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Goodbye, Cable Box — Hello, More Expensive Internet

The FCC wants to turn your cable box into an app, which may cost you

The good news is, within two years, you’ll no longer need to rent a set-top box from your cable company or satellite provider.

The bad news is, you already don’t have to rent a cable box, and the FCC’s way of getting rid of the box could mean an increase in your internet bill.

In a significant walk-back from previous proposals to “unlock the box,” FCC Chairman Tom Wheeler is proposing a rule that would require all pay TV companies to offer a free app to their customers that would give them the same experience as using a set-top box — within the next two years.

That means you would have the ability to record, fast-forward, rewind and access live programming at any time.

But it also means accessing all this programming via some kind of internet connection. And that’s where there might be a few problems. (You might want to imagine the following paragraphs in small print.)

By the FCC’s count, in 2015, 55 million Americans did not have access to broadband internet. If these consumers rely on their mobile data plans, they will likely hit or exceed their data limits regularly. That’s unless they get their mobile coverage from a TV provider that doesn’t count streaming TV toward a data plan.

The same goes for customers of companies like Comcast, which in certain markets are testing out a type of usage-based pricing, wherein the more data you use, the more you pay.

The result is the same: A higher bill.

The FCC responded to concerns about internet data caps — currently a hot-button issue that hasn’t been resolved — by saying the regulatory body would keep internet providers in line.

This method of distributing TV also requires massive amounts of bandwidth. As anyone who’s attempted to live stream a sports telecast can attest, the experience can be full of irritating buffering and stalling.

The fault may lie with your internet provider, or some long-haul data carrier, or the programmer distributing the content — Murphy’s Law can be triggered at myriad different points in the content delivery chain, and consumers seldom know who’s to blame.

Senior FCC officials held a call with reporters Thursday afternoon in which they downplayed the risk that an extreme shift in internet traffic could lead to sub-par streaming quality.

But network architect experts say the risk is still there.

Think about it this way: Traffic from Netflix streaming has already eaten the internet, with bandwidth at a premium at certain times in certain locales.

Now imagine double the number of Netflix users in the U.S. attempting to stream live TV at the same time. There are ways to mitigate this risk, and they could be ready in two years, but the current live streaming experience for most households is far from ideal.

Also: All of the major pay TV companies already offer some sort of app through which you can access your TV package. DirecTV, in fact, introduced an update to its own app on Wednesday that allows you to watch most of your shows on the go, without having to be on your home WiFi connection.

Some of these apps are currently limited to use on mobile devices or laptops, or not available on all connected devices.

Another stumbling block the FCC had to admit to: Satellite companies’ technology doesn’t work the same as that of companies like Comcast and Verizon FiOS, and so customers of providers like Dish and DirecTV might be stuck with a set-top box, because that’s the only way to get the programming to the customer and then to the app.

DirecTV and Dish account for just over 33 million pay TV households.

The new proposal raises the question of why the FCC is pushing for this regulation in the first place. “This is a solution in search of a problem,” Bruce Leichtman, president of research firm Leichtman Research Group, told TheWrap. “Minimal upside to consumers, with totally unknown downsides, at this point.”

Wheeler and the FCC are framing the proposed rule as a win for consumers. “But most of these options are already available to consumers,” Leichtman said. “There are now more connected devices in homes than set-top boxes anyway, and this could drive people back to set-top boxes, if the app experiences are really bad.” (The term “connected devices” covers products like smart TVs, Apple TVs, Roku boxes, and Amazon Fire TV boxes.)

“You have to wonder who this is really a win for,” Leichtman added.

Other than the FCC, that is.