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FCC Chairman Says Set-Top Box Proposal Will Boost TV Innovation

FCC chairman Tom Wheeler says that a proposal to open up the set-top cable box will make it “easier for consumers to watch TV,” pushing back against industry criticism that the plan would jeopardize copyright and privacy protections or hobble innovation.

In an interview with Variety‘s “PopPolitics” on SiriusXM, Wheeler said that the proposal would merely establish an open platform so competitors could offer their own set-top boxes that consumers could purchase rather than be forced to rent the equipment from their cable and satellite providers.

Cable and satellite companies, as well as groups such as the MPAA, have been slamming the proposal, characterizing it as “non-starter” when it was unveiled last month.

Wheeler, however, said that many of the arguments against the proposal have been in the “extremes.”

“The big kick I get is that AT&T and the cable companies have been putting out statements say, ‘This is going to thwart innovation,'” he said. “And I scratch my head and say, ‘My goodness, let’s see. When it the last time that competition thwarted innovation rather than spurring innovation?’ And you are telling me that a locked down, closed system will have more impetus to be innovative, than a competitive, open system? I think that history shows that it is exactly the opposite of what happens in reality.”

He said that what it could lead to are fewer remote controls and easier navigation, where consumers can “shape television to how they use it.”

The proposal will be brought to the FCC’s next open meeting on Feb. 18. If it passes, there then will be a period for the public to file comments. The commission would then make a final vote on a final proposal.

Wheeler said that the average consumer is paying $231 per year to lease set-top boxes, even after cable and satellite companies have already recovered the cost to make them.

“All we are saying is, ‘Cable operators, you can go ahead and control your product. But have an open platform so that anyone can build a device, and then let’s compete on who can offer the better device.’ Let’s have the cable company say, ‘You want to pay me for my interface, because it does all these things nobody else does.’ Rather than, ‘You must pay me.’ We are just trying to get to that basic American concept of competition.”

He suggested that creating an open platform should simplify the TV experience.

“Why is it there is some programming that I can only get on my iPad? Why can’t I watch it on my TV? Well, the answer is the controllers are incompatible. Well, let’s come up with an open standard, just like we standardized Wi-Fi, and let’s have things that all work together…instead of having to buy multiple different devices to do it.”

He compared the current situation to that of the old days of Ma Bell, when customers were forced to lease their phones. But after AT&T was broken up in the early 1980s, consumers got an array of choices of phones, all of which would work.

He also said that the cable and satellite companies “would not have to change the way they do business,” and could continue to offer their programming in bundles and tiers. He also said that such things as privacy and copyright protections would remain in place. “All we are saying is that they have to make those feeds available to others rather than stopping them at the set-top box,” he said.

He said that nothing in the proposal “says to the cable companies that they have to alter anything about the way they do their programming.”

Wheeler cited 1996 congressional legislation that the FCC ensure that consumers are offered competitive choices for their pay TV navigation.

“The difficulty was, at that point in time, the technology wasn’t very advanced,” he said. “And so you came out with this system called ‘cable card,’ which is what is in place right now. It really wasn’t until 2011 that smart TVs became predominant… All we are saying is ‘We are now at a point in time where technology finally makes it possible to do what Congress mandated 20 years ago.'”

One of the chief arguments made by cable and satellite companies is that there already have been significant advances in innovation in recent years, with an array of over-the-top services as well as the ability of consumers to access channels and their cable lineups on tablets and computers via apps.

“I need only one gateway set-top box  in my home that works with all of our televisions (without additional STBs on each set) through an ‘open standard’ called RVU,” Stacy Fuller, AT&T vice president of federal regulatory, wrote on the company blog this week.

She contends that Google is behind the proposal.

“When you get beyond all the hype, Google and its affiliated proponents of this technology mandate are simply trying to take our competitive service and repackage it as their own, without ever having to negotiate with us or with the content owners with whom we had to negotiate to create our service offering,” she wrote. “It’s akin to the FCC mandating that we get access to Google’s home page (and all of the contract rights and algorithms that go with it) so that we can redesign and rebrand it as our own.”

Asked for a response, Wheeler said, “You know, one of the great things about this debate is that it is always argued in the extremes. First of all, nobody is trying to take control of what AT&T distributes as their television signal. All we are trying to say is that you need to pass information through to competitive providers.”

Fuller also wrote that consumers are going to face higher prices, as well as less privacy protections and safeguards for children — something that Wheeler denies is the case.

“There are privacy protections in place now for what happens on your television and smart TV. There is nothing in terms of children’s protection that is suddenly going to be taken away,” he said. “The allegation has been made that, ‘Oh, we won’t be able to get emergency alerts in weather and a crisis. That just isn’t the case. We’re not redesigning everything. We are just saying, ‘Open it up.'”

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