FCC Commissioners Delay Vote on Controversial Proposal to Open Up the Market for Set-Top Boxes

Earlier this year, the Federal Communications Commission, led by Chairman Tom Wheeler, released a proposal to introduce competition into the cable-company-dominated market for cable set-top boxes by enabling unaffiliated third-party device manufacturers to access content licensed to the U.S. cable and satellite providers. 
 
Following a public comment period, the Chairman’s proposal was revised in a brief release to reflect an “app based” approach, requiring Pay-TV providers to develop free applications that would deliver licensed programming to other consumer devices under a standard license, the terms of which would be subject to FCC review. Despite calls from producers and their distributors and Congressional leaders, the complete text of the revised proposal has not been made available.
 
IFTA joined virtually the entire creative sector, with the exception of the Writer’s Guild of America, West, to oppose the original and the revised proposals. Specifically, IFTA has noted the proposals appear to allow the FCC to over-ride provisions of the original licenses between program providers and the cable companies; allow box manufacturers to include a search function displaying both licensed titles and those available illegally on the open Internet; and – at least in the original proposal – allow box manufacturers access to and use of subscriber and viewer data arising related to the cable companies’ programming feeds. These defects would unsettle underlying contracts and otherwise destabilize the production and distribution of independent content.    
 
The U.S. Copyright Office has also weighed in on the controversial proposal through a letter stating that, “The Office’s principal reservation is that, as currently proposed, the rule could interfere with copyright owners’ rights to license their work as provided by copyright law, and restrict their ability to impose reasonable conditions on the use of those works through the private negotiations that are the hallmark of the vibrant and dynamic [multichannel video programming distributor] marketplace.”
 
The FCC Commissioners were scheduled to vote on the revised proposal at the Commission’s Open Meeting last week (September 29). In a last minute announcement, the Set-Top Box Order was removed from the Meeting’s Agenda with the Chairman stating that the Commissioners are still working to resolve the remaining technical and legal issues with the revised proposal. It’s widely suspected that the removal was triggered by the lack of a majority vote of the five-member Commission for the revised proposal to be approved.
 
The current proposal will remain under consideration by Commissioners. However, as a result of the delay, there have been renewed calls on the Commission to make the revised proposal available for review and further public comment.