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Key House Democrat Doubts FCC Set-Top Box Proposal ‘Will Work’

U.S. Capitol
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Rep. Frank Pallone (D-N.J.), the ranking member of the House Energy & Commerce Committee, is expressing doubts about the FCC’s latest set-top box proposal, which would require cable operators to offer apps of their channel feeds.

“As I’ve said before, consumers do not like set-top boxes — they are clunky, outdated, and needlessly expensive,” he said in a statement on Monday. “While I commend Chairman Wheeler for working to solve this difficult issue, I’m concerned that this latest proposal will not work, particularly when it comes to licensing. Ultimately, I’m skeptical that the revised plan will benefit consumers.”

Last week, FCC chairman Tom Wheeler unveiled a proposal that would require that cable operators offer free apps that would enable subscribers to forgo the rental of set-top boxes. A licensing body, made up of representatives the cable and satellite business and content providers, would license the app to device makers, but the FCC would have oversight.

A vote is scheduled on the proposal on Sept. 29.

A spokeswoman for Wheeler said in a statement, “We continue to have productive conversations with all stakeholders about Chairman Wheeler’s apps-based proposal to ensure consumers have the options they deserve – and that Congress mandated – to access the programming they already pay for.”

Multichannel distributors, known as MVPDs, actually proposed an app-based approach in June. It was a compromise to an earlier FCC proposal that would have required them to supply program fees to device manufacturers so consumers could buy their own set-top boxes.

But MVPDs are objecting to the new proposal, including requirements that they make app software available on all widely deployed platforms. The MVPDs wanted to limit app development to HTML5, but the FCC wants no specific standards. “They may choose to develop apps themselves or provide the necessary code to a third-party developer to develop an app on behalf of the pay-TV provider,” the FCC said in a fact-sheet outlining the proposal.

Programmers, including studios and cable networks, are raising objections over plans for the licensing body. Commissioner Jessica Rosenworcel, who may be the swing vote on the proposal, participated in a conference call with programming representatives on Thursday. According to an ex-parte filing, the programmers told her that “any arrangement in which they are required to allow their content to be distributed on terms or conditions to which programmers would not agree would be tantamount to a compulsory copyright license.”

But the FCC spokeswoman said that programmers “would have a seat at the table” in licensing, and the FCC “would have limited oversight to ensure industry doesn’t act anti-competitively and limit consumer choice. In addition, the proposal prohibits altering terms of contracts between programmers and pay-TV providers.”

Wheeler says his proposal is designed to boost competition in TV navigation devices, citing the average $231-per-year that consumers pay to rent their cable boxes.

The issue is expected to come up on Thursday when the Senate Energy and Commerce Committee holds an oversight hearing with all five commissioners.