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On the eve of the set-top box vote


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On the eve of the set-top box vote

Asthe calendar creeps closer to the FCC's Sept. 29 meeting, both sides of theset-top box debatetried to get in one final word.

Muchof the public commentary at this point seems to quibble over smaller details inthe proposal, which would require any operator with more than 400,000subscribers to offer a free app that provides access to all the programmingconsumers would otherwise receive through a leased set-top box.

Onepoint of contention still remaining is whether operators should be forced todevelop separate apps that conform to each device-maker's specific standards,or whether device-makers should be forced to change their platform to adopt amore universal standard.

FCCChairman Tom Wheeler's initial apps proposal endorsed the former option, butCox Communications Inc.argued in recent meetings with the commission that this places an inequitableburden on pay TV providers.

Whereasoperators would have to "provide and support an unspecified number ofnative apps," platform manufacturers and developers "would not needto make any changes and effectively would be in a position to dictate the termsof MVPD compliance," Cox said in a filing.

Thecompany noted that it does not broadly object to devoting resources to nativeapps — Cox currently offers native apps for three platforms: web, 's iOS and 's Android — but itworries the proposal could result in "an unworkable number of separate,customized app configurations" that would be expensive and time-consumingto develop and maintain.

, meanwhile, the FCC not changeone jot when it comes to how the proposal is currently written.

"Theproposed regulations do not envision — nor should they require — distributionplatforms to alter their existing platforms to support the MVPDs' apps,"Roku said, noting that the standard license outlined in the proposal isexpected to include technical appendices that can address any features uniqueto a particular platform.

SNL Image

Comcast X1 box
Source: Comcast

Notably,Roku suggests "platform" should be defined sufficiently narrowly toensure that MVPDs only have to develop one app for each rather than having todevelop separate apps for various iterations.

Anotherpoint of contention in the proposal is a provision that would require all MVPDsto state a separate charge for leased devices — including modems, routers andset-top boxes — on customers' monthly bills.

hasbeen fighting theprovision, arguing that it provides modems to its broadband customers for nocharge and should not be required to break out a fee. In a Sept. 23 , Charter continued tomake its case, calling the provision "legally flawed."

,too, said it has been making calls to FCC staff, urging them to maintaincurrent billing rules. "Requiring separate charges for devices wouldpreclude the types of simple, all-in-one price offers that many consumersappreciate," Verizon said.

Thecompany added, "At a minimum, the FCC should not require line item chargesfor MVPD equipment that customers will need to receive their service even ifthey purchase a retail device to view the MVPD's app."

Butthe main issue that has attracted the most attention with Wheeler's set-top boxproposal is the role the commission will play in the licensing process.Specifically, the proposal calls for the creation of a copyright licensingboard that would be overseen by the FCC.

Criticshave said the FCC has no authority to interfere with licensing or copyrightnegotiations. And importantly, Democratic Commissioner Jessica Rosenworcel,along with Republican Commissioners Michael O'Rielly and Ajit Pai, are amongthose critics, meaning that unless the proposal is changed, Wheeler does nothave sufficient votesto get it passed.

has an alternative systemthat would rely on existing app store processes rather than having a commission-overseenindustry group. To protect all parties involved, the commission could create acomplaint process through which an aggrieved party could protest unfair termsand conditions.

Inother words, the commission would only get involved if there were allegationsof wrongdoing.

"Awell-functioning market solution—and not a government-supervised industrycommittee — is the appropriate solution in the first instance. If examples ofmarket failure arise, then a complaint process can be used to address relatedconcerns," Amazon said.

Programmers,however, objected to this alternative solution a Sept. 22 , arguing, "The Commissionshould not — through review of license terms, adjudications or complaint processes,or any other means — create an end result in which programmers are forced todistribute content on terms that conflict with or otherwise undermine theiraffiliate agreements."

Instead,the programmers — including WaltDisney Co., CBS Corp.,Scripps Networks Interactive Inc.,Time Warner Inc.,21st Century Fox Inc.and Viacom Inc. —encouraged the commission to give the pay TV industry two years to prove thecontracts between programmers and operators do not need regulatory oversightunder the new proposal. Under this plan, the FCC would conduct an evaluationprocess in 2020, two years after the initial two-year deadline for launchingapps. At that time, the commission could assess whether any additional steps — "consistentwith [FCC] authority," the programmers noted — were needed.

Atthis point, it remains unclear how Wheeler will address the licensing question,and whether the chairman will have enough votes to get the proposal passed.

Buttime is running out. As of Sept. 28, a commission representative confirmed avote on the proposal remains on the agenda for the Sept. 29 meeting.