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By John D. McKinnon 

Federal regulators Thursday delayed a vote on a proposal to overhaul the market for TV set-top boxes, dealing a setback to Federal Communications Commission Chairman Tom Wheeler on one of his top priorities for the year.

The delay, coming so close to a presidential election that will usher in a new administration, represents a major blow to the proposal. But FCC members pledged to keep trying, and there were indications an agreement remained possible, if less likely.

In a joint statement, Mr. Wheeler and fellow Democratic Commissioners Jessica Rosenworcel and Mignon Clyburn said they had made "tremendous progress" on the issue and are still working toward an agreement.

Mr. Wheeler's planned overhaul is aimed at opening up the market for set-top boxes, dominated for years by cable TV companies. He would require the companies to make their television feeds available as apps to other potential device manufacturers, such as Apple Inc. and Alphabet Inc.'s Google, as well as smart-TV makers.

Supporters say the plan could save consumers hundreds of dollars a year in rental fees. It also could give a boost to internet-based video alternatives to cable by allowing consumers to easily search and access both at once.

Cable TV companies, as well as media companies, have waged a major campaign to defeat the plan or scale it back significantly. Many of their objections have been narrow and technical. But often underlying those concerns has been a broad fear that Mr. Wheeler's proposal could disrupt their longstanding, lucrative pay-TV business model.

Worse for Mr. Wheeler, he has so far failed to win the support of Ms. Rosenworcel, a fellow Democrat. That made it impossible for him to secure a majority on the five-member FCC, given Republicans' opposition.

Some public-interest groups say a compromise can still be struck. But in practice, the delay could signal that approval will be held up until after the November election, when the transition to a new administration could further sap momentum for Mr. Wheeler's plan.

Several big industry players called for a more deliberate approach to the complex rule-making.

"We share the goal of providing consumers more options to access their video services without the need for a set-top box," said David Cohen, senior executive vice president of Comcast Corp. "But heavy-handed government regulation, based on questionable legal authority in a fast-moving marketplace, will stop the apps revolution dead in its tracks and delay consumer choice."

In effect, Thursday's standoff underscores the difficulty of merging the old cable-TV realm with the new online streaming world.

Cable companies worry about having to share their customers' subscription information and other data with other set-top box or device makers. They also object to the potential of new FCC oversight of their deals with media companies and the new device makers.

Media companies such as The Walt Disney Co., Time Warner Inc., CBS Corp. and 21st Century Fox Inc. also worry about the FCC's potential meddling in their deals, saying the commission lacks legal authority to force licensing terms.

Mr. Wheeler and his aides appeared to take several steps toward the media and cable firms in recent weeks by, for example, scaling back their plans for government oversight of licensing deals.

The FCC also has struggled to configure a standards-setting body for building the cable apps.

A leading congressional critic of the current set-top box market, Sen. Edward Markey (D., Mass.), said he was "extremely disappointed" by the delay.

"Consumers have waited for more than two decades for the promise of a robust set-top box marketplace to be fulfilled; they should not have to wait one more billing cycle," he said.

Write to John D. McKinnon at john.mckinnon@wsj.com

(END) Dow Jones Newswires

September 29, 2016 16:56 ET (20:56 GMT)

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