FCC’s Set-Top Box Proposal Still Plagued by Copyright and Privacy Concerns

Posted by: Bob Quinn on September 8, 2016 at 5:04 pm

The FCC’s latest set-top box proposal has recognized what we have been saying all along – apps are the future and, in fact, the here and now. Apps are how consumers watch television today and how Hulu, Amazon and Netflix have created their businesses. Apps allow innovation to flourish, while protecting privacy, security and copyright. Yet, while outwardly embracing apps, the Chairman’s latest proposal undermines those fundamental protections that an app environment provides by requiring disclosure of entitlement data, by creating a new licensing body that the FCC will oversee, and by extending their rules beyond set-top box replacements to mobile apps. Because the new and improved proposal raises many of the same copyright and privacy concerns as the original Google Fiber-backed proposal pitched last January, it should be discarded.

First, let’s unpack the privacy implications. While the new proposal states that existing privacy protections will be preserved, it also requires pay-TV providers to disclose “entitlement” or subscription data to third-party box (or app) providers. In other words, the FCC would require video companies like ours to tell third parties like Google Fiber exactly what channels each customer is “entitled” to receive – despite the fact that video companies are statutorily prohibited from making those disclosures without customer consent.

To get around the statutory privacy protections, the proposal says that a customer can “opt in” to such disclosure. This, however, raises more questions than it answers. To whom do they opt in? What disclosures must we provide to get consent? Can Google Fiber share that data with its affiliates? What happens to a consumer’s private right of action that is statutorily guaranteed? Who enforces this regime? What if the consumer buys the box or app and then opts out?

Presumably, like the old proposal, the data stream itself (which doesn’t exist today) will have to utilize a technology that must be created using a standard yet to be determined and issued by a standards body yet to be identified. The only thing certain is that consumers have to have it in two years. Sound complicated? You honestly need a flow chart to follow this. The lack of answers to these same fundamental questions at this stage of the proceeding is disturbing, to say the least.

Second, rather than allowing the MVPDs to enter into license agreements with third parties’ competitive navigation device providers, as they do today, the FCC is concocting a separate licensing body that would create (dictate) a single, one size fits all license to cover all apps and all MVPDs. This licensing body would create the terms of the license (and be the sole enforcer of the license), but the FCC would state up front what terms need to be included and would review the licensing terms, striking out what terms they do not like. While the new proposal states that the FCC will only serve as a backstop, the reality is that the FCC reserves the right to dictate and approve the terms of the license. Exactly the flaw that led the Copyright Office to declare the original Google Fiber proposal a non-starter, stating that it did not “respect the authority of creators to manage the exploitation of their copyrighted works through private licensing arrangements.” By usurping the free marketplace and the rights of the content creators in this regard, the FCC has in effect (as the programmers, NAB and NCTA have also stated) created a “compulsory copyright license,” clearly outside of the FCC’s jurisdiction.

The licensing body is not even necessary. Under the proposal submitted by pay-TV distributors and leading independent programmers, an equipment manufacturer would need to go to only eight different MVPDs to enter into essentially a form agreement for an HTML-5 app (or choose to do a B2B deal with those MVPDs).   Contrast that to the 3,400 apps that Roku has on its system and the at least hundreds, if not thousands, of apps other devices have. Accepting licenses from eight additional parties can hardly be a burden. This single license would also have to account for technology and business differences among competitive MVPDs and varying app models, differences in the hundreds of underlying agreements between the programmers and the MVPDs, and be able to evolve quickly to account for security and technology developments in a rapid manner. It simply cannot be done.

Finally, despite statutory language which says that the mandate here is a market for competitive navigation devices, i.e. set-top box replacements, the new proposal reaches beyond devices located within the home (and beyond the FCC’s statutory authority) by requiring licenses and data sharing with makers of mobile apps without any finding that the market for mobile apps is somehow failing. All this despite evidence in this record that there are more than 460 million retail devices supporting MVPD apps today.

The industry offered the FCC an approach that would have provided an open platform, protected privacy and copyright, and still allowed business-to-business deals for those platforms that did not want to use HTML-5 technology. To its credit, the FCC accepted an app framework, which seems like a no-brainer since consumers are easily accessing and enjoying apps to view their news and entertainment. However, in its desire to go well beyond the mandate of the statute, it has created a revised proposal that still violates consumer privacy rights and copyright laws. The FCC should focus on the proposal put forth in June without undermining it with these overbroad, highly complicated and unnecessary add-ons.

Read More

Special Access Doublespeak

Posted by: Frank Simone on June 22, 2016 at 10:23 am

I’m often struck by the doublespeak that takes place in DC and, particularly, at the FCC when companies come to the agency to argue that the Commission should regulate their competitors. The Special Access proceeding at the Commission is one of those special dockets that is a real breeding ground for what I like to call “both sides of our mouth” (BSOM) advocacy.  Whether it’s Verizon calling to regulate its cable competitors, BT arguing for lower special access rates than it charges its competitors in England, or Sprint-progeny Windstream arguing to re-regulate everyone’s retail rates but their own, this proceeding is a showcase for that special brand of BSOM advocacy.

But one company truly rises above the rest when it comes to saying one thing to the FCC and another to investors – Sprint.  Not even two months ago, Sprint came to the FCC and argued that it has no choice but to purchase business broadband services from incumbent carriers because only they provide those connections for the vast majority of buildings with business data service (BDS) demand in the country.

Imagine my surprise then when I saw a recent Fierce Telecom article on Sprint’s Ethernet strategy. Once again, a Sprint executive’s candid statements reveal the reality that betrays their FCC advocacy. In the article, Sprint stated that cable business data services, specifically Ethernet over DOCSIS, will provide them with a competitive alternative to existing special access services and fill out an Ethernet footprint that covers “95 percent of the country.” Yet at the Commission, Sprint continues to discredit cable DOCSIS services as an alternative to incumbent carrier special access services.

Read More

AT&T Statement on Bogus
Set-Top Box Privacy Complaint

Posted by: AT&T Blog Team on June 9, 2016 at 12:14 pm

The following may be attributed to Jim Cicconi, AT&T’s Senior Executive Vice President of External and Legislative Affairs:

“AT&T’s use of anonymous and aggregate set-top box information is entirely consistent with the statute. Our disclosures tell our customers exactly how we use that data and provide tools for customers to opt out.  Frankly, this complaint is bogus, and seems mainly designed to distract the public from the overwhelming bipartisan opposition to the FCC’s controversial set-top box plan.  That plan itself will erode existing consumer privacy protections, not to mention its many other harms.  Because the plan’s few remaining supporters have no answer to that charge, they’ve decided to invent a false privacy claim.  This smacks of desperation, and it also carries the whiff of hypocrisy.  It’s further proof, if any is needed, that the plan’s supporters have lost the public policy debate on this issue.”

Read More

Regulation over Innovation…Again?

Posted by: Bob Quinn on May 6, 2016 at 1:43 pm

Yesterday, 60 members of Congress joined an already significant chorus of bipartisan Congressional voices questioning the impact that Google’s set-top box proposal will have on consumers and the broader video marketplace.  This time the focus was on the negative impact the Google proposal would have on the ability of smaller/rural video providers to continue innovating and investing in the intensely competitive video marketplace. For those keeping score at home, 154 members of Congress have now written to FCC Chairman Wheeler to express their concerns about the Commission’s proposed rulemaking, which recommended adopting the Google set-top box proposal in a 3-2 party-line vote back in February.

The concerns raised in these letters are not, however, party-line concerns; they run the gamut from infrastructure investment and innovation, to the disparate impact the proposal would have on minority programmers, to privacy, to copyright and piracy.  When Chairman Wheeler first discussed recommending the Google set-top box proposal back in January, he assured lawmakers that  minority programming would be enhanced and not harmed, copyright would be protected, existing privacy regulations would continue to apply and the proposal would not impact the capability of broadband and video companies to continue to invest in infrastructure.  Given the chance to review the actual FCC proposed rulemaking, however, it is now apparent to everyone that none of those concerns were seriously addressed in the item.

One of the main issues raised by minority programmers and broadcasters was whether the contractual provisions between the programmers and video distributers (the cable or satellite company), which governed terms like channel placement and advertising, could be enforced on third-party set-top box and application providers.  That specific issue was not addressed by the FCC, which rather summarily concluded that because rules had not been necessary in a CableCard regime, none should be necessary here.  Similarly, while copyright was listed as a priority, no real solutions were proposed and there was no answer whatsoever to the content owners’ concerns that they were being forced essentially to provide content to entities that were not required to enter into contracts with the content owner – thereby denying them one of the main protections in U.S. Copyright law.

Read More

AT&T Statement on Univision and Our Strong Record on Diversity and Inclusion

Posted by: AT&T Blog Team on March 7, 2016 at 6:27 pm

The following may be attributed to Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs:

“We appreciate the statement from Univision’s Ms. Herrera-Flanigan and her recognition of AT&T’s strong record on diversity and inclusion. One point requires clarification, though. U-verse customers did not simply ‘lose access to the family of Univision networks.’ That access was pulled by Univision, despite our offer to extend the carriage agreement temporarily while a new long-term agreement was being worked out.

“AT&T remains committed to Spanish language channels, and we currently carry 78 of them.  We have been and continue to be committed to paying fair, market rates for content so U-verse customers are protected from big increases in their bills.  We continue to hope for a resolution of this matter consistent with those principles.”

Read More

TOPICS: Cable, Consumers
Bookmark and Share