FCC chairman Tom Wheeler told a Senate Commerce Committee panel Wednesday that the cable operators' programming stream will remain protected under a new proposal currently being vetted at the commission.
As expected, the FCC's set-top box proposal got a working-over at the Senate Commerce Committee FCC oversight hearing Wednesday, but it also got a vigorous defense from one of the co-authors of the Telecom Act provision directing the FCC to foster a competitive marketplace for navigation devices.
Commerce chairman Sen. John Thune (R-S.D.) teed up the issue right out of the gate in his opening remarks for the lengthy hearing. "The FCC recently proposed a partisan rulemaking to have the government somehow better produce results than the astonishing and consumer-empowering disruption that is already happening," he said.
He pointed out that the committee's ranking member, Democrat Bill Nelson (D-Fla.) had written Wheeler with his concerns about the impact of the proposal on the marketplace and said he echoed those.
"From smart TVs to Internet-based video platforms to Apple TV, Roku, Amazon Fire TV, and Google Chromecast, advances abound in the competitive video navigation device market," Nelson told Wheeler in that letter.
And while Nelson says he supports the objective of enabling competition, he warned Wheeler that the FCC "should not proceed down a path to rules that fail to fully account for today's pay-TV viewing landscape." He also said the FCC should not allow third parties to do more with programming content than "has been done through negotiated arrangements between content owners and their partners," sentiments he echoed at the hearing.
Thune said the bottom line is that the marketplace is competitive and already providing its own options in navigation devices.
Saying "we don't want to threaten the vibrant market for video programming," Nelson gave Wheeler a chance to explain how his proposal would not be a threat to copyrights or contracts, and afterwards appeared satisfied with the answers.
Asked by Nelson if the proposal would impact the ability of third parties to alter or add top programming and advertising to a cable operators' programming stream, Wheeler said: "That which the cable operators put out should remain sacrosanct and untouched." He said nothing in his proposal creates an opportunity that would allow it to be "touched," as it were. He said that was both because of copyright laws and because the language in the item was "lifted" from language being used in their CableCARD agreements, which he said has proved sufficient.
Plus, he said, the item asks for input from those who think those protections aren't sufficient.
One criticism of the chairman's proposal is that it is straying beyond the bounds of the statute, which was about hardware, not software. Wheeler said the world was moving to software and the issue could not be addressed without getting into that space.
Later in the hearing, Republican commissioner Michael O'Rielly was asked to comment on what his former boss, Virginia Republican and then Commerce Committee chairman Tom Bliley, had meant when drafting the competitive navigation device language—O'Rielly was a committee staffer at the time—for the 1996 Act.
O'Rielly said it was definitely about the hardware. "I don't believe when you look at the text of the language, which talks about boxes, which talks about interactive communications equipment, and other equipment, that it gets to an application-only world. I think it is overbroad and penalizing going forward."
When it came time for him to speak, Sen. Ed Markey (D-Mass.), who was co-author with Bliley of the set-top language, said he had many conversations about what the legislative intent was and that was "to break down this monopoly that forced consumers to rent set-top boxes."
Commissioner Ajit Pai said that while everyone agrees the programming stream should remain sacrosanct, "unfortunately, nothing in the document actually protects it."
"This is the second straight hearing at which senior members of Congress have expressed bipartisan concerns about the FCC’s set top box proposal and the damage it would do to consumers and the incredibly vibrant market for video and TV — and it won't be the last," the Future of TV Coalition said in a statement following the hearing. "We appreciate Chairman Thune, Ranking Member Nelson and their colleagues questioning this flawed proposal, which will threaten our privacy, undermine program diversity, and drive up consumer bills. The Chairman's lack of concrete persuasive answers to these and other concerns should be a cautionary tale for anyone considering gambling the future of TV on this ill-thought out and reckless proposal.”
The coalition comprises cable ISPs and others opposed to the proposal.