In a marked shift from its
initial proposal, FCC Chairman Tom Wheeler announced on
September 8 that later this month the FCC would be considering new rules to require cable
operators to create apps that could be used on competitive
television set-top boxes, permitting customers to purchase their
own boxes and avoid renting from their cable and satellite TV
The FCC's original proposal, released in February, would
have required (1) cable operators and other multi-channel video
programming distributors ("MVPDs") to make various data
flows available to providers of competitive equipment (including
information about the programming available to the customer,
information about how the customer can use the content provided by
the MVPD, and the content itself); (2) MVPDs to support content
protection systems developed by third party organizations; and (3)
competitive equipment providers to comply with various FCC
requirements for public safety, privacy, and children's
advertising. The February proposal would have left channel
placement and advertising to be governed by "marketplace
The new proposal, based loosely on a compromise suggested by the cable industry in
June, abandons the "data flow" approach. Instead, the
rules would require MVPDs to develop apps that can be deployed on
consumer equipment, such as Roku, Amazon Fire TV Stick, AppleTV,
and Chromecast. Under the proposed rules:
MVPDs will be required to offer free
apps to allow their customers to have access to video content on
competitive devices and other platforms.
Apps will support "widely
Apps will permit integrated search
across all of the content available on a platform or device, and
must not require the pay-TV provider's content to be promoted
ahead of other programming.
Apps will be required to make it as
easy to access programming as it would be on a standard set-top
Existing content distribution
agreements will be unaffected.
Apps will be required to comply with
existing FCC rules governing emergency alerts, privacy, and
accessibility for people with disabilities.
Large providers will get two years
for implementation; medium-sized providers will get four years; and
operators with fewer than 400,000 subscribers will be exempt. The
announcement did not define the line between large and medium-sized
One of the most contentious elements of the new proposal also
calls for development of a "standard license" that will
govern how an app can be placed on a device or platform. One
express purpose of the license is to protect the rights of
programmers and other content owners, while facilitating access to
the programming apps. It appears that this license will be
negotiated among MVPDs, programmers and device and platform
developers, with the FCC acting "as a backstop" to ensure
that the standard license will not "harm the marketplace for
While this proposal signals an apparent shift towards the cable
industry's compromise position, it does not mean that the cable
industry or other interested parties agree with the proposal.
Notably, MVPDs continue to support rules that require development
only of HTML5 apps, rather than apps that support multiple
platforms, and are opposed to the proposed "standard
license," arguing that there are legal and practical
constraints that make that approach impractical. Programmers also
are concerned that the standard license or other requirements in
the rules could have the effect of changing the terms of their
agreements with MVPDs. Programmers have argued that the FCC lacks
the power to establish what they describe as a "compulsory
license" for third party use of their programming content.
Although there is strong Republican opposition to this
proceeding and to adopting any rules (indeed, Commissioner
O'Reilly described the proposal as appearing "to exist in a fantasy world"), it is
likely that the proposal or something close to it will be adopted
at the FCC's September 29 public meeting. In particular, this
approach addresses some of the concerns raised by Commissioner Rosenworcel
when the FCC first opened the proceeding, and it is unlikely that
Chairman Wheeler would have released it if he did not believe he
had support of all the Democratic commissioners.
If adopted, the proposed rules will have no immediate effect, as
MVPDs will not be required to offer an app for two years after the
effective date. In addition, apps likely will not be available
until the "standard license" negotiations are complete,
which could delay implementation. The rules also likely would be
challenged in court by programmers or MVPDs. Nevertheless, the new
rules could result in significant changes in the consumer equipment
marketplace, which to date has been relatively dormant, with nearly
every MVPD subscriber using equipment obtained from the MVPD.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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