Stakeholders Weigh In on Set-Top Decision

FCC Vote Prompts Flood of Input 2/18/2016 1:45 PM Eastern

The FCC's vote to "unlock" cable set-tops drew a flurry of reaction from interested parties.

Get complete coverage of the FCC's set-top proposal.


WASHINGTON — Industry observers following the Federal Communications Commission’s just-approved Notice of Proposed Rulemaking on "unlocking" set-top boxes were quick to weigh in.


The vote — a 3-2, party line affair — when the statements, some clearly prepared in of advance understanding the probable breakdown of votes, started to pour in. The FCC is providing 60 days for comment and replies, starting when the item is released, perhaps as early as today (Feb. 18), but stakeholders were hardly waiting for that bureaucratic starting gun.


“Today, an FCC divided along partisan lines adopted an unbalanced notice seemingly predestined to lead to a new, anti-consumer government technology mandate on video set-top boxes,” blogged Comcast senior executive vice president David Cohen.


"The FCC’s action is disappointing — but not because the commission voted to consider how to increase consumer choice in retail devices. That's a worthy goal that we support as well. The commission’s divided action is flawed because it ignores the FCC’s own technical advisory committee report and instead puts the Commission’s thumb on the scale by endorsing a government-mandated technology solution.  The right way to proceed would have been to issue a balanced rulemaking Notice and develop an appropriate record to make a rational judgment.  


“We welcome a thorough vetting of the FCC’s flawed AllVid proposal through the agency process," said the Future of TV Coalition, comprising cable operators, studios and others.


“Today’s television and video marketplace offers audiences more choices than ever, with an explosion of innovative services, devices, and content. In short, creativity and innovation are thriving … The massive outpouring of opposition to this costly and destructive rule from members of congress, the creative community, TV distributors, and public advocates reflects a basic truth: [T]he rules under consideration will drive up consumer costs, hurt programmers (and most especially small and diversity programming), and blow a gaping hole in Congressional protections for our TV privacy — all for an unnecessary government giveaway to Big Tech. In short, this rule does not make sense.


"We believe that once the commissioners review a full record reflecting these harms, they will determine that this kind of technology mandate is both destructive and wholly unnecessary."


While Democratic FCC member Jessica Rosenworcel supported the item, even she said it was not clear whether it would wind up being the correct path, but that "something needs to give."


AT&T, a member of the coalition, was equally unhappy, focusing on what might have been if the FCC had focused on what it suggested was the already-moving market for devices.


“A visionary might have started a proceeding today to ask how the consumer driven application economy could accelerate placing the set-top box onto the same path to the technology scrap heap as black-and-white televisions, Betamaxes, VCRs, iPods and Razr phones," AT&T senior vice president, federal regulatory, Bob Quinn said. "The focus of that proceeding could have been how to eliminate the set-top box while protecting content creators’ incentives to develop interesting programming, building upon and growing the base of minority programming which exists today, and ensuring that what consumers watch on television remains none of Google’s business.  Instead, the FCC launched a proceeding that could cement the set-top box in your home, with little to no minority programming, collecting data on every program you watch to feed Google’s advertising engine.


“As an added bonus, the FCC will have to establish an enormous regulatory infrastructure to create and oversee this new technology mandate that involves the creation of new technology standards and standards bodies."


“Talk about a missed opportunity. While consumers are embracing an apps-based approach that offers a variety of content on more than 450 devices, the FCC has chosen to go down a path that threatens the very competition and innovation that has led to this vibrant marketplace."


Quinn took a shot at Google, which was a big backer of the set-top proposal. "As this proceeding continues," he said, "we hope these concerns are given the weight they deserve and the Commission allows consumers and not Google to continue to drive the market.”


"If the FCC moves forward with new rules, ACA is very troubled that smaller operators and their customers will be significantly burdened because these providers are hardly in position to absorb the cost of deploying new equipment to all customers, which is the likely outgrowth of this rulemaking - a painful lesson they learned from the FCC's costly implementation of the flawed CableCARD experiment," said Matt Polka, president of the American Cable Association, which represents small and medium sized telecoms. "To impose new costs on smaller operators that are already suffering badly from escalating retransmission consent and programming costs is misguided, and will surely cause unintended consequences for many consumers."


Consumers Union and others were praising the FCC's "unlocking" mechanism.


“For too long, pay TV customers have had to shell out money month after month to lease these boxes, on top of the ever-increasing price of service," the group said in a statement. "It’s time to untether the consumer from that clunky, old box. This vote is an important step toward tearing down barriers that have limited competition and innovation in this market. We will keep working with the FCC to help develop a strong, practical set of standards that will better serve consumers.”


“Too many individuals and families subscribing to cable TV today pay hundreds of extra dollars every year to rent set-top boxes from their cable companies," Free Press policy director Matt Wood said. "Collectively, this means billions of dollars a year in revenues for cable providers — and billions of dollars lost by consumers who should have cheaper options to buy these boxes instead of renting them at exorbitant rates.


“Beyond hitting Americans hard in their wallets, the cable industry’s stranglehold on the devices we use to access video programming hurts diverse content creators. For too long the cable dial has been off limits to all but a tiny handful of independent producers. Thanks to today’s vote, programming produced by women, people of color, non-English speakers and a broader range of diverse audiences has a far better shot at being seen and heard online.


“Unlocking the cable box will give these producers greater access to TV screens and mass audiences by letting viewers seamlessly choose between pay-TV and online viewing choices on a single screen."


Computer companies were among those applauding the FCC.


“We welcome this important step by the FCC and look forward to working with the Commission to ensure that consumers benefit from a more competitive set-top box market," said Computer & Communications Industry Association President Ed Black. "This rulemaking is all about promoting consumer choice and innovation. While the rest of the consumer electronics marketplace has flourished over the two decades since Congress directed the FCC to open up the set-top box market to competition, the cable industry has retained its iron grip on the cable box to the detriment of consumers."


Sen. Ed Markey (D-Mass.), who was co-author of the congressional mandate that the FCC promote competitive navigation devices and a big fan of the proposal, was understandably pleased.


“For more than two decades, the cable industry has sought to control all consumer video interfaces, leaving Americans with no choice but to lease their box from their television provider. The results have been bloated rental fees, little choice and nearly non-existent competition in the video box marketplace. The FCC’s new framework for innovators and companies to develop new technologies that allow consumers to access video programming without having to rent a box from their pay-TV provider is smart, fair and a long time in coming. The FCC’s action will help ensure that consumers are not captive to high video box leasing fees forever.


“With today’s announcement on set-top boxes, FCC stands for Furthering Competition and Choice. I commend FCC Chairman Tom Wheeler for his leadership and efforts to fulfill the promise to American consumers in the 1996 Telecommunications Act of a competitive and robust video box market.”


Markey was joined by arguably the other most unalloyed fan of the FCC move, House Communications Subcommittee ranking member Anna Eshoo (D-Calif.). “The old Ma Bell model was rejected decades ago,” she said. “Today's FCC decision will create a smarter, cheaper and more innovative future for consumers. ‘Alleluia!’ ”


Box maker TiVo was among the fans.


“Given the sunset of the integration ban and the absence of an industry-supported successor to CableCARD, the FCC’s rulemaking is important to ensure choice for consumers, operators, and content creators,” said Matt Zinn, TiVo Senior VP, general counsel and chief privacy officer. “We are hopeful that this proceeding results in a competitive environment that increases choice, both for consumers and operators, and protects the business models that operators and device makers have created under the current CableCARD system.”


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