FCC Set-Top NPRM Will 'Compromise' Copyright Laws, Says NCTA Chief Powell

MVPDs are concerned about the NPRM's effects on consumer privacy and advertising, plus licensing and copyright of their content and proprietary user interfaces, Powell said. Requiring MVPDs to enforce copyright protections by taking Google and other possible new entrants into the set-top market to court would be an “inadequate remedy,” Powell said. The FCC is to vote on the NPRM at its meeting Thursday. Agency officials say that what the NPRM seeks in untying set-tops from the MVPDs that mostly provide them to consumers would not alter copyright (see 1602100039).

MVPD industry officials and content company executives characterized the set-top NPRM as a way for tech companies like Google to make an end run around licensing fees, and to sell ads on content they haven't paid for. During Tuesday's call, TV One Chairman and Future of TV Coalition head Alfred Liggins said a third-party set-top could stick pre-roll ads in front of or after content a consumer is watching, or “wrap” the content in Google style banner ads.

The DMCA and other copyright laws would be a barrier to that, said Jonathan Band, a copyright attorney for Policy Bandwidth, in an interview. The DMCA prevents unauthorized copying or altering of copyrighted works, and tampering with the content stream of HBO or another programmer to insert ads could be seen as violating those rules, Band said. Tampering with a telecast to slap a banner ad over it would likely be seen as a “derivative work” entitling programmers to damages or fees from such an ad, Band said. Channel placement is an extremely important part of the licensing agreements between MVPDs and programmers, said BakerHostetler cable attorney Gary Lutzker, who negotiates such agreements, in an interview.

No company has been more aggressive at claiming that fair use rights trump copyright laws than Google, Powell told us. In past Google projects on books and music, Google has said fair-use protections allow it to “disassemble and rearrange” content, Powell said. Forcing MVPDs to take legal action against individual infringers or the FCC to protect their rights undoes what Congress intended when it created the DMCA, Powell said. Google and TiVo didn't comment. Channel placement is an extremely important part of the licensing agreements between MVPDs and programmers, said BakerHostetler cable attorney Gary Lutzker, who negotiates such agreements, in an interview.

TiVo passes though content and applies its own user interface to it, but doesn’t alter channel placement or copy entitlement or other aspects of the service, one industry proponent of the FCC plan said. TiVo does so under agreements that bind it not to interfere with MVPDs' signals, said a recent TiVo FCC filing. Though those agreements don’t specifically bar TiVo from altering channel placement and other aspects of MVPD service, it hasn’t done so, a consumer electronics official told us. Powell said there's evidence TiVo has inserted ads on top of MVPD content.

The FCC is "committed to ensuring the protection of content creators copyright,” said an agency spokesman in an emailed response to Powell's comments. The FCC won't interfere with agreements between MVPDs and content companies or MVPDs and consumers, the spokesman said. The FCC also denied that the set-top NPRM favors Google.

“The proposal doesn't favor one company; it favors giving consumers choice," the spokesman said. The NPRM will create a framework for “any innovator device manufacturer and app developer” to develop new video programming technology, he said.

Though the FCC has said the proposals in the NPRM won’t affect MVPD contracts with programmers, a content company executive told us that’s not possible. “How can a third party take our content and do whatever they want with it and have it not affect our rights?” the executive asked. The FCC’s plan would require programmers and MVPDs to abide by their contracts with each other but also require them to share content with third parties outside that framework, the executive said.

“Set-top box manufacturers don’t license content,” said Public Knowledge Senior Staff Attorney John Bergmayer in response to the content company arguments. Since Cisco and other box makers pass through MVPD content without copyright licenses, the third-party manufacturers that take advantage of the proposals in the FCC NPRM also wouldn’t have to do so, Bergmayer said in an interview.

If the FCC proposals become rules, MVPDs wouldn't have to wait for their licensing or content agreements to be violated to bring a court challenge to the rules, said Fletcher Heald copyright attorney Kevin Goldberg. MVPDs would be able to seek an injunction if they could show that the set-top rules posed an “irreparable harm” he said.

If existing rules work, there's no need for the FCC proposal, the programming executive said. Instead of third parties that operate under the same system as TiVo, the FCC proposals would allow a new class of set-top manufacturers to chop up the content -- it would create a wholly different system, the programmer told us. “It’s not a one-to-one replacement” for the current dynamic, the executive said.

MVPDs aren't just concerned about their content and their user interfaces, they're also worried about data gathering, Powell said. Gathering and selling data is a major part of Google's business, and it doesn't have to abide by the same laws against sharing that data that cable companies do, Powell said. Part of the reason for the opposition to the app model favored by MVPDs is because Google and other companies can't collect consumer data from individual companies' proprietary apps, Powell said. If Google had a set-top, it could collect more data on a customer's viewing habits to add to the data it already gathers on a person's search history, providing a much more attractive package for advertisers, Liggins said.

AT&T also expressed concerns about the proposed rule changes' effects on privacy, in a blog post Tuesday. Cable and satellite have tougher privacy rules that wouldn't apply to set-top makers, the pay-TV provider said. FTC and other federal privacy laws aren't as stringent, AT&T said.