The National Cable & Telecommunications Association and other parties opposed to the FCC's "unlock the box" set-top proposal are pitching a compromise "ditch the box" (#ditchthebox) alternative they say "combines enforceable obligations and open standards, which are centerpieces of the FCC’s Notice of Proposed Rulemaking, with the market-driven apps solutions preferred by critics of the FCC’s proposed mandate."
They also commit to a two-year timeline, rather than the several years predicted for the proposal by FCC chairman Tom Wheeler and supported by the Democrats on the commission.
NCTA president Michael Powell, joined representatives of Revolt TV, TV One, Vme TV, AT&T/DirecTV and Comcast in meetings with FCC officials June 15 to pitch the proposal, according to an ex parte filing.
They said after talks with ISPs about how to achieve the FCC end of a competitive market, they hit on an alternative based on enforcing an industry-wide commitment—"binding, enforceable obligations" to "develop and deploy video 'apps' that all large MVPDs would build to open HTML5 web standards," which they say would benefit consumers and commercial rights.
Backers of the FCC proposal want more than app gateways to cable programming lineups side-by-side with online offerings. They want the content side-by-side and searchable. Backers of the compromise say it does that and more.
“Advocates for the FCC’s 'Unlock the Box' proposal have argued that monthly box rental fees are too high, that open standards are needed to create more competition in the market for video devices, and that these new devices should be allowed to integrate both pay-TV and streaming content in the same search interface," say backers of the compromise. “This alternative proposal allows customers to ditch their box altogether, utilizes the open HTML5 standard, and will let devices search for content from both pay-TV apps and other licensed video apps through the device’s search menu.”
“Chairman Wheeler is heartened that the industry has adopted the primary goal of our proposal, to promote greater competition and choice for consumers, and agree it is achievable," said FCC press secretary Kim Hart. "We all agree that third-party access to pay-tv content, integrated search and the protection of copyright, content security, consumer privacy and minority programmers are critical. There is a lot more work to do."
"We look forward to seeing additional details so we can determine whether their proposal fully meets all of the goals of our proceeding and the statute. We will continue to work with all stakeholders to develop rules that allow innovation to flourish and ensure consumers have real options for accessing the pay-tv programming they purchase."
The chairman had uged the industry to weigh in with their proposals on how to improve the item, telling them at INTX that the industry needed to offer up solutions rather than slogans--though it is undoubtedly the FCC's "unlock the box" tagline that prompted the "ditch the box" branding for its proposal.
The Motion Picture Association of America called it a constructive step, but still appeared to have questions that needed answering.
"The MPAA and its member companies support the goal of enabling set-top box alternatives. We have consistently emphasized, however, that any regulatory proposal must ensure that programmers maintain privately-negotiated licenses with any party that seeks to deliver their programming, in order to ensure that content companies are not harmed in any way as it relates to the protection and presentation of their content. These elements are essential to maintaining economic incentives for the creation of video programming that brings tremendous value to audiences and our economy.
"The new applications-based proposal presented today is a constructive step, and we appreciate the MVPDs' thoughtful effort. We will continue conversations with the FCC and others as we evaluate how well this and other proposals respect programmers’ rights, particularly their rights to determine whether and how to disseminate their programming and how best to secure it."
The Future of TV Coalition, comprising ISPs and others pushing back on the FCC's set-top proposal to require MVPDs to make their content and data available to third parties, outlined the benefits of the compromise in a fact sheet Thursday.
• "Apps, Not Boxes. Pay-TV customers will gain the option of ditching their leased boxes* in favor of downloadable apps that can run on smart TVs and other connected devices. (*Satellite TV providers will also offer apps, but customers will still need one in-home gateway device to receive signals from the satellite and offer features competitive with two-way services.).
• "No Monthly Box Rental Fees. Consumers will be able to download apps onto connected devices they own themselves, eliminating the need for leased boxes and equipment rental fees. In addition, TV providers will license their apps without charge to third-party devices for their app stores – provided the device makers or app stores do not impose their own fees or surcharges.
• “Open Standards. Providers’ apps will be built on open HTML5 standards, or more advanced successor standards. Providers will be required to make the apps available to any manufacturer on commercially reasonable terms.
• "Protecting TV Diversity and Strengthening the Creative Ecosystem. Unlike the FCC’s proposal, apps deployed in this 'Ditch the Box' approach will include the technical means to protect content and enforce program licensing terms. The app license agreements would also prohibit equipment manufacturers from violating licensing terms, burying niche programming, or inserting or overlaying additional advertising.
• “Integrated Search. Consumers will be able to use the interfaces of third-party devices to seamlessly search for and discover content from both pay-TV providers and online video services offering licensed content on the same device.
• “Preserving Federal Privacy Rules and Other Consumer Protections. Unlike the FCC’s proposal, viewers will enjoy the same federal privacy protections on these new apps that they have when watching pay TV on traditional set-top boxes. This solution also preserves federal requirements relating to emergency alerts, accessibility features, children’s programming requirements, and other consumer protections.
• “Concrete Deadlines. Providers will have two years to fully implement the new requirements – and many are already racing to do so sooner. By contrast, independent experts predict the FCC’s approach would take years longer."
"It seems to me that the proposed STB compromise balances the interests of privacy and IP protection, open-standards and apps-based platform concerns," said Adonis Hoffman, former chief of staff to FCC commissioner Mignon Clyburn and currently chairman of Business in the Public Interest. "All of this is good for consumers and is less disruptive to industry. In the long-term, this is the direction the market is moving, and it is where policy should focus. Looks like it is much more consistent with the DSTAC [FCC navigation device committee] recommendations and furthers the public interest."