After Massive Cable Industry Lobbying And Disinformation Effort, The FCC Is Forced To Weaken Its Cable Box Reform Plan

Failures

from the disinformation-nation dept

Back in February, the FCC approved a new plan to bring some much-needed competition to the old cable box, resulting in better, cheaper, and more open hardware. But fearing a loss of control (and $21 billion in annual cable box rental fees) the cable industry launched an unprecedented lobbying campaign featuring an endless barrage of editorials attacking the plan for encouraging piracy and even being racist. The cable industry even managed to get the Copyright Office to fight on its behalf, spreading false claims that the plan would “harm copyright” despite having really nothing to do with the subject.

This lobbying and disinformation plan caused several of the Commissioners who voted yes on the plan to unfortunately waffle on the original proposal. As such, FCC boss Tom Wheeler had to return to the drawing board, and is cooking up a heavily modified “compromise” plan that would focus on forcing cable providers to provide their content via an app:

The purpose of the proposal would be to make apps more ubiquitous across streaming devices, and allow subscribers to forgo the cable box altogether. Wheeler has criticized the industry for collecting monthly rental fees for their set-top boxes from consumers, even after the cost of the devices have been recouped.

The proposal would require that cable companies make their apps available to other devices, such as smart TVs and gaming consoles, according to sources familiar with the plan and filings from industry representatives.

Wheeler appears to be cooking up a plan that looks a lot like an underwhelming cable industry counterproposal circulated back in June. But as we noted at the time, providing content via tightly-controlled apps isn’t the same thing as open hardware, and isn’t all that different from what the cable sector offers today. Such apps usually are just as tightly controlled and restrictive as the cable boxes they’re meant to supplement or ultimately replace.

The cable industry has also strongly hinted that if it’s forced to offer programming via app, it will just seek its pound of flesh in other ways — such as charging consumers a new fee if they want to record and store content via cloud DVR. And while the FCC’s plan hasn’t been released yet, consumer groups and hardware vendor groups like INCOMPAS worry that an “app-based” proposal could simply swap out one ham-fisted attempt at control with another.

Given the cable industry spent millions to successfully manipulate the press, public, politicians and The Copyright Office to protect its anti-competitive cable box fiefdom, you’d think it would be happy about its success in weakening the FCC proposal. But the sector is still complaining, and is worried that the FCC would still be able to dictate terms of their license agreements with streaming box manufacturers like TiVO or Google:

“Cable operators and media companies also are suspicious of a proposed new FCC process for licensing their apps to device makers, viewing it as a chance for the FCC to meddle in their contracts. The FCC?s ?updated proposal will unequivocally fail if there is a possibility of governmental or other third-party intervention in the programming rights, obligations and restrictions negotiated by program suppliers, broadcasters and [cable firms],? the National Association of Broadcasters said in written comments to the agency Friday.”

Again, if the cable industry is forced to kill the cable box and shift its content to apps, it’s going to want to develop all manner of creative new ways to recoup that $21 billion in lost cable box rental fees. Whether that takes the shape of a $20 per month DVR recording fee or a $10 per month “because we said so” fee isn’t clear, but it is very clear the cable sector doesn’t want the FCC policing how these apps are licensed and presented. It took no time at all for stories to pop up online proclaiming that the FCC was on a power-hungry quest to create a “copyright licensing office within the FCC”:

“Instead, FCC Chairman Tom Wheeler is now considering the creation of a copyright licensing office within the FCC, replacing complex separate arrangements with device manufacturers with a single contract overseen and possibly written by the Commission?s staff….It would also unilaterally substitute the FCC for the Copyright Office in establishing and enforcing compulsory licenses for programming, without any indication?let alone legislation?from Congress authorizing such a radical shift.

But like so much said about the FCC’s plan over the last seven months, that’s simply not true. The FCC would primarily act to ensure the cable industry didn’t just supplement one bad idea (the locked down cable box) with another (apps saddled with onerous restrictions and fees), which is a pretty far cry from an entirely new copyright apparatus being forged in the belly of the FCC. And again, contrary to the Copyright Office’s claim, this debate has absolutely nothing to do with copyright, and everything to do with control.

If the FCC can’t get its own commissioners to support a meaningful cable box reform plan, it may not be worth the fight. A regulator-mandated attempt to replace the cable box with a half-cooked app-based approach may just deliver more of the same shenanigans in a different hat. An easier path may be for the FCC to give up on cable box reform, let the pay TV sector evolve or die organically, and focus its efforts on the biggest problem of the streaming video age: the lack of broadband competition and all of the anti-competitive chicanery (usage caps, net neutrality violations, zero rating) such dysfunction enables.

Filed Under: competition, copyright, copyright office, fcc, set top boxes