Set-Top Draft Seen Circulating This Week, Includes FCC Oversight of Content Licenses

The draft plan includes concepts from the multichannel video programming distributors' apps proposal, but industry is expected to push back against the licensing program, since it would involve the FCC in contracts between MVPDs and programmers, several industry officials told us. The item would allow MVPD content to remain in MVPD apps, but industry is concerned the licensing system would raise the same copyright concerns that have been the focus of criticism against the set-top NPRM, pay-TV and content industry officials told us. “Mandating a royalty-free compulsory license across all devices and platforms would interfere with the rights of programmers and content owners to control how their original copyrighted content is distributed, and infringe the same copyright interests as have been highlighted in the recent Copyright Office letter,” NCTA said in an ex parte filing Tuesday. CO had expressed copyright concerns on the original FCC plan.

Some aspects of the draft item may still be in flux, but industry officials told us it involves a licensing body creating a standard license for MVPD content. The draft item would require that the license include specific terms, and the FCC would have the power to block any aspects of the license it deemed anticompetitive, industry officials told us. The licenses also would be put out for public comment under the draft, industry officials said. The terms of the license would be enforced by the licensing body, they said. MVPDs would be required to provide an app for any third-party device manufacturer with a license, and the service offered by the apps would have to be on par with those offered on MVPDs' own devices, and include DVR functionality, industry officials said.

The draft item is expected to include a minimum size for third parties that would qualify for a license, an exemption for smaller pay-TV providers, and a delayed adoption for mid-size providers, industry officials said. The MVPD app proposal would have required third-party manufacturers to use HTML5 apps, but the draft set-top plan would allow non-HTML5 apps as well, said industry officials and ex parte filings. The FCC didn't comment.

A set-top plan that includes a central licensing body is “unnecessary and unworkable,” exceeds FCC authority and hasn't been presaged by sufficient notice, NCTA, AT&T/DirecTV, Cox, Comcast and Charter Communications said in a meeting with FCC Chief Technologist Scott Jordan and aides to Chairman Tom Wheeler Thursday, according to an ex parte filing. The licensing approach suggested by the FCC doesn't reflect the way programming contracts are negotiated in the market and could slow innovation because changes to the licenses to reflect technology changes would have to go through the FCC and the licensing body, NCTA and the MVPDs said: “Giving the Commission discretion to modify license terms and seeking public comment on the license would only underscore further the lack of recognition of the copyright issues.” The MVPDs also took issue with a requirement they provide apps in formats other than HTML5. “The notion that MVPDs can easily develop apps for every new non-HTML5 platform ignores the substantial costs and efforts that MVPDs would have to incur and undertake in app development, integration work, and ongoing support,” the filing said.

Several programmers met with FCC officials in recent weeks and filed ex partes attacking the idea of the agency involving itself in contract terms. Last week, NAB made similar points (see 1609020032): “NAB cannot support any order where the Commission creates an ongoing ability to review or modify broadcaster contracts through the licensing process.”