NCTA's Powell, MPAA's Fried Criticize FCC Set-top Proposal
The FCC proposal to require pay-TV carriers to share their content stream with third-party set-top box makers is unnecessary and would open up programmers, pay-TV carriers and consumers to security threats, said MPAA Senior Vice President-Government and Regulatory Affairs Neil Fried and NCTA President Michael Powell during a demonstration and news briefing Wednesday. “The market is already solving the problem,” Powell said of the apps-based approach favored by pay-TV companies. Multichannel video programming distributors are working toward eliminating set-tops entirely and replacing them with apps, Powell said.
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NCTA’s “continued rhetoric” that the market is moving toward an apps-only approach is "rooted in a false choice,” emailed Public Knowledge Government Affairs Associate Counsel Kate Forscey. “The set-top debate is not about apps vs. devices; it is about opened versus closed markets.” NCTA’s preferred approach “allows only one competitive option: cable-approved apps,” Forscey said. “That avenue only further consolidates cable’s current stranglehold over consumers.” The FCC’s proposal is “the most inclusive, providing the broadest range of options for consumers to choose how they experience the programming they pay for,” Forscey said. The agency didn't comment.
Powell showed reporters a mock-up of what a third-party device would look like, showing a screen with the words “All-Vid” across the top, its letters individually colored in the bright Google coloring scheme. Using the mock-up, Powell showed examples of what he said are potential problems with the FCC’s plan, such as links to content on pay-TV carriers appearing beside links to content on the torrent site The Pirate Bay, and a recommendation for an adult film called Passionate Co-eds in response to a search for religious film The Passion of the Christ. Though FCC Chairman Tom Wheeler has said third-party set-top makers would be required to abide by the same privacy and neighborhooding restrictions as the MVPDs providing the content, Powell said that’s not backed up in the NPRM. Nothing in the NPRM would prevent third-party carriers from running Viagra ads over religious content or placing Disney content next to adult content, Powell said.
The set-top proposal doesn't interfere with arrangements between programmers and advertisers, an FCC spokeswoman told us. "Manufacturers of competitive solutions will be required to pass through all of the content the [consumer] is entitled to receive, including ads," she said. The NPRM asks numerous questions about ensuring content isn't disrupted and how to mitigate concerns about ad overlays or ads being removed. The NPRM tentatively says that it's not necessary for the data sent to third-party box makers to include descriptive info about embedded ads, the spokeswoman pointed out. "If a third-party device does not receive the descriptive data about embedded advertising, the device will have a very difficult time cutting out and replacing ads," she said.
Existing app technology already is able to accomplish many of the FCC’s goals for the set-top proceeding with apps, such as placing over-the-top content alongside MVPD content on a third-party device, Powell said, showing reporters a Time Warner Cable app next to a Netflix app in the user interface of a Roku. He also demonstrated that Roku and TiVo boxes already display over-the-top content and MVPD content side-by-side in search results.
Giving third-party box makers a universal key to all MVPD content means the security encrypting that content will have “a single point of failure,” Powell said. Congress has said in law that the FCC can't weaken pay-TV security in an effort to establish a retail set-top market, Powell said.
“This has been portrayed as a fight over set-top box revenue, but we don’t get set-top box revenue,” Fried said of programmers. The “answer” to FCC concerns about MVPD set-top leasing “can’t be to use our content as bait to solve that problem,” Fried said. “Ordinarily, if someone wants to use our content, they have to ask our permission.”