NCTA, AT&T: FCC Set-Top Plan Can't Be Tweaked Into Shape

Cite litany of issues with chairman's proposal

NCTA-The Internet & Television Association, and AT&T have teamed up to tell the FCC just what they think of Chairman Tom Wheeler's "apps-based" alternative to his initial "unlock the box" set-top proposal, and the review does not have many stars.

They argue that while it is billed as app-based and copyright-respectful, the reality is much different In a filing with the commission, NCTA and AT&T said the proposal suffers from legal flaws and undermines MVPD service, as did the chairman's original proposal, they say.

While NCTA and AT&T encouraged the FCC to adopt an apps-based alternative, this is clearly not what they had in mind.

In the letter, they said the chairman's proposal would 1) impose "extraordinary limits on how MVPDs can deliver their service, limits no put on the their competitors; 2) "create new barriers to innovation and defeat key attributes of apps" by forcing them to comply with an as-yet-determined standard; 3) prevent new features on set-tops unless they were

replicable on all app platforms; require a government sign-off on any variation an app license; 4) create privacy issues by requiring making data available to third parties that raise unbundling issues as well; 5) make the FCC the arbiter of contract terms; 6) prevent programmers and MVPDs from enforcing copyrights and privacy and more; 7) regulate not only

new apps, but ones already in the marketplace, including TV Everywhere services; 8) impose a "perpetual burden" on MVPDs to build and maintain apps. NCTA's proposed app would also have been free, but NCTA and AT&T say the FCC's app "burden" has no mechanism for MVPDs to even recover the cost, leading to "increased prices for all subscribers."

FCC Chairman Tom Wheeler told Congress last week the item is 90% there, said he was willing to tweak it to address concerns--though he said the FCC was not creating a new compulsory license or setting itself up as a copyright overseer--but that he still planned a Sept. 29 vote, which would come despite a drumbeat of pushback on the proposal by Hill Democrats and Republicans, unions, programmers, and MVPDs.

But NCTA and AT&T signaled they didn't think it was salvageable with mere adjustments.

"The Commission cannot avoid the serious flaws with the Chairman’s new proposal simply by tweaking or removing only parts of it," they said.

One thought was that the FCC could perhaps vote on the basics of the app proposal, but separate out the proposed app licensing body and hammer that out down the line.

But they said that "even if the licensing body requirements are retracted, as they certainly should be, unless the Commission also removes the entitlement data and parity mandates and the other flaws discussed herein, the new proposal cannot be sustained as a matter of law or sound public policy."