FCC Seen Farther Away From Set-Top Rulemaking
The FCC is viewed as farther away from approving its proposed changes to the set-top box market in the wake of comments from Commissioner Jessica Rosenworcel that are seen to indicate interest in a pay-TV backed compromise offer, industry officials told us Monday. The FCC needs to find “another way forward” Rosenworcel told Reuters, in comments confirmed by her office. Rosenworcel was widely believed to be referring to the NCTA and AT&T backed compromise proposed at the FCC last week (see 1606160059). Pay-TV industry officials told us they see her comment as an indication that she won’t vote for the original proposal laid out in the NPRM.
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The FCC is seen as far away from a solution to criticisms of its set-top proposal from the content creation industry. Some smaller programmers have supported the FCC plan. Though industry officials had predicted the set-top item would be voted on at the commission’s August meeting, it's now expected to take longer, several pay-TV industry officials told us.
The original FCC proposal has “real flaws,” Rosenworcel said. “So I’m glad that efforts are underway to hash out alternatives to provide consumers with more choice and more competition at lower cost.” Rosenworcel's publicly pointing to alternate plans days after NCTA, AT&T and several programmers unveiled their compromise is seen as a strong signal she doesn’t want to vote for the current FCC draft, pay-TV industry officials told us. Rosenworcel’s office declined to comment. The flaws she mentioned are believed to refer to the concerns about copyright and diversity raised by the content industry and legislators, industry officials told us. Since Rosenworcel will need to be reconfirmed by the Senate, she's seen as being particularly sensitive to problems with the proposal raised by lawmakers, an opponent of the set-top proposal told us.
The pay-TV industry is reading too much into Rosenworcel’s comments, an industry official who supports the FCC plan told us. Her recent comments aren’t inconsistent with her past statements about the FCC proposal, the official said.
FCC Chairman Tom Wheeler said in a speech at the National Press Club Monday (see 1606200044) that he's pleased with the cable industry's proposal last week on rules for a competitive retail set-top market. "I think it's absolutely terrific that the cable industry came forward with this proposal," Wheeler said. "I have been asking them to do this. I think that by coming forward they indicated that a lot of the argument that has been put up against our set-top box Â… proposal really fell by the wayside.” Copyright and consumer privacy can be protected, Wheeler said. Small networks can continue to thrive, he said. “You don't have to rebuild the network.” Wheeler “is pleased the cable industry has come to the table and he is interested in having a constructive dialogue about the specifics of their proposal,” an FCC spokeswoman emailed us.
Though large programmers such as CBS and Viacom weren’t part of the group that offered up the pay-TV compromise to the FCC, they are seen as cautiously optimistic, industry officials told us. The compromise is “better than what [Chairman Tom] Wheeler offered us,” a content company official told us. The pay-TV proposal lacks specifics in some areas, and content companies are still weighing its permutations, the official told us.
The FCC is no longer seen as likely to put the set-top item on its August agenda, and that could be seen as a sign the commission regards the industry compromise offer as legitimate, a content industry official told us. The plan to rush the item out was likely based on an expectation that pay-TV officials wouldn’t come to the table, the content official said. Both supporters and opponents of the FCC proposal praised the compromise offer as a sign pay-TV companies are willing to negotiate.
The pay-TV proposal shows the two sides can agree on aspects of a set-top plan, an industry official who supports the FCC plan told us. Both versions include a universal search function and to allow third parties some access to multichannel video programming distributor content. The two proposals are further apart elsewhere, supporters of the FCC plan have told us. The pay-TV proposal "seems heavily tilted toward cable control," a supporter of the FCC plan told us. "Consumers should not have less choice and less functionality than they currently have available to them today using a Cable Card.”