns, and is expected to release a proposal in the coming days that will force telecoms to give customers a choice when it comes to their set-top box provider. Telecoms are likely to resist the idea, and the situation could closely mirror the battle that took place over the FCC's net neutrality rules.

Some Beneficiaries

Not all industry participants are against the plan. Companies like TiVo Inc. (NASDAQ: TIVO) and Google parent Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) are likely to cheer the new rules, as they would allow them to further their plans for alternate set-top boxes.

Currently, customers who rent their boxes from their cable providers are viewing programming skewed toward what the operator is offering, but if consumers could choose from a variety of different boxes, it may change the offerings that customers receive.

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