FCC chair moves toward looser rules for set-top boxes

by David McCabe - 01/27/16 1:52 PM ET

The chairman of the Federal Communications Commission (FCC) on Wednesday moved toward setting new rules that agency officials say will make it easier for consumers to use a variety of devices to view video through pay-TV services.

Most consumers currently watch pay-TV content through a box rented from their provider, such as a cable company, satellite provider or other telecommunications firm.

{mosads}The rules floated by the commission would let other companies manufacture devices to deliver that video content — opening up the market to new companies and potentially striking a blow to the billions of dollars in revenues providers bring in through the boxes.

Under the proposed rules, video providers would have to offer device makers the video content itself as well as information about which programs are available for consumers to watch and what they can do with that programming.

The commission claims its proposal would continue to protect the privacy of data related to users’ video-viewing habits.

Senior FCC officials said Wednesday that the intention was simply to unlock data currently confined to set-top boxes for use by other device manufacturers and that the proposal raised questions about how best to maintain the privacy protections included in the current system. An official also noted that companies remained bound by state and federal laws regarding privacy.

Critics of updating the rules have suggested that it could make it harder for video providers to protect their intellectual property.

The FCC has said the item circulated Wednesday proposes requiring video providers to offer a “content protection system that is openly licensed on reasonable and non-discriminatory terms.”

The action announced Wednesday will not bring immediate changes for consumers. FCC Chairman Tom Wheeler circulated a notice of proposed rule-making — a first step toward setting new regulations — to the four commissioners at the agency, who will vote on the item at a meeting in February.

A later vote would be required to actually adopt new rules, although a senior FCC official declined to say when that vote might take place.

Consumer advocates have called for reforms to the set-top box rules because they say providers are currently able to essentially price-gouge consumers because of their power over the marketplace. The commission argues that more competition would lead to lower prices for consumers.

It remains to be seen which companies might look to build devices to compete with the boxes offered by providers, though both TiVo and Google have supported updating the rules.

But some argue that FCC action on set-top boxes would upend the video marketplace and hurt consumers. A coalition launched Wednesday to oppose the proposal, led in part by the cable industry, claims that consumers would lose the privacy protections offered by their television providers.

Wheeler made it clear Wednesday that he will paint the rules as good for consumers — and not a major blow to the paid-TV industry.

“The new rules would create a framework for providing device manufacturers, software developers and others the information they need to introduce innovative new technologies, while at the same time maintaining strong security, copyright and consumer protections,” he wrote in an op-ed on ReCode.

“Nothing in this proposal changes a company’s ability to package and price its programming to its subscribers, or requires consumers to purchase new boxes.”

Tags FCC Tom Wheeler