|Last night, HBO’s wildly popular Game of Thrones returned for its sixth season. We won’t provide any spoilers for those who haven’t yet watched the show but we will highlight an aspect of the show that is important for tech policy and the FCC’s set-top box mandate. That aspect is how the show can be watched via so many sources, from different providers, as part of different packages and on many different devices.
Last night, you could have watched Game of Thrones via the following devices besides the TV in your living room–smartphones, tablets, smart TVs, streaming set-top boxes like Roku, game consoles, or other connected devices. And with the HBO Now app, you wouldn’t even need a pay-TV subscription to enjoy Game of Thrones or other HBO content. To say that the video market is undergoing a tremendous transformation that is benefiting consumers would be a massive understatement.
So how does this relate to the FCC’s set-top box proposal? Because while the marketplace and consumers have moved into a world of apps in which people can view pay-TV content without a set-top box, the FCC is attempting to force consumers to stay in the world of boxes with a proposal that looks to the past.
Comments were due last week on the FCC’s proceeding and NCTA weighed in with a 394 page filing that highlights not only the practical and rational reasons that the FCC should drop its proceeding, but includes significant legal, technical and economic analyses that highlight the significant failings of the FCC’s approach.
The bottom line? The FCC has chosen to move forward with a plan that would force TV providers and programmers to dismantle their services for third party companies to repackage, reuse and exploit at their will without having to pay for that content, and with complete disregard of the copyright and contractual agreements. This new mandate will not only hurt programmers, creators, designers, and TV providers, but the millions of customers who are benefitting from the explosion in television innovation.
The key areas where the FCC proposal fails includes:
By allowing pay-TV service to be broken up into different pieces that any retail device manufacturer or app developer could re-create, the FCC proposal discounts any licensing agreements between pay-TV operators and programmers and provides no guarantee that programming won’t be altered or discontinued.
Allowing third parties to restructure channel positions, delete networks, or replace advertisements, would especially unduly harm minority programming, independent entrepreneurs and new networks that are struggling to gain an audience.
The FCC proposal would still require that consumers have a pay-TV subscription and prices would increase due to the costs to establish new standards, clear intellectual property rights, and to develop, deploy and test new equipment. Plus, quite remarkably the FCC is proposing to prohibit pay-TV providers from offering free or lower cost set-top box rentals!
Privacy and Security Violations
The FCC proposal also practically invites every device manufacturer and app developer to track the viewing habits and records of consumers, including those of children, so that advertisers can insert their messaging into the programming they watch. Additionally, the security systems that protect consumers from service theft and malware would be dismantled, exposing anyone to spam or viruses and enabling high-value content to be pirated more easily.
Ignores Marketplace Reality and the Apps Movement
The expansion of apps has not only given customers more choice and flexibility for watching their favorite shows, but means that many consumers will not need a set-top box at all. As Time Warner Cable CEO Rob Marcus said, “Where we’re headed is the ability of customers to access the complete video product without having to rent a set-top box from us, whether they use a Roku or they use ultimately another IP-enabled device.”
And pay TV’s commitment to a future without boxes isn’t just a hollow promise. Besides Time Warner Cable, Charter is enabling customers in some markets to watch programming without a set-top box. And just last week, Comcast announced that its customers will soon be able to access their entire Xfinity lineup using only Roku and other streaming players and new Samsung Smart TVs. Marketplace agreements like these are bound to multiply and deliver real results much sooner than any convoluted and controversial FCC mandate.
The only spoiler alert in this blog is that winter is indeed coming for set-top boxes. And the only one who doesn’t seem to know it is the FCC.