A divided FCC voted 3-2 yesterday to launch proceedings on proposed set-top box rules intended to spur competition in the multichannel video program distribution (MVPD) market.  The rules would allow third parties to access content and programming that is currently locked into cable set-top boxes by MVPDs and to integrate that content into their own navigation devices.   

Mirroring a draft document circulated last month by FCC Chairman Tom Wheeler, the Notice of Proposed Rulemaking (NPRM) responds to provisions of the 2014 STELA Reauthorization Act that require the FCC to sunset its ban on integrated security in cable set-top boxes.  As specified in the draft document, the NPRM would require MVPDs to offer three “information flows” to third-party device makers:  (1) video-on-demand lineups, channel listings and other data about the programming made available to subscribers; (2) data concerning video recording and other set-top box functions; and (3) the program content itself.  Such data would be made available by MVPDs in accordance with specifications to be established by a yet-to-be-formed, independent standards body.  MVPDs would also be required to “support at least one content protection system to protect its multichannel video programming that is licensable on reasonable and nondiscriminatory terms.”   

FCC Chairman Tom Wheeler told reporters that the fundamental issue driving the proceeding is whether consumers should be forced to rent a box “month after month, after month” from their cable TV provider.  FCC Commissioner Ajit Pai complained in a dissenting statement, however, that the FCC missed an opportunity to eliminate the need for set-top boxes altogether, lamenting that the NPRM “doubles down on the necessity of having a box, substituting one intrusive regulatory regime for another.”  Despite voting in favor of the NPRM, FCC Commissioner Jessica Rosenworcel cautioned that “important questions have been raised about copyright, privacy, diversity—and a whole host of other issues in a marketplace that has been tough for competitive providers to crack.”  Rosenworcel also voiced concern about the complexity of the NPRM in stressing that “more work needs to be done to streamline this proposal.”   

Reaction among industry players was also mixed.  As he argued that “today’s television and video marketplace offers audiences more choices than ever,” a spokesman for the Future of TV Coalition warned:  “the rules under consideration will drive up consumer costs, hurt programmers . . . and blow a gaping hole in Congressional protections for our TV privacy.”  Voicing the same sentiments as FCC Commissioner Pai, AT&T senior vice president Bob Quinn maintained:  “a visionary might have started a proceeding today to ask how the consumer-driven application economy could accelerate placing the set-top box onto the same path to the technology scrap heap as black and white televisions.”  The Consumers Union, however, welcomed the NPRM as “as important step toward tearing down barriers that have limited competition and innovation in this market.”