Flurry of Set-Top Lobbying Continued at FCC

Industry officials believe Chairman Tom Wheeler's office is examining the idea of altering the planned FCC oversight of the set-top licensing regime to make its set-top plan more attractive to programmers and Commissioner Jessica Rosenworcel, who has been critical of its complexity (see 1609220069).

The agency should replace that licensing oversight with a two-year trial period after the set-top rules are implemented, to allow the MVPD apps to be developed and disseminated, said 21st Century Fox, Scripps, Viacom, CBS, Time Warner and Disney in a joint filing on several meetings with FCC officials. After the two years, the FCC could act to address any anticompetitive practices, the programmers said. FCC officials brought up the Amazon proposal with the programmers in those meetings, the ex parte report said. The Amazon proposal, which has been floated in several ex parte filings, would replace the FCC's planned licensing body with a complaint process and a requirement that pay-TV carriers within a year provide an app on widely distributed devices. The programmers oppose the complaint process in the Amazon plan and don't like the lack of programmer involvement in the app licenses, the programmer ex parte filing said.

The commission should delay the vote on the set-top proposal, said a coalition of civil rights groups including the National Urban League, Multicultural Media, Telecom and Internet Council, Rainbow/PUSH Coalition and the NAACP. “We remain concerned that this revised proposal may still bring undue harm and stress to the business models of diverse and independent programmers,” said the joint letter signed by activists Al Sharpton, Jesse Jackson and others. The FCC “continues to arbitrarily ignore its statutory duty to protect diversity and inclusion,” said the joint letter. “Independent minority programmers worry that this proposal may lack mechanisms that they need to effectively access the market -- such as necessary standardization of technology.”

NCTA, AT&T, Charter Communications, Cox and Comcast laid out their continuing objections to the FCC proposal, in their meetings with commission officials. “The Commission does not have the authority to dictate the terms by which an app is licensed, or to review the terms of the underlying agreements between programmers and distributors,” the MVPD interests said. They object to several aspects of the FCC plan, including a requirement they deliver various kinds of data to third party devices to allow functions such as universal search to operate. “MVPDs today do not deliver entitlements in a standardized way, and any mandate to create a standardized 'entitlements' stream would require significant changes to MVPDs’ networks -- imposing even more costs -- and introduce rigidity that threatens to stifle innovation and restrict new consumer offerings,” the filing said. The commission proposal “exceeds its statutory authority, particularly with respect to its creation of a government-created and overseen, centralized licensing entity that would insert itself into the vibrant video marketplace by negotiating contracts for private parties and dictating the terms of copyright license,” said USTelecom.

Rep. Tony Cardenas, D-Calif., led 63 House Democrats in pressing the FCC to let the public see the set-top order and to allow further comment through a further NPRM. “The details in the fact sheet are drastically different from the original 66-page proposal that the FCC released for comment in February,” said Cardenas, a Commerce Committee member. “I too want to promote competition; however, if the FCC gets this wrong, I’m afraid it could up-end the entire industry and push out content creators with devastating impacts to our creative economy. The FCC needs to ensure they get the rule right, not rush.” The lawmakers are concerned, they told Wheeler in a letter Thursday. “The creation of a standard license with which all device manufacturers, pay-TV providers, and programmers would have to comply strikes at the heart of the way content creators exercise their copyrights,” said the Democrats, including Congressional Black Caucus Chairman G.K. Butterfield, D-N.C., and Yvette Clark, D-N.Y. “We are a concerned that a standard license would encroach upon the highly competitive and complex licenses carefully negotiated between content creators and pay-TV providers.” Reps. Anna Eshoo and Zoe Lofgren, both California Democrats, defended the order last week and opposed further delay (see 1609220041).

“Concerns raised by parties throughout this proceeding have been largely addressed by revisions to the FCC’s proposed rules,” said T-Mobile in a filing in support of the plan. “Access to the MVPDs’ video navigation systems should be as readily available as access to third-party navigation systems,” said T-Mobile. “These requirements would help T-Mobile better meet consumers’ demand for access to video content on an 'any time, any place' basis.” The carrier is a “competition and disruption success story, and the cable set-top box is long overdue for both,” said Incompas CEO Chip Pickering in a statement praising T-Mobile's comments.

The FCC plan “rightly safeguards device manufacturers from terms and conditions that may allow MVPDs and programmers to discriminate against certain categories or devices or to engage in anti-competitive behavior,” said the Consumer Video Choice Coalition, which includes Incompas and Public Knowledge. The commission's plan to act as a “backstop” would be supported by the current CableCARD rules, the CVCC said. TiVo agreed in its own comments. “All of these proposed requirements, as well as continued Commission oversight, fall clearly within the Commission’s authority to assure a competitive retail market for video navigation devices,” TiVo said.

Roku also endorsed the FCC's plan, which it said would permit more innovation than the HTML5 approach backed by MVPDs. Making “platform-specific” technical appendices to facilitate apps “should not be an overly complex matter,” Roku said, pointing to the availability of free software development kits for many platforms.

WTA and Mediacom representatives lobbied to argue in favor of the proposed exemption for carriers with fewer than 400,000 subscribers and delayed implementation for those with between 400,000 and 1 million subscribers, said ex parte filings. Nvidia wants the FCC to change the 5-million-unit threshold that denotes a “widely deployed” platform. The number should be dropped to 2 million, Nvidia said, and Hauppauge said the platform threshold shouldn't be so high as to be discouraging. “The number of devices used to determine a 'widely deployed platform' should be low enough not to preclude new entrants to the marketplace, while allowing for uniformity sufficient to assure national portability and interoperability of solutions,” Hauppauge said.