FCC's O'Rielly Airs Set-Top Box Objections

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By Tim McElgunn

Oct. 4 — Republican FCC commissioner Michael O'Rielly took to the FCC blog Oct. 4 to detail his disagreements with Chairman Tom Wheeler's plan to open the pay-TV set-top box market to competition.

Wheeler has been pushing his proposal for months amid opposition from the cable and content industries and bipartisan misgivings at the agency and on Capitol Hill. Wheeler's best shot at garnering a majority of votes on the five-member commission is to secure the backing of both of his fellow Democrats, Mignon Clyburn and Jessica Rosenworcel. Rosenworcel has voiced reservations about the proposal. Wheeler faces staunch resistance from O'Rielly and fellow Republican commissioner Ajit Pai.

O'Rielly listed five areas that he sees as particularly problematic for the commission's push to craft new rules aimed at opening the set-top box market to third party equipment vendors and application developers. O'Rielly said the commission's efforts so far are “another perfect case in point for why the commission should make every open meeting item available to the public.”

Wheeler cancelled a scheduled Sept. 29 vote on the proposal, but said he intends to hold a vote by the end of the year and does not intend to open up a fresh public comment period that would further delay commission action.

Cost, Piracy Concerns

O'Rielly advocates removing any role for the FCC in overseeing licensing terms and conditions.

“Beyond the commission having no authority or expertise in this area, such interference could undo important protections enacted in those commercial agreements,” O'Rielly wrote.

Wheeler has already stepped back from his original proposal that the FCC review and sign off on all licensing agreements between pay-TV companies and application developers, but, O'Rielly said, “preserving any role for the commission is highly objectionable.”

O'Rielly also objects to forcing multichannel video programming distributors (MVPDs)—cable companies, satellite TV providers and telecoms offering TV services—to share data that would be needed to enable universal search across both MVPD-provided programming and content delivered as streams via the internet. He said that the commission's plan mandates sharing “metadata” only by MVPDs and asked, “To the extent universal search proves important to some consumers, why would the commission discriminate in favor of third party app providers?”

He questioned how many applications MVPDs would be required to develop and support, calling for an undefined “safe harbor for particular widely adopted and available consumer apps.” He also warned against forcing pay-TV providers to share revenue with app developers or app stores, calling it an “App Tax.”

Finally he said, MVPDs should not be required to provide their apps to any third party that includes pirated content in its search results, warning that giving consumers easy access to pirated content “will further degrade the video marketplace.”

Wheeler has invoked agency rules against outside contacts on the topic as the commission continues work. Those restrictions are typically in place only for the seven days preceding a vote and lifted when an item is removed from a meeting agenda. On Oct. 2, a coalition of 19 civil rights groups petitioned the commission to lift the restrictions and allow public comment on the revised proposal before the commission votes on it.

To contact the reporter on this story: Tim McElgunn in Cherry Hill, NJ at tmcelgunn@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

O'Rielly's blog post is available at http://src.bna.com/i8A.

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