WASHINGTON — Today, FCC Chairman Tom Wheeler released a fact sheet announcing his revised proposal to force cable, satellite and telephone companies (MVPDs) to make their pay-TV video content available via apps — so MVPD subscribers can view that content across all their devices, ranging from third-party set-top boxes to mobile devices and streaming media players, like Roku and Apple TV. The U.S. Copyright Office warned that the FCC’s original proposal would violate copyrights, and the FCC responded by effectively creating an alternative copyright office within the FCC, which will write a new standard license between third-party device makers and MVPDs. The FCC argues that this will increase the availability of third-party set-top boxes under its authority in Section 629 of the 1996 Telecommunications Act, but content owners and MVPDs still have major concerns about the licensing process.
“We applaud the FCC for finally embracing the apps-based proposal championed by industry months ago,” said Berin Szoka, President of TechFreedom. “At least the FCC is now operating within the realm of what Congress asked the FCC to do: focus on the availability of third party hardware. The FCC’s original legal theory was absurd: that it could require MVPDs to make their content available to third-party app-makers because the terms ‘device’ and ‘equipment’ in the statute included apps. Even this Chairman, for all his disregard for statutory text, apparently couldn’t keep making that argument with a straight face. We salute the Chairman for finally doing something he’s never done before: issuing a Further NPRM in a major proceeding he began. Part of being an expert agency is recognizing that the first proposal may not be the best one, and seeking additional public comment through the procedures established by the APA.”
“But the FCC’s approach is still deeply troubling,” said Tom Struble, TechFreedom Policy Counsel. “Historically, the FCC’s role in content matters has been limited to ensuring parties engage in ‘good faith’ negotiations — as with retransmission consent. The FCC could have taken that same approach here: Since set-top boxes are being phased out anyway, MVPDs have a strong incentive in general to get their apps on as many devices as possible. Yet there are a range of issues, especially involving security features, where the two sides might reasonably disagree. The FCC shouldn’t dictate a single, one-size-fits-all answer in those fights — and it didn’t need to. It could have addressed the vast majority of potential problems by standing on the sidelines as a referee (Wheeler’s favorite metaphor), ensuring that the parties play by a fair set of rules, and intervening only when negotiations break down because of bad faith on one side or the other. Instead, Wheeler, true to form, lept to the assumption that the FCC needed to be ‘The Decider.’”
“The FCC kept moving the goalposts here,” said Evan Swarztrauber, Communications Director at TechFreedom. “First, this was about Americans paying too much to rent cable boxes, but the market is already moving away from boxes as unnecessary, except for satellite providers. Problem solved? Not so fast. Then it was about ‘too many remotes’ — consumers might have to consume content via more than one device. MVPDs proposed ‘open source’ apps that can be carried on one-stop-shop devices like Roku. Problem solved? Try again. Then, it was about ‘too many apps’ — consumers couldn’t handle switching between apps on the same device. So, MVPDs made clear they’d enable users to search across apps. Only in the face of overwhelming opposition from across the political spectrum did the Chairman finally re-think his initial proposal. It’s sad, but not surprising, that even Wheeler’s idea of compromise involves declaring himself ‘King of Copyright.’”
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