Exposing Some Myths about
Google’s Set-Top Box Proposal

Posted by: AT&T Blog Team on February 16, 2016 at 10:04 am

By Stacy Fuller, AT&T Vice President of Federal Regulatory

In the set-top box debate that has erupted, there is a clear and widely supported desire to give consumers an alternative to leased set-top boxes.  Everyone wants consumers to have more choices, and we are moving in that direction.

Apps from pay-TV providers are now available alongside apps from streaming services on more than 450 million consumer-owned devices. Our customers can already use AT&T/DIRECTV apps on phones, tablets, game consoles and televisions today, and we intend to accelerate that vision in our drive to mobilize video.  Finding an alternative to the set-top box and creating more paths to innovation is a goal I believe everyone can get behind.

There are also a couple of other areas in which I think everyone agrees.

First, whichever way we pivot, it has to be towards a platform that protects consumer privacy.  Whatever solution we choose, the rules protecting consumers’ data should not vary depending on what company controls the device they use to access our services.  Second, we want to encourage more growth in minority and niche programming, not less.  We must ensure that the minority programming that exists today can be easily found tomorrow.  If such programming is moved to page 3 (or page 30) of the new Google video search, what impact will that have on those programmers and their future?

I thought it might be helpful to shed some light on those issues because there appears to be some confusion about how, under the Google proposal, privacy rules and minority programming would be affected. 

Myth:   Google and others would be subject to the same privacy rules that apply to cable and satellite. 

Fact:    The FCC has not identified any legal authority to impose these rules on third parties, like Google, and other federal and state rules do not set forth the same requirements.

I keep hearing that we shouldn’t worry about privacy because Google will be subject to “similar” rules as cable and satellite, or that they’d be subject to other federal and state rules.  Satellite and cable providers are specifically required under Section 338 and Section 551 of the Communications Act to send detailed privacy notices and obtain prior written consent to use their subscribers’ individual viewing history or other personally identifiable information for things like targeted advertising.  These provisions only apply to satellite and cable. And the “other” federal (FTC) and state rules that may apply to Google and others do not include the same prescriptive requirements.  Consumers have no expectation that different privacy rules apply, depending on which company provides their set-top box.

Even the Consumer Video Choice Coalition (CVCC), of which Google is its largest member, acknowledges that they are not subject to the same privacy rules as cable and satellite.  Rather, CVCC points to the general privacy regulations that apply to all services like Google search or even YouTube. To be clear, the Act’s requirements and the general privacy regulations to which the CVCC refers are not the same things.  If the Commission is now saying they will impose the Act’s requirements on others, I can assure you there will be a question of whether the FCC has the authority to do that.  We already know what the Google proponents think.

Myth:   The Google proposal will protect and enhance minority programmers and programming. 

Fact:    According to proponents of the Google proposal, they are not bound by the terms of programming contracts that govern channel placement and advertising. 

Minority programmers are worried that existing advertising revenues (which are the dollars they use to create their content) will be significantly impacted by the Google proposal.  They have questions about whether the new regime will result, for example, in their channels being moved to places that make their content harder to find, leading to fewer eyeballs and less advertising.  Those are the kinds of complaints that small companies have every time Google changes its search algorithm.  They’re also concerned that Google could run overlay ads, insert new ads or replace their advertising entirely – once again, fewer advertising dollars to create content.

While the pat response to these concerns is to assert that existing content deals between content providers and pay-TV providers (including license terms, such as channel placement and advertising restrictions) will not be affected by the Google proposal, proponents of the proposal have said the exact opposite in this proceeding.

Here are just a few examples…

“[M]akers and marketers of competitive devices cannot be expected to respect private, secret, and temporary pacts between and among MVPDs and content owners.”

[C]ompetitive device providers are not and should not have to be bound to programming contracts entered into by MVPDs to which they were not party.”

“[A]n operator might have agreed to channel numbers and channel line ups but … a lot of those sorts of restrictions that operators have agreed to may not make any sense in a retail place.”

“[D]evice manufacturers, of course, cannot violate contracts to which they are not a party.”

Too many questions remain, and too much is at stake, to plow ahead and let Google’s proposal drastically impact an already competitive and wildly innovative marketplace.  It seems way too early for the FCC to be picking the winners and losers in this debate.  That is why there has been so much concern directed at the Google proposal.  When all the misinformation is cleared away, the apps approach is the best way to achieve our common goal of providing an alternative to the leased set-top box model that ensures privacy rules are followed and that minority voices are heard.

Comments (1)

I can certainly understand the privacy concerns that you highlight related to the “Google Proposal,” as you call it. And yes, the concern over minority programming is an issue that must be addressed. Hopefully any vendor providing set top box service will be subject to the same regulations.
But for a consumer like myself, you have to understand the frustration that companies like AT&T cause us. I needed to replace an old Uverse modem recently, one that I had for a number of years and did not pay a monthly “rental” fee for. The helpful sales agent was very clear that there would be no charge for my new modem — I asked that question several times and received the same answer. My new modem was installed and then, sure enough, a $7/month charge appeared on my bill. I made my decision based on information received from your sales agent, only to find out that the information was incorrect and misleading. Several calls to get my old modem back or have the charge removed from my bill were fruitless. We did receive a credit to cover some of the cost of the new modem, but over the long run, it will end up costing me an extra $84/year. I’d rather buy my own modem, pay one upfront cost, but that isn’t an option.
Consumers wouldn’t be so upset with the current system if we had more options to choose from.

Henry Eakland February 22, 2016 at 11:04 am

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