From “Yay” To “Boo” To “Shrug,” Here’s What Everyone Had To Say About FCC’s Set-Top Box Proposal

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When the FCC voted in February to consider new rules for your cable box, that kicked off a multi-month cycle of public comments, where anyone and everyone can have their say. The deadline for the first round struck at midnight Friday, which means most of the comments are just rolling onto the internet for all and sundry to have a look at.

There are more than 28,000 comments filed so far in the proceeding (16-42), which is definitely on the “unusually high” side for an FTC proceeding. (A huge percentage, according to our randomish sampling, have come from individuals who clearly responded to an organization’s campaign to submit form comments.)

The comments, as is usual for any FTC proposal, fall into three general buckets. First there are those who approve. Then there are those who strenuously disapprove. And then there are those few who don’t have much to say one way or the other about the proposal, but want to make sure the commission takes one certain thought, facet, or idea into account no matter what they end up deciding to do.

Everything is terrible, the FCC should make it better.

In this corner, we generally have the consumer and digital advocacy groups we’ve come to expect.

Leading the pack, we have the EFF, applauding the FCC’s effort to increase competition in the marketplace and give consumers more device choice. They also push back directly against the cable companies, arguing that MVPDs (pay-TV businesses) “have no statutory or regulatory right to control the end-user interfaces used to access lawfully obtained video content, and the Commission need not create one.”

In short, the EFF is in favor of anything that lets more people apply more security and gives more people more hardware choice:

“All of these developments [in the TV marketplace] make opening MVPD end-user hardware and software to true competition more important than ever. Competition means more than just lowering prices for consumers. It drives innovation in features at every level: in hardware, software, user experience, energy efficiency, security, and cost. It allows consumers to vote with their dollars along many dimensions of preference: ease of use, sophistication of search, recommendation, and program discovery features, integration of multiple sources of programming, respect for privacy, and security, including the ability of third parties to perform security audits.”

Trade group INCOMPAS (formerly known as COMPTEL), which represents a whole big pile of tech and telecom companies, also filed in support. Their comments say that the proposal will increase competition, that the FCC has the legal authority to do it, and that there’s no real conflict with privacy or piracy in the plan as-is.

“Small and new entrants are unable to take advantage of the economies of scale that incumbents use to incentivize set-top box manufacturers that focus on large device orders for their nationwide networks. In the absence of competition, incumbents have used this monopolistic power to stifle innovation and require their customers pay an exorbitant monthly fee to rent a device that only evolves as and when they choose.”

CableCARD was a great start, they add, but it can’t work in the IP (broadband/internet) era and so the program “requires a successor.”

Advocacy group Public Knowledge also filed comments in favor, arguing that the FCC does have authority to act; that the Commission should take action; that increasing competition benefits consumers, content creators, and distributors; that in fact taking action will reduce copyright infringement; and that the FCC needs to move fast and block MVPDs from screwing with the proposal.

“By moving forward on its proposal to allow subscribers access to their pay TV subscriptions on the devices and apps of their choice, the Commission can save viewers money while ensuring they can choose from better and more modern alternatives. By fulfilling its statutory mandate to promote a video device market where viewers can choose to use interfaces, apps, and devices from companies unaffiliated with MVPDs — that is, not just from third parties, but from technologists and innovators who have not cut deals with, or cleared their business models with the MVPDs they are proposing to compete with — the Commission will unleash innovation, competition, and cost savings on a stagnant marketplace.”

And on top of that, we have the White House and, last but not least, all those form comments, which read in full, “A cable subscriber pays over $200 per year to rent a box from the cable companies that are already protected by government. This kills competition, limits consumer choice, and lifts up cable profits that are already excessive. Allow the free market to work and unlock the box to open competition and end the monopoly that cable companies have over our televisions.”

Everything is fine, the FCC needs to butt out and stop making it terrible.

And in this corner, we have the incumbent industry: cable, telecommunications, and film/TV/music businesses and trade groups.

Comcast / NBCUniversal is, of course, against. Their comment is 164 pages long, but generally summarized says (1) the world is fine, everything is fine, why change, (2) the FCC doesn’t have the authority to do this, (3) trying to do this is in violation of a ton of laws, (4) doing this will cost us money, (5) doing this will make piracy rampant and destroy privacy, and (6) changing rules stifles innovation. A sample

“The various rationales [the FCC] has put forth to justify the proposed rules quickly collapse upon closer inspection. … This mandate would result in significant harms to innovation, high-quality programming, critical consumer protections like privacy and accessibility, and copyrights and First Amendment rights of [pay TV companies] and programmers, and would impose additional costs on consumers.”

Instead, Comcast sings the praises of commercial app partnerships, like their recent agreement with Samsung and Roku.

Speaking of Roku, they’re against the proposal too. The company’s comments are fairly brief, mostly consisting of assertions that really, the marketplace is fine, look, we’re thriving, we’re innovative, everything is great, let’s not bust this up:

“Roku believes that, rather than accelerate the pace of change and innovation, the Commission’s proposed rules could actually inhibit the transition from traditional programming delivery models [cable] to OTT [internet / streaming] services. Today’s video distribution marketplace is marked by tremendous innovation and rapid change. The proposed rules carry a very real and significant risk of impeding the innovation that is occurring today by replacing today’s market-driven advances that are expanding consumer choice with a lengthy rule-making and standard-setting process.”

The RIAA and others also have a strong statement against the proposed rule. Wondering why the music industry has to put its oar in? It all comes down to copyright.

The RIAA is… generally not the biggest fan of the internet, let’s say. They’ve been sour on the whole idea since a generation of college kids suddenly got handed Napster in 1999, and the broadband era hasn’t exactly allayed those concerns. They like TV as is, because they still get their money: “Licensed streaming over MVPD services reaches tens of millions of American homes and has, at least thus far, remained a relatively secure space largely free from the content theft that has plagued the distribution and exploitation of music online,” the trade group writes.

“The Commission’s proposal could extend some of the worst aspects of the online environment — which have done and continue to cause incalculable damage to the music community — to the relatively secure environment of MVPD programming in the home. Replacing a distribution chain that today is manageable through a combination of contractual and statutory terms and conditions with a large, dispersed group of third parties lacking similar incentives to abide by terms and conditions would threaten a market that otherwise functions well. … In sum, this proposal is likely to result in significantly reduced protections for music delivered via MVPD services and hinder, rather than promote, a healthy, innovative MVPD-based music ecosystem.”

The NCTA, the big trade group that represents all the cable and telecom operators, is, of course, ardently opposed to the measure. In their comment (394-page PDF), the group systematically goes after every possible aspect of the proposal. General arguments include: the market is fine; the proposal will kill innovation and competition; the proposal is “divorced from market realities’; the proposal will wreck copyright protections and make piracy rampant; TV is now in its golden age and the FCC will ruin it; the proposal will reduce consumer choice; the proposal will increase consumer costs; the FCC has no authority for this proposal anyway; and seriously, just stick with cableCARD.

The NCTA’s member companies, of course, stand to lose that sweet, sweet set-top box rental feel revenue — somewhere between $13 and $20 billion per year — if the FCC moves forward with the proposal, so it’s no wonder that they would be so angry at the idea.

The organization writes:

“The [proposed rule] proposes a new and deeply-flawed government set-top box mandate that jeopardizes the entire ecosystem that is producing a Golden Age of Television. Given the record of costly FCC-mandated failures that delated innovation, the Commission should recognize that there is no need for its headlong rush into more technology mandates in a vibrant and healthy marketplace where consumers can access multichannel and online video content on a wide and growing array of retail devices.”

Also voicing opposition are Dish and EchoStar, asserting that not only is this a bad idea in general but also specifically ultra terrible for satellite TV providers, i.e. them. The bulk of the comment from Dish spends time pointing out why satellite is different, before also adding in solidarity that actually the proposal is terrible for all those cable and telco companies, too.

“The regime proposed in the Notice is deeply flawed. For example, although it recognizes that the one-way architecture of satellite MVPD systems presents unique challenges, it nowhere attempts to even propose solutions to accommodate those differences that would enable satellite operators to comply … The Commission cannot adopt rules knowing that regulated parties serving one third of the market could not comply. … The Commission cannot lawfully adopt its proposed regime without — at a minimum — proposing rules to accommodate the recognized differences in satellite architecture and allow informed comment, or exempting satellite providers from the new regime altogether.”

The Future of TV Coalition, a group consisting generally of existing set-top box manufacturers and pay TV companies, also submitted a petition, signed by about 17,000 people, strongly against the proposal.

Do whatever you want, just consider…

The big bugaboo in our “do whatever” bucket this time around is privacy, and specifically protecting consumers and their data. Although others (like the EFF) also spent part of their comments discussing privacy and security issues, two comments in particular stood out as having that focus.

One is from the FTC, which is the agency with the most responsibility for protecting consumers’ privacy in physical and digital business alike. The FTC, predictably, wants consumers to be given as much protection — and as much information about that protection — as possible, whatever the FTC does:

“I [FTC commissioner Jessica Rich] propose that if the FCC adopts the rule, MVPDs should require that third-party set-top box manufacturers represent to consumers, as well as to MVPDs, that their products comply with the cable and satellite statutory privacy provisions. Such a representation would be analogous to manufacturers voluntarily committing to a privacy code of conduct. … The FCC’s proposal that cable and satellite companies require third-party set-top box manufacturers to certify compliance with the same protections applicable to cable and satellite companies will provide valuable privacy protections for consumers.”

The other comment focused specifically on privacy protections comes from the Digital Citizens Alliance, an advocacy group concerning itself with IP (copyright) protection and individuals’ online safety in the digital world.
They write against the current proposal — not on the grounds that the cable companies use, but specifically saying that the rule, as proposed, would fail to protect consumers from hackers or device malfunction, would increase consumers’ exposure to malware and spyware, and “would allow new and uniquely invasive advertisements into consumers’ living rooms.”

“Navigation devices have access to sensitive personal information that can give hackers a look into our living rooms and our lives … In addition, when connected to a smart television or other advanced device, navigation devices could be used to record and transmit audio, video, or images — literally becoming ‘eyes’ and ‘ears’ in consumers’ living rooms. The risk that hackers would be able to use navigation devices to obtain access to sensitive personal information is high. … Like the smart televisions they connect to, navigation devices are ‘always on,’ ‘vulnerable,’ and ‘waiting to be attacked.'”

Now what?

The public comment period for any FCC proceeding is actually a few connected periods, and only the first one is over. Now everyone gets to argue against the comments that have been submitted, in addition to arguing against what the FCC actually proposed. The current set of deadlines (PDF) gives the reply comment period another month — until May 23 — to wrap up.

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