FCC Moving Forward With Downloadable Security Rulemaking, Pleasing Tech, Angering Pay TV

The proposals in the NPRM will "tear down the barriers that currently prevent innovators from developing new ways for consumers to access and enjoy their favorite shows," said FCC Chairman Tom Wheeler in a commentary on Re/Code Wednesday. But those sorts of proposals "force" multichannel video programming distributors and programmers to "dismantle" their services for third parties to use, said the newly minted Future of TV Coalition in a news release Wednesday. The group includes the American Cable Association, AT&T, Dish Network, MPAA, NCTA and numerous other entities. "Nothing in this proposal changes a company's ability to package and price its programming to its subscribers," said Wheeler.

The NPRM would identify three streams of information that must pass from MVPDs to third-party devices and apps, said an FCC release. The service discovery stream is information about what content is available to the consumer, such as channel listings. The entitlement stream contains info about what a customer is allowed to do with content, such as record it. The content delivery stream is the programming itself. These streams of information would have to be made available to third-party device makers through specifications decided by an independent standards body, the release said. The proposal wouldn't require a certain security system but would require MPVDs to offer "at least one content protection system that is openly licensed on reasonable and non-discriminatory terms," the release said. The proposals wouldn't affect current MVPD content and licensing deals, it said.

Though the text of the NPRM hasn't yet been released, MVPD officials told us based on the information available so far that the FCC's plan appears to be substantially derived from the DSTAC proposals backed by the Consumer Video Choice Coalition. CVCC includes Google, Public Knowledge and TiVo, its website said. Those proposals were strongly opposed by MVPDs and affiliated groups throughout the DSTAC process.

Though the FCC's announcement acknowledged several longstanding MVPD arguments that allowing third-party retail devices to access MVPD content streams could threaten security, consumer privacy and licensing obligations, the FCC plan is light on specifics, the MVPD officials said. "The FCC proposals have an aspirational focus," said former cable lawyer/consultant Steve Effros, who now works for downloadable security company Beyond Broadband Technology. "There's no way to do what they want to do," Effros said. Though the FCC proposal doesn't mandate a specific technology to accomplish its goals, it also doesn't explain what technology could be used to accomplish them, Effros said. Since some third-party devices already are allowed on MVPD networks, and opening the market to a wider variety of software shouldn't change things, an FCC official told us.

The FCC proposal doesn't precisely conform to the CVCC-backed DSTAC proposals, said Public Knowledge Senior Staff Attorney John Bergmayer in an interview. Though the CVCC had suggested precisely what technology could be used to accomplish its goals, the FCC proposal leaves the specific technology open. Despite that difference, Bergmayer said the CVCC and its members are very happy that the commission is moving forward with a rulemaking. MVPDs had argued that Congress never intended the DSTAC to lead to a change in set-top box rules. Both Sen. Ed Markey, D-Mass., and Rep. Anna Eshoo, D-Calif., issued statements Wednesday supporting the FCC's proposals. "The FCC's proposal has the potential to unlock the TV set-top box market, giving consumers relief and paving the way for cheaper, alternative choices," Eshoo said.

MVPD industry officials pointed out that previous FCC proceedings connected with the set-top industry have taken a very long time. Though Wheeler's time in office is perceived as getting short, officials on both sides of the issue said they believed Wheeler has the time to get a proceeding from the DSTAC done. Wednesday's NPRM announcement is seen as an indication that he has the votes to do so, officials told us. The matter could end up in the courts, as NCTA and other entities repeatedly have said the FCC doesn't have the jurisdiction to require MVPDs to share their user interfaces and channel guides with third-party device manufacturers, some noted.

Existing set-top rules lock third-party manufacturers out of the market, said the Computer and Communications Industry Association in a statement in support of the FCC proposal. The impact of the FCC proposal on the set-top box market could be "enormous," said CCIA, with members according to its website including Amazon, eBay, Facebook, Google, Microsoft, Netflix, Pandora, Sprint and Yahoo. The Free State Foundation panned the FCC plan, saying the agency must have "to bury its head in the sand" not to think MVPDs already face enough competition. By relying on a standards body to address all the MVPD complaints about the rule, the FCC is "kicking the can down the road," said the Future of TV Coalition in its second-ever news release. "This is a solution in search of a problem." The FCC proposal will allow consumers access to a more diverse range of content, said the Writer's Guild of America, West. The FCC is replacing "app innovation with government regulation," said NCTA in a blog post.