8th Floor in Talks on Draft Set-Top Licensing Changes
Eighth-floor officials are in talks over possible changes to the FCC draft set-top order, agency and industry officials said in interviews. Those negotiations are believed to center on the licensing aspects of the set-top plan called problematic by programmers, legislators and Commissioner Jessica Rosenworcel, who's seen as the key vote required for Chairman Tom Wheeler to get the plan approved. There's no appetite in Wheeler's office to remove the item from the Sept. 29 commissioner meeting agenda, industry officials said.
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Efforts to make the order palatable to Rosenworcel have to move fast, and numerous stakeholders have visited and written the FCC before Thursday's sunshine restriction on lobbying, according to industry officials and electronic filings. “It’s clear Tom Wheeler wants to push it through, hell or high water,” said Phoenix Center President Larry Spiwak.
Rosenworcel described FCC oversight of the set-top licensing plan as her “one concern” with the set-top draft item at a Senate oversight hearing last week (see 1609150045). Industry officials see that as the likely focus of negotiations. Eighth-floor officials are in discussion about altering the provisions of the draft order that allow the FCC to reject or approve specific terms of the licenses between multichannel video programing distributors and third-party device makers, an industry official told us. Altering just that aspect of the draft is seen as enough of a change to secure Rosenworcel's support, industry officials told us. Rosenworcel's office wouldn't comment.
Removing FCC oversight of the license terms would address programmers' main criticism of the draft item, but would leave a host of issues raised by MVPDs intact, several industry officials said. During the proceeding, Wheeler has been seen as focused on bringing programmers on board with the proposal -- he phoned content company CEOs after they attacked a set-top NPRM (see 1608040062). Asked about possible negotiations on the top floor, an FCC spokeswoman told us that “staff have been engaging with programmers and are working towards a constructive solution.”
Recent filings by MVPDs show that their problems with the set-top draft are far more expansive, though they have also been critical of the licensing program. The draft order would cause the FCC to “regulate virtually every aspect of MVPD apps in ways that are both unlawful and are a severe threat to the thriving video ecosystem,” said AT&T, in a letter posted in docket 16-42 Thursday. The telco-TV provider said the order would prevent it from deploying in home devices for U-Verse and illegally require MVPDs to provide existing services to third parties and support new services. In a meeting with aides to Wheeler, Verizon raised concerns about the streams of data MVPDs will be required to provide third parties and “unreasonable burdens.” NCTA has said the order would require MVPDs to make apps for new third parties in perpetuity.
If the draft order goes forward with only the licensing aspects changed, pay-TV carriers are likely to seek judicial review, several industry officials told us. “We can expect some litigation and fast,” Spiwak said. AT&T, Dish Network and others have already raised Administrative Procedure Act concerns about provisions of the draft order, which differs significantly from the NPRM.
The FCC doesn't need to alter the licensing aspect of the draft order to remain within the bounds of copyright law, said a filing from 16 law professors from schools such as Loyola and the University of Virginia Thursday. ”The apps proposal does not amount to a compulsory license,” the filing said. “With respect to copyright law, the current proposal is no different than the existing CableCARD rules, which require cable operators to make their programming available on unaffiliated, third-party devices.” The signatures on the letter included those of Robert Frieden, Penn State professor of telecommunications and law, and Georgetown Law professor Rebecca Tushnet. This echoes the stance of Public Knowledge and the Consumer Video Choice Coalition, which have supported the FCC's plans. “Cable monopolies and Hollywood studios just want to lock consumers in the past” said Public Knowledge CEO Gene Kimmelman in a news release. “Hollywood once tried to kill the VCR, and today’s assault on consumer choice is no different.”