Washington

Wheeler Sets New Course for Set-Tops

Proposes uniting online, traditional video in 'single place' 1/27/2016 12:30:00 PM Eastern

FCC chairman Tom Wheeler is proposing a one-stop shopping approach to "choice and competition" in the set-top market that will unite all video, online and traditional, through a single box, or no box, billing it as an attempt to "tear down anti-competitive barriers and pave the way for software, devices and other innovative solutions to compete with the set-top boxes that a majority of consumers must lease today."

"When consumers are able to access all their content – from MVPD programming to streaming video – in a single place, they will be better able to find and enjoy the programming most relevant to them," the commission said in unveiling the proposal, which still must garner at least three commissioner votes.

The chairman is identifying three "core" MVPD information streams that must be available to competitive devices or apps:

  • Service discovery: Information about what programming is available to the consumer, such as the channel listing and video-on-demand lineup, and what is on those channels.
  • Entitlements: Information about what a device is allowed to do with content, such as recording.
  • Content delivery: The video programming itself.

According to FCC senior officials speaking on background Wednesday, the chairman is launching a notice of proposed rulemaking that he has scheduled a vote on at the Feb. 18 public meeting.

"Ninety-nine percent of pay-TV subscribers are chained to their set-top boxes because cable and satellite operators have locked up the market," the FCC said in summarizing the proposal. "Lack of competition has meant few choices and high prices for consumers."

The proposal is billed as providing more choice for consumers; greater flexibility—no one will have to get a new device if they want to keep their current box—more innovation; user-friendly interfaces; more competition and better prices.

Senior FCC officials speaking on background said nothing in the proposal will disrupt MVPD contracts with their subs or content providers, including advertising, which will all still be passed through.  They also said the proposal is not about disaggregating the cable bundle.

The officials said that nothing in the proposal gets in the way of MVPD's deploying their own online viewing apps, but that consumers should be able to access the same content in the same quality with the same functions--like recording--via other devices.

An official also signaled the proposal was at least in part in response to activist group complaints about the price of set-tops and the need to open up the competitive market.

Here is the FCC's summary of the plan details:

Standards: Promoting Interoperability and Removing Barriers to Innovation

  • Instead of mandating a government-specific standard for these three information flows, which might impede innovation, the Chairman’s proposal recommends that they be made available to the creators of competitive devices and navigation solutions using any published, transparent format that conforms to specifications set by an independent, open standards body.
  • The proposal identifies five characteristics that must be met by an independent standards body: openness in membership, a balance of interests, due process, an appeals process, and consensus.

Security: Preventing Theft and Misuse

As technology has evolved, so has the market’s ability to prevent theft and misuse.  Smart TVs, for example, currently ensure the same security for copyrighted material as the traditional set-top box. The proposal provides MVPDs flexibility in the security systems they use while putting in place some constraints to ensure that they do not use their security choices for anti-competitive purposes.

  • The proposal does not propose a single mandated security system, but rather simply requires MVPDs to offer at least one content protection system that is openly licensed on reasonable and non-discriminatory terms. This will allow each MVPD to determine the content protection systems it deems sufficient to prevent theft and misuse, and will not impede the introduction of new content protection systems.

Programming: Lifting Up Independent and Minority Content

When consumers are able to access all their content – from MVPD programming to streaming video – in a single place, they will be better able to find and enjoy the programming most relevant to them. When it’s easier for content creators to reach consumers, we would expect this to lead to more and better programming accessed more easily, especially minority, independent, and international programming.

Copyright Protection and Distribution: Honoring The Sanctity of Contracts

The proposal maintains important aspects of the traditional video distribution regime, such as protections against copyright infringement and theft of service. The proposal is clear – the Commission will not interfere with the business relationships between MVPDs and their content providers or between MVPDs and their customers. The proposal does not change a company's ability to package and price its programming to its subscribers.

  • Maintains strong protections for copyrighted content: Copyrights and licensing agreements will remain in place, and copyrighted content will be protected from piracy much as it is protected under the existing CableCARD regime. Similarly, the proposal honors the limits on the use of programming agreed upon between cable companies and content providers (e.g., ability to record content).
  • Existing content distribution deals, licensing terms, and conditions will remain unchanged. These deals made between MVPDs and content providers are not affected by this proposal.  MVPDs retain their customers and will still get a monthly fee for the subscription service that the MVPD provides.  The only change the FCC is proposing is to allow consumers alternative means of accessing the content they pay for.

Consumer Protection: Emergency Alerts, Privacy and Advertising

The proposal seeks to ensure that important consumer protections like emergency alerting, privacy, and children’s advertising restrictions will apply.

  • EAS: The emergency alerting system is built to be technology neutral so that any entity – from an MVPD to an ISP to an online streaming service – can provide EAS alerts.  The proposal notes that under the CableCARD regime competitive devices are required to pass through EAS alerts, and it proposes to require the same here.
  • Privacy: The FCC has a long history of protecting the privacy of consumers of communications services.  Device manufacturers and software developers already must comply with applicable state and federal laws regarding consumer privacy.  The proposal seeks to ensure that the privacy protections that exist today will also apply when alternative navigation devices are used.
  • Advertising restrictions:   The proposal seeks to ensure that restrictions on children’s advertising will apply, whether a consumer uses an MVPD-supplied set-top box or a competitive alternative.

As part of the STELAR satellite bill, the FCC was required to sunset its ban on integrated set-tops and come up with a software alternative to the CableCARD hardware regime that separated the security and search functions of set-top boxes.

The FCC formed the Downloadable Security Technology Advisory Committee (DSTAC) to ponder that software in particular, and larger questions about the future of set-tops, and make recommendations. The committee provided its recommendations in late August 2015, but did not pick among them.

Backers of an "AllVid" proposal wanted the FCC to wed access to traditional and online video, while MVPDs said the marketplace is already doing that through apps and does not need a government-mandated disaggregation of content.

The ban on integrated set-tops sunset Dec. 4.

The FCC back in 1998 mandated that cable operators use a separate piece of hardware—a CableCARD—to separate the surfing and security functions in set-tops as a way to promote a competitive retail market in the boxes. That mandate failed to achieve the goal and was sunset in the STELAR satellite compulsory license reauthorization bill that passed last year.

Tech companies have long pushed for a common IP-based interface, buoyed by the National Broadband Plan proposal of "initiat[ing] a proceeding to ensure that all multichannel video programming distributors (MVPDs) install a gateway device or equivalent functionality in all new subscriber homes and in all homes requiring replacement set-top boxes."

The FCC, under then-chairman Julius Genachowski, was looking to wed broadband, broadcast, cable and satellite programming services in an "AllVid" TV set-top device as a spur to the broadband deployment and adoption that remains job one for this commission as well.

Cable ops countered that the result would be to deconstruct its programming service in violation of copyright, trademark, contract, licensing and other rights.

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