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By Lydia Beyoud
June 21 — A Google Inc. spokeswoman called the pay-TV industry's recent set-top box proposal a “constructive” measure, signaling a possible shift toward a compromise among the pay-TV industry, tech companies and the Federal Communications Commission on the agency's effort to revamp the pay-TV set-top box market.
FCC Chairman Tom Wheeler's proposal to transform the $20 billion industry into a retail device market is facing heavy pay-TV industry opposition. Dozens of lawmakers, including Senate leaders, have registered concerns with the plan. Given that, the pay-TV industry's bid might spur the various players to hammer out a new proposal.
“There is widespread agreement that it should be easier for people to find and watch the shows they love—whether that’s on cable, via satellite, on demand, or online,” a Google spokeswoman told Bloomberg BNA via e-mail. “The proposal by some programmers and pay-TV providers is a constructive effort towards the goal of more competition and consumer choice, and we hope that it sparks a dialogue between the FCC and interested parties to reach a good outcome for American viewers.”
Google has served as chief boogeyman for pay-TV industry concerns about the FCC's proposal. Many in the pay-TV industry and other critics of the FCC's proposed effort to transform the set-top box market into a retail—rather than rental—market have decried Google and parent company Alphabet Inc.'s interest in the proposal as a means of accessing valuable consumer TV viewing data.
But Google's remarks may signal that the conversation around the FCC's set-top box proposal has changed significantly in just a few days.
Representatives from AT&T Inc.-DirecTV, Comcast Corp., Charter Communications Corp. and the National Cable & Telecommunications Association met with FCC officials last week to discuss an application-based approach that would work with any retail pay-TV navigation device or app.
The FCC has said from the beginning that its primary intent has been to fulfill a mandate to ensure a competitive set-top navigation device market and free consumers from their obligation to rent a device from pay-TV providers.
However, the agency's proposal has drawn fire from multiple quarters, including over 190 lawmakers from both parties, for its potential impact on copyright, contractual arrangements, consumer privacy and minority programming. Senate minority leader Harry Reid (D-Nev.) added his name to the list of lawmakers with a missive to the FCC dated June 14 urging Wheeler to give “careful consideration” to the rules, which he said raised questions about consumer privacy and copyright protection.
“At the end of the day, I don't know that there's much to the chairman's proposal that you're not going to get out of this proposal, but you get it in a way much more conducive” to achieving the chairman's goals in a way that doesn't raise the same concerns for the bevy of industries impacted by the rule, a pay-TV industry official told Bloomberg BNA June 20.
Another pay-TV industry official with knowledge of the proposal said June 21 there were “positive conversations happening all around” regarding the alternate approach.
That could have a significant impact on a number of provisions attached to spending bills making their way through the House and Senate that seek to stall the FCC's ability to proceed with its proposal. Those provisions could be stripped out if there is progress on a plan more palatable to the various impacted industries, including cable and satellite providers, content companies, minority programmers, public interest groups and tech companies such as Google and TiVo Inc.
Democratic FCC commissioners Jessica Rosenworcel and Mignon Clyburn have also signaled a willingness to hear alternatives to the agency's proposal.
“Set-top boxes are clunky and costly,” Rosenworcel said in a June 20 statement through her spokesman. “Consumers don’t like them and they don’t like paying for them. Kudos to the chairman for kicking off this conversation but it has become clear the original proposal has real flaws and, as I’ve suggested before, is too complicated. We need to find another way forward. So I’m glad that efforts are underway to hash out alternatives to provide consumers with more choice and more competition at lower costs.”
A Clyburn spokesman told Bloomberg BNA June 20 that Clyburn also welcomed “constructive efforts by industry” to put forward alternatives to the FCC's proposed rule. Clyburn continues to study the pay-TV proposal “with an eye towards a solution that adheres to Section 629 of the Communications Act; ensures truly competitive choice; enhances access to diverse programming; and provides the protections for copyright, security and privacy that consumers have come to expect.”
Republican Commissioner Ajit Pai's office declined to comment on the proposal, and fellow Republican Commissioner Michael O'Rielly's office did not respond to a request for comment.
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Text of Reid's letter is at http://src.bna.com/f5A.
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