FCC Chairman Says He’s Open to Changes in Set-Top Box Proposal

FCC Chairman Tom Wheeler told a Senate committee that “the door isn’t closed on anything” when it comes to his proposal to require that cable and satellite operators offer a free app so subscribers can forgo the set-top box.

Speaking before a Senate Committee on Commerce hearing on FCC oversight, Wheeler said that the proposal, currently circulating among commissioners, is in the midst of a “deliberative process” with a vote scheduled for Sept. 28. Commissioner Jessica Rosenworcel, regarded as the swing vote, expressed reservations about a key aspect of the plan.

Studios and a number of guilds have lined up against the proposal, joining multichannel providers. Content companies are objecting to the proposal’s plan for a licensing body, which would be made up of representatives from MVPDs and programming, and would come up with a standard agreement to license the app to device makers.

Studios contend that, because the FCC would have oversight of the licensing body, they could ultimately dictate terms of their own contracts with MVPDs.

The FCC has said that deals between content providers and MVPDs “are not affected by this proposal,” and their copyrights and licensing agreements will remain in place.

At the hearing, Wheeler said that, in meeting with industry representatives over the past few months, it was programmers who asked that a provision be placed in the proposal to make sure that the MVPDs didn’t use the license to try to gain an anticompetitive advantage.

“This was a provision programmers specifically asked [for] and needed to be in to protect their contracts,” Wheeler said.

But Commissioner Michael O’Rielly said that the fear among the content industry is that MVPDs and programmers will be prevented from signing carriage contracts if they do not meet the FCC’s terms for the standard license.

Wheeler said that “if there is a desire to remove the specific provision that Commissioner O’Rielly just talked about, we can do that.”

Wheeler did stress that there is a congressional mandate that the market for TV navigation devices be competitive.

He said that “99% of consumers have no choice, despite the statutory mandate that they have to” have options, Wheeler said. He ran through some of the promises of the cable industry to offer alternatives to the set-top box, but “consumers have seen nothing happen.”

Sen. Claire McCaskill (D-Mo.) asked Wheeler what authority the FCC has to create a licensing body. Critics have accused the agency of trying to create a compulsory copyright license.

Wheeler said that that in making the proposal, their goal is “not to write copyright policy, but to write a policy inside its authority.”

“It is not our goal to become judge of the contracts between the MVPDs and programmers,” he said.

The latest proposal is a compromise from one issued earlier this year, which would have required that programming feeds be made available to manufacturers so they could make an alternative to the set-top box and sell it to consumers.

Although groups like the Directors Guild of America, IATSE, and SAG-AFTRA oppose the latest proposal, the Writers Guild of America West came out in favor of it in a statement issued on Wednesday. Wheeler said that the proposal would help independent content creators because it requires integrated search across platforms.

Rosenworcel said that there was a lot in the proposal “that seems to work,” but said that she has “some problems with the licensing, and the FCC getting too involved in the licensing scheme.” She had doubts about the agency’s authority.

But she saw a need for competition in the marketplace.

“Set-top boxes are clunky and they are costly,” she said. “Consumers don’t like them, and they don’t like paying for them. That is not just my professional opinion. It’s my personal opinion too.”

At the hearing, there was talk of a long-standing issue over Rosenworcel’s confirmation for a new term. Sen. Bill Nelson (D-Fla.) criticized Republican leadership for backing out of an agreement made in late 2014 to move her confirmation through to the Senate floor. The Senate Commerce Committee cleared her confirmation in December.

“Where have those days gone and why do we still sit around and wait for the confirmation of Ms. Rosenworcel?” he asked.

Last week, Sen. John Thune (D-S.D.) told reporters that one thing that may help move Rosenworcel’s confirmation along is if Wheeler would commit to stepping down after the November election.

Wheeler has not explicitly done so, but he did tell the hearing that given the upcoming election and a new administration, “This may be my last appearance before this committee.”

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