FCC Republicans Trash Agency's Set-Top Box Plan

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By Kyle Daly

May 17 — The Federal Communications Commission's two Republican members blasted the agency's set-top box proposal and the internal process surrounding it May 17, saying that no changes to the proposal would win their support.

“I would take the current proposal and throw it in the garbage. That’s where it belongs,” said Commissioner Michael O'Rielly.

O'Rielly appeared alongside fellow GOP Commissioner Ajit Pai and Democratic commissioners Mignon Clyburn and Jessica Rosenworcel in a panel discussion at the Internet & Television Expo (INTX) in Boston for CSPAN's “Communicators” program, co-hosted by Bloomberg BNA senior telecom reporter Lydia Beyoud.

Pai said the proposal is unnecessary given efforts from the cable industry to move pay-TV navigation away from hardware set-top boxes and towards app-based platforms. He said he can't understand why the FCC is focusing on the issue when it already has so much else on its plate. As long as the agency is moving forward on the proposal, though, Pai and O'Rielly said they aren't hopeful the agency will listen to criticisms raised by the pay-TV industry and by certain members of Congress.

“It's not a conversation; it's a dictation,” Pai said. Both Republicans said they expect that any proposal FCC Chairman Tom Wheeler puts to a vote will contain few, if any, changes from the original NPRM.

The set-top box proposal, which would establish open technical standards for equipment manufacturers and software developers to access pay-TV content, is one of the most contentious issues percolating at the agency. The commission voted 3-2 along party lines in February to approve a notice of proposed rulemaking (NPRM) that contains a number of open questions on implementation (2016 TLN 6, 3/1/16).

Aspiring entrants to the set-top box market, such as Google Inc. and Amazon.com Inc., back the proposal, as do public interest groups. Its proponents say it will bring competition to a stale corner of the pay-TV ecosystem and save American consumers billions of dollars per year in set-top box rental fees. Cable and content providers, however, say the proposal could have unforeseen consequences that harm both the pay-TV sector and consumers.

Over 100 lawmakers have expressed concern about the proposal (2016 TLN ???, 6/1/16), under which a self-certification mechanism would be established to ensure that third parties offering hardware or software alternatives to set-top pay-TV boxes stick to the same copyright, privacy and security protections required of pay-TV providers. Critics say the proposal wouldn't be sufficient to prevent third-party boxes from exacerbating piracy; causing financial and other harm to copyright owners; or risking consumer privacy and security.

O'Rielly and Pai unambiguously sided with those critics, despite assurances from Clyburn and Rosenworcel that the FCC is listening to lawmakers and stakeholders and will make sure it is mindful of the concerns raised as it works to finalize the proposal.

Rosenworcel and Clyburn said they believe the comments on the agency's proposal from both sides are creating a robust record that should lead to a workable set of rules that don't realize the copyright, piracy and other fears voiced by opponents.

“Call me an eternal optimist, but I happen to believe nirvana exists,” Clyburn said of arriving at a final rule package that sufficiently addresses all the concerns raised. “The fact that we're having this conversation and not passing down any edicts really speaks well for this interactive process — it's a notice of proposed rulemaking that we're putting forth, where everybody has input.”

The quartet discussed several other issues as well. All four said they'd like to see Congress update the rules found in the Government in the Sunshine Act of 1976 preventing more than two commissioners from meeting privately. Clyburn said the “cumbersome” rules make for “disjointed conversation.” The other three agreed that the FCC would likely see less discord, on the set-top box proposal and countless other items, if Congress updated the statute to allow commissioners to have informal conversations.

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

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

For More Information

The FCC's notice of proposed rulemaking is available at: http://src.bna.com/e36

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