FCC's New Pay-TV Plan: Shove It Up Your App

MariNation Mari Silbey, Senior Editor, Cable/Video 9/9/2016

They say it's a good compromise when nobody walks away happy. If that's the case, then the FCC's new pay-TV plan is the best compromise ever.

The new set-top -- wait, scratch that -- TV apps proposal backs down entirely from the Federal Communications Commission (FCC) 's original "Unlock the Box" manifesto. Pay-TV operators get two years to wall up their video services behind closed apps (instead of making the video accessible to other hardware and software companies) and no third-party company can touch the user interface. More than that, though, it appears that only the pay-TV operators themselves can offer any kind of DVR feature... usually through a set-top box.

In the 1990s, this would have been like forcing people to buy VCRs from their cable company. And for those who weren't sentient in the '90s (which basically isn't anyone reading this post because everyone in telecom is old), there was actually a time 20 years ago when you could record anything on TV, carry it around with you and fast forward through commercials at your leisure.

Yet despite pay-TV operators getting most of what they want, they're still furious about the parts of the FCC plan that might cause them heartburn. Namely, pay-TV companies are mad because it sounds like they might have to go through a new licensing body to ensure their apps are standardized for availability on a number of platforms, e.g. Roku, Amazon Fire TV, Apple TV, etc. (See The FCC & TV Apps: It's Complicated.)

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To be fair, the FCC is at fault for not providing any details on what the licensing process might look like except to say that "programmers will have a seat at the table" and "the license will not affect the underlying contracts between programmers and pay-TV providers."

How does that work? If it's a standard license, will pay-TV companies be required to make a single app available to all eligible platforms? How will one app work for everyone unless it's HTML5, which the FCC says isn't a requirement? Will Roku Inc. be able to demand that operators create native apps for its operating system, which apparently works on razor-thin margins that would be hurt by HTML5 apps? And if there's no single app for each pay-TV service, then who is responsible for ongoing development and upgrades to apps across multiple TV operating systems?

There are other confusing areas too. For example, the FCC makes a big deal about enabling integrated search across pay-TV and over-the-top video services. But then it says "This means consumers will be able to search their programming options in one place whether from their pay-TV provider, an over-the-top service or a programmer's standalone app." Does that mean that as long as Comcast Corp. (Nasdaq: CMCSA, CMCSK) offers unified search in its pay-TV app, it doesn't have to make its content available for search within, say, the Apple TV UI? That would certainly give Comcast's user interface an advantage.

I could literally go on ad nauseam about all of the problems with this debate. Outrageous rhetoric on all sides? Check. Intractable stubbornness? Check. Over-simplification and obfuscation of the important issues? Check.

In fact, I have gone on ad nauseam. See links below.

But think about this. If somehow when TV first started to make the migration to IP someone had defined a bundle of IP video streams as separate from the pay-TV service wrapped around it, we wouldn't be in this mess. Ideally for consumers, as long as security and privacy protocols are in place, any hardware or software developer should be able to build their own user experience around the pay-TV bundle. We should be paying our service providers for the actual content, but we should have the option of also paying a hardware or software company for a unique interface and innovative features.

It's too late for that now. But boy it sure would have been nice if we could have avoided this mess.

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