NCTA — The Internet & Television Association

Four Reasons Why the FCC Set-Top Box Proposal Won’t Work

Four Reasons Why the FCC Set-Top Box Proposal Won’t Work

FCC Set-Top Box Wont Work

During a time when the worlds of technology, media and television are colliding and undergoing constant change and delivering exciting new services, you would think the government would focus its efforts on areas that truly need fixing. That’s why it is so puzzling that the FCC finds it necessary to propose a complicated and backwards-looking set-top box mandate that has unleashed a torrent of criticism from a significant (and growing) coalition of diverse voices. After all, the entire TV ecosystem is moving away from a hardware-centric world and into one that relies on apps and IP connected devices to unleash the amazing programming, new bundles and other features being offered by various content creators, TV providers and technology companies.

The FCC’s set-top box mandate threatens to harm competition and innovation by strong-arming pay TV providers into giving away for free valuable programming to third parties, for them to rearrange, repurpose and monetize without responsibilities or obligations. NCTA filed comments last night that break down exactly how this proposal not only unnecessarily hurts big and small content creators, TV providers and others,  but importantly the millions of American consumers who have benefited from the valuable and diverse content on TV. Here are a few of those highlights:

Consumers are Choosing Apps
First, the mere premise of the mandate is outdated in that it assumes customers are locked to the set-top box. The expansion of the apps marketplace, which we owe to the competition and innovation that drives our new media economy, has showed us that customers want apps because of the choice and flexibility that it gives them when they watch their favorite shows. American audiences today can find nearly all premium films and premium television series online and can choose among more than 115 online services to legally access television and film content over the Internet including Netflix, Hulu, Amazon, Sony PlayStation Vue, Sling TV, Verizon go90, and AT&T’s three new DIRECTV online offerings. Yet, despite this growth, the mandate would essentially keep customers from moving away from the set-top box. The FCC’s mandate does nothing to build on the success of the apps-based model.

Consumer Privacy Infringement
The proposal also strips away the privacy protections that consumers enjoy, and have a right to. As mentioned in NCTA’s comments as well as in a previous letter of opposition from many in the creative community, tech companies like Google would have free reign to mine private television viewing data to develop even more intrusive advertising. These tech giants would not be legally bound to the same consumer privacy protections that have guided pay TV providers for years. While consumers currently are protected with specific rights of action that enable them to prevent their viewing data from being shared, third parties like Google would not need to abide to these requirements, leaving subscribers vulnerable to privacy abuses.

Copyright Violations
The FCC mandate also threatens to strip consumers of the diverse, eclectic and award-winning contentthat they watch. How? The new rule would allow third parties to access and deliver video content for free, without regard to the contractual agreements made by copyright owners for the distribution, packaging, presentation, protection and funding of the content. The result – new programs, especially those that cater to minority audiences, might never get the chance to reach their intended audience because these third parties would have the liberty to arbitrarily prioritize or dismiss the content, licensing terms, and channel placement agreements that were made to give the program the best chance to succeed.

Security at Risk
Unbundling valuable TV content and delivering it to services that are under no obligation to secure it exposes both the content and customer to significant risk of cyber breaches including theft and malware. Dismantling and releasing content without any regard to the licensing, privacy, applications and technologies that protect the distribution of video is especially dangerous with all devices now Internet enabled.

Today, nearly two-thirds of U.S. TV homes now have at least one TV connected to the Internet via a Roku, Apple TV, or other streaming device. Never before have more consumers used more retail devices, tables and smartphones to watch pay TV programming. This is real progress that the FCC should be applauding, not attempting to halt with a mandate that looks to the past.