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Beyond the Cable Box: Here’s How Obama Wants to Stoke Competition

Cable Boxes of the Future

Cable boxes may not be very exciting, but they're emerging as a new battleground over the future of TV. Matt Rourke / AP file

The executive action President Obama signed on Friday aimed at getting government agencies to foster increased competition has the potential to go considerably beyond the FCC’s fight over cable set-top boxes that was cited by Council of Economic Advisers chairman Jason Furman in a blog post announcing the initiative.

Competition in industries as diverse as transportation, retail and financial services has decreased over the last two decades, according to a new report issued by the Council. It contends — and the White House agrees — that when fewer, larger companies get the lion’s share of the business in a particular sector, consumers wind up spending more for less efficient products, and innovation tends to fall by the wayside.

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“In many ways, the set-top box is the mascot for a new initiative we’re launching today,” Furman said in his blog post. It’s a well-understood example: People are annoyed at the prices cable companies charge to rent the boxes, and frustrated at the lack of alternative options and the inability to easily switch providers.

Get TV without the cable box 1:36

The FCC’s cable-box fight is a simple stand-in for more technical issues pertaining to things like drug patents or investing practices that take place far outside the living rooms of ordinary Americans, but could significantly impact their lives.

Diana Moss, president of the American Antitrust Institute, said one practice that could come under scrutiny is institutional investors holding stake in rival companies.

“With common ownership interest across major players in key industries … institutional investors are not going to encourage rivals to compete hard because they have an interest in all of them,” she said.

“Another area where I think people will pay attention is ... who owns, who has the property rights to data?” said Dennis Carlton, an economics professor at the Chicago Booth School of Business. Determining whether individuals, or so-called big data companies, own the right to a person’s data is an emerging question that could have implications for internet, software and marketing business.

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Aside from finance and technology, agencies involved in the medical field could also see a lot of activity, said Jay L. Levine, a partner at the law firm of Porter Wright. “Healthcare is always an easy target because it makes up so much of our GDP,” he said, heightening interest in reforms that could potentially lower costs and increase innovation.

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Levine said two areas that could receive increased scrutiny are patent applications, particularly for pharmaceuticals, and the FDA’s processes for approving drugs or medical devices.

“Patents that are somewhat designed to extend the patent life — those can be scrutinized more,” he said. “I would think about the FDA, whether their rules and governing procedures are allowing devices and products to come to market soon enough to challenge the incumbents.”

While the potential scope of President Obama’s directive is far-reaching, some experts also suggested that the declaration could be an election-year push to increase funding for regulatory oversight.

“To the extent that anti-trust is the proper tool to address harm to consumers, Obama needs to add to the funding of the agencies which for years were underfunded,” D. Daniel Sokol, professor at the University of Florida’s Levin College of Law, said in an email.

“I’d be interested in seeing whether there’s any follow-up on provisions or proposals to beef up the existing agencies to give them more resources,” Levine said.