FCC Set-Top Box Proposal Receives Heightened National Attention

The FCC’s set-top box proposal seemed to be limited to the radars of those who operate in the television and technology industries. Then, in mid-April, President Barack Obama charged in and the issue went nuclear.

“The cable or satellite box is just one example of an area where because it’s been tied to the provider, and you rent it and consumers spend billions of dollars on this every single year,” Obama said in an interview with Yahoo News. “There hasn’t been much innovation … the potential here is for cheaper, more effective services that are provided.”

Obama further stated that he would sign an Executive Order allowing federal agencies to suggest methods that would spur economic competitiveness, and his economic advisers Jason Furman and Jeffrey Zients crafted an aggressively-worded official White House blog post on the efforts.

Describing the STB as “ugly” in an accompanying video, the duo wrote that it’s “a stand-in for what happens when you don’t have the choice to go elsewhere—for all the parts of our economy where competition could do more.”

The Obama administration then opened up a third front, with Obama covering the debate in his weekly address.

“One industry that’s ripe for change is cable TV ... There’s next to no competition to build a better, user-friendly product that allows you to easily access all this content in one place. My administration has encouraged the FCC to remove the barriers to competition,” Obama told the American public.

Needless to say, the reaction was swift:

MPAA Chairman and CEO Chris Dodd, a former U.S. Senator who actually competed against Obama for the Democratic Party’s presidential nomination in 2008, said that the text of the FCC’s current plan was unacceptable.

“Any FCC rules must explicitly prohibit third parties from using content without seeking permission from and compensating the copyright holders; from manipulating the content, the way it is presented, or otherwise deviating from conditions in the licensing agreement with the pay-TV provider; from selling advertising in conjunction with the programming; from monetizing the viewing habits of subscribers; or from presenting pirated content alongside licensed content,” Dodd stated.

And at NAB in Las Vegas, the proposal received a negative response during a panel.

“You might think from hearing it that the Commission is merely tweaking the current rules on set-top boxes. But in fact, this initiative is really all about taking a 90s regime and redefining all of its terms to let the Commission get its hooks into all of the new technology that has developed since then, outside of the Commission’s authority,” FCC commissioner Michael O’Reilly told attendees. “I can think of a few choice words to describe this lunacy, but I’ll settle for fatally flawed.”

These criticisms were followed by even harsher retorts.

The American Cable Association called the proposal “illegal,” while the National Cable & Telecommunications Association (NCTA) threatened litigation if it’s formally adopted.

"There is no urgency for such reckless rulemaking," NCTA wrote in approximately 400 pages of commentary.

The Future of TV Coalition also released a statement denouncing Obama’s endorsement of the FCC proposal.

“A FCC technology mandate will decimate the creative industry, rip up licensing protections, tear down the value of content, and strip away consumer privacy protections,” the Coalition said.

But it wasn’t all backlash.

“The President’s support for set-top box competition virtually ensures that consumers will finally see a $15 billion per year rip-off exploded by new electronic devices streaming innovative video services that challenge cable monopolies,” cheered Public Knowledge CEO Gene Kimmelman.

All-in-all, the FCC received 28,000 responses to the plan, which had a deadline of last Friday, April 22.

Another deadline of May 23 has been established for reply comments, and the FCC has suggested meetings in early June. Will the President's embrace of the FCC's proposal backfire, or assist it?

Author: Brian Cameron

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