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FCC Ready to Rule on Set-Top Overhaul: Report

Mari Silbey
1/27/2016
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It's been several months since an advisory group submitted its report to the FCC with recommendations on how to open up the set-top market and give consumers more choice around how they watch pay-TV services.

Today, the Wall Street Journal reports that the Federal Communications Commission (FCC) is ready to rule on those recommendations with a decision that will cheer open set-top advocates like Google (Nasdaq: GOOG) and TiVo Inc. (Nasdaq: TIVO), but greatly anger the pay-TV operator community.

The FCC has not yet responded with comment, but word from the WSJ is that Chairman Tom Wheeler will announce a proposal that demands pay-TV providers unlock their video streams from the current boxes they run on. That in itself is not a major problem for operators who argue they're already creating apps that run on third-party devices to accomplish the same goal. However, the implication in the WSJ report is that pay-TV providers will also have to separate their video streams from the program navigation guides they're currently tied to. On that point, operators are vehemently opposed. (See Content Security Battle Threatens TV Upheaval.)

Pay-TV providers argue that their services are composed of more than just video streams, and that separating the navigation component from the video content itself would both invalidate existing contracts with programmers and put an unfair burden on operators needing to meet a new regulatory mandate. On the contract front, operators say that how content is positioned in their guides is a major part of program licensing negotiations. On the issue of creating undue burden, operators point out that they would need to develop a new hardware adapter to support the proposed FCC mandate in some consumer households, which would inevitably raise costs both for themselves and for consumers.


For more on TV technology trends, check out our dedicated video services content channel here on Light Reading.


In rapid response to news that the FCC is ready to hand down its ruling, a new group called the Future of TV Coalition announced itself and stated its intention to fight any mandate seeking to implement what has become known as the AllVid proposal. Leading the coalition of 47 members are Alfred Liggins, CEO of TV One , and Nomi Berman, President of Bright House Networks .

The great set-top debate has its roots in content security technology, which for years limited who could successfully make and sell set-tops. The FCC formed the Downloadable Security Technology Advisory Committee (DSTAC) in early 2015 with the hope of finding a content protection solution that would make it easy for third parties to innovate on the pay-TV experience. The DSTAC debate, however, quickly moved beyond security and toward the issues of both proprietary hardware and proprietary user interfaces. By the time the DSTAC group disbanded, there were two very different proposals on the table and clear evidence that any decision by the FCC was bound to create ire.

There is further context for the current debate in the history of the CableCARD and the FCC's 2007 ban on integrated set-top security. That regulatory mandate was supposed to create a thriving retail set-top market, but while it proved highly beneficial for TiVo, it did not succeed in creating much of a competitive set-top environment. Technical and operational challenges both contributed to CableCARD's failure, and the cable industry is still bitter about the money operators had to spend to comply with the FCC's rules.

Light Reading has written many, many times about the pay-TV set-top saga. For more background and analysis, see these stories:

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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msilbey
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msilbey,
User Rank: Blogger
1/28/2016 | 9:29:06 AM
Re: FCC AllVid proposal is now in circulation
I'm not entirely sure what the FCC is going to demand from a technical standpoint, but the proposal coming out of the DSTAC group was fairly specific. I'm going to dig back into it and reach out again to some of the authors.
KBode
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KBode,
User Rank: Light Sabre
1/28/2016 | 9:11:54 AM
Re: FCC AllVid proposal is now in circulation
My understanding is that the original AllVid proposal was far more specific and strict? This proposal seems pretty vague, especially parts mandating that cable companies can use  "any published, transparent format that conforms to specifications set by an independent, open standards body."
msilbey
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msilbey,
User Rank: Blogger
1/27/2016 | 3:55:52 PM
FCC AllVid proposal is now in circulation
The FCC has now released an announcement saying Chairman Wheeler is circulating a Notice of Proposed Rulemaking (NPRM) that essentially adopts the AllVid proposal. The NPRM will go to vote on February 18. Let the hysteria begin.

Announcement is here: http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0127/DOC-337449A1.pdf 
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