At an FCC oversight hearing conducted last Thursday by the Senate Commerce Committee, FCC Chairman Tom Wheeler answered questions on draft FCC rules that would require multichannel video program distributors (MPVDs) to offer subscribers a set-top box alternative consisting of a proprietary, appsbased solution to enable subscribers to view programs on the devices of their choice. Recognizing the concerns of MVPDs and other stakeholders, Wheeler told lawmakers that he remains open to changes in the draft order that conform to a Congressional mandate to spur competition in the video navigation device market.
The draft order emerged as a major topic of discussion at the hearing, which also featured appearances by Wheeler’s fellow commissioners. Next week, the FCC is expected to vote on the proposed apps-based solution, which would replace the “information flows” concept that was been outlined in the FCC’s initial rulemaking notice last February. While the apps-based plan corresponds to the “ditch the box” solution that MVPDs had offered as an alternative to the FCC’s original proposal to open set-top box information streams to third-party device makers, MVPDs have objected to provisions establishing a standard industry license which would be overseen by the FCC and through which video apps would be distributed.
In his opening statement, Wheeler emphasized the importance of the draft rules in correcting a multichannel video marketplace in which “ninety-nine percent of consumers have no choice” to receive their programming except through a set-top box they must rent from their MVPD. While voicing gratitude for Wheeler’s decision to “jettison” the original rulemaking proposal, FCC Commissioner Michael O’Rielly argued that the draft rules, though based on proposals advanced by MVPDs, include “complicated” provisions that would make the FCC “the arbiter of a standard license.” Echoing O’Rielly’s sentiments, committee chairman John Thune (R-SD) lamented that the draft order sets up the FCC as “the most important player” through which “all innovation must pass.”
Meanwhile, as Senator Amy Klobuchar (D-MN) warned of “copyright issues for smaller programmers which already face narrow margins,” Senator Claire McCaskill (D-MO) maintained that she has “never seen [such] unified opposition” from MVPDs, programmers and other industry sectors as there is to the draft FCC order. Despite her approval of the FCC’s move to offer an alternative to “clunky” and “expensive” set-top boxes, Commissioner Rosenworcel admitted she has “some problems” with “the FCC getting too involved in the licensing scheme.”
Asked by Klobuchar where he sees a grant of Congressional authority over copyrights, Wheeler replied that the FCC is attempting to write rules “within its authority that don’t interfere” with copyrights. Wheeler also suggested that the draft rules could still be modified, adding, “if my colleagues have different thoughts, let’s get on with that.” Ranking minority member Bill Nelson (D-FL), meanwhile, advocated for bipartisanship and compromise, agreeing that the FCC’s goal of freeing consumers from set-top box rental fees “is a good idea, but if consensus is not reached, it’s not going to be a success.”