FCC Chairman Tom Wheeler has issued proposed set-top box rules that aim to bring more choice to the video market and reducing the need for consumers to rent out devices from MVPDs.
The proposal, billed as “simplified consumer-first, app-driven” rules and one that seemingly favors the approach preferred by cable operators, telco TV providers and satelite TV providers, will be voted on by the commission at its next open meeting, set for Thursday, Sept. 29.
In a fact sheet outlining the details of the proposal, the rules, if adopted, will give the largest U.S. pay TV providers, serving 95% of the nation’s pay TV subs, two years to come into compliance.
More specifically, large providers will have two years to comply, while medium-sized MVPDs will get an additional two years. Smaller operators (those with fewer than 400,000 subs), will not be forced to comply, but can provide apps and software “as appropriate for their business.”
According to the proposal, the rules will require pay TV to offer consumers a free app, controlled by the MVPD, to access all the programming they pay for on a variety of devices, including tablets, smartphones, gaming systems, streaming devices or smart TVs. That, in turn, will mean consumers are no longer required to rent boxes from their provider. Notably, the proposed rules do not address data caps.
Pay TV providers are also required to provide their apps to widely deployed platforms, such as Roku, iOS, Windows and Android. FCC officials said the definition of widely deployed means operating system that has had shipments in the U.S. of at least 5 million devices during the previous year.
The rules also call on MVPDs to support integrated search for linear and VOD, alongside other video services accessible on the device, such as OTT offerings. Pay TV providers would also be barred from discriminating search results or promoting the pay-TV app over other sources of programming in the search function.
MVPDs must also provide consumers with “an equivalent ability to access content via the pay-TV app as they have in the set-top box.” Because the aim is to replicate all elements of a pay TV provider’s service on qualified retail devices, the apps must also comply with existing consumer protections such as emergency alerting, privacy and accessibility functions.
One potential snag with the FCC’s proposal is that MVPDs don’t have digital rights for all programming, making it difficult to replicate the full pay TV service on an app. FCC officials said the proposal requires that MVPDs treat programmers the same on a set-top as they do on apps, believing that the rules will spur the two sides to come together to do deals that bring unify the rights for set-tops and apps. Given that the largest MVPDs have two years to comply, "they have plenty of time to do that outreach,” FCC officials said.
To address copyright and carriage contract concerns, the proposed rules require that pay TV content will only be opened by the pay TV app using the “robust security protocols already built in to pay-TV apps.” Additionally, programming will continue to be controlled by the pay-TV provider from end-to-end, protecting content and maintaining all contracts and agreements currently in place, the proposed rules say.
The pay-TV’s software will also manage the full suite of linear and on-demand programming licensed by the pay-TV provider, and the existing distribution deals and licensing terms between MVPDs and programmers will be unchanged.
The FCC’s proposal also will pave the way for a “standard license” that governs this process for placing an app or device on a platform, with programmers having a “seat at the table to ensure that content remains protected.” The FCC will “serve as a backstop” to keep tabs on the process to that nothing in the standard license “will harm the marketplace” for competitive video devices.
The rules also aim to be “technology-neutral,” meaning they won’t mandate a specific standard for app development, though MVPDs must make apps for devices that meet the “widely deployed” threshold in the rules.
According to FCC officials, the licensing body will create a standard license that “governs the rules of the road” for any device or platform that wants access the MVPD apps. However, the FCC does propose, down the line, to retain some oversight over the licensing bodies.
That’s because “[W]e learned our lesson in CableCARD,” officials said, holding that cable operators were able to “manipulate the licensing process” and tamp down true competition for devices.
FCC Officials: Apps Approach Will Meet Goals
FCC officials were also asked why Wheeler went with an apps-based approach and seemingly abandoned an alternative idea that identified three “core information streams” (service discovery, entitlements and the video programming itself) that would need to pass from MVPDs to the device maker. Cable operators, telcos and satellite TV providers favored the apps angle, while many CE-focused companies, including Google, wanted rules based on the three-stream proposal.
FCC officials said that the original NPRM sought comment on a number of alternatives, which were vetted by the Downloadable Security Technical Advisory Committee (DSTAC) and presented to the FCC last fall, and found that the MVPD-controlled apps approach was aligned with the goals of the initiative, and made those goals easier to achieve than the alternative, and vehemently disagreed with the notion that the current proposal represents a “significant retreat” from the three-stream idea.
What About Satellite?
FCC officials also recognized that satellite TV providers, which don’t have inherent two-way connectivity into the home, have a “unique architecture” and that, in order to comply with the rules, will likely need to deploy and maintain one box – and only one box – inside the customer’s home that can talk to retail video devices.
But the proposed rules likewise leave it up to the MVPD how they deploy an architecture that fits within the scope of the rules. The proposal doesn’t dictate one technical approach over another to support apps, and provides enough flexibly in cases where in-home equipment is required, FCC officials explained.