Responding to tenets of the 2014 STELA Reauthorization Act that require the FCC to sunset its ban on integrated security in cable set-top boxes, FCC Chairman Tom Wheeler circulated a draft notice of proposed rulemaking (NPRM) among his fellow commissioners yesterday that would require multichannel video program distributors (MVPDs) to make certain types of information available to rival manufacturers of set-top boxes and other devices, with the goal of promoting competition and reducing prices.  The FCC is expected to vote on the draft NPRM on February 18.

In an op-ed piece published Wednesday, Wheeler highlighted the dominance of MVPDs in the set-top box market, in which 99% of cable and satellite television subscribers lease their set-top boxes from their service providers at an average cost of $231 per year.  Noting that consumer costs for cable set-top boxes have risen by 185% over the last two decades even as prices for personal computers, mobile phones and other devices plummeted by 90% over the same period, Wheeler said the draft NPRM corresponds with previous FCC efforts to end consumer reliance upon landline telephone and wireless carriers for their devices.  Wheeler also predicted that the rules proposed in the draft NPRM, if enacted, will not only boost competition among device makers but will also spur software and application development as well as greater choice and flexibility in the way subscribers access their programming. 

Stressing that the FCC’s proposals will have no effect on licensing and content distribution deals between MVPDs and programmers or on the ability of MVPDs to package programming, Wheeler said the draft NPRM would require MVPDs to make the following information available to competitive device and application 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.  MVPDs would be required to make such data available in accordance with specifications to be established by a yet-to-be-formed, independent standards body, and MVPDs would be required to offer at least one content protection system “that is openly licensed on reasonable and non-discriminatory terms.”  Existing privacy protections and safeguards against copyright infringement would remain in place. 

Consumer advocates and Democrats on Capitol Hill welcomed the proposal.  As ranking House Communications & Technology Subcommittee member Anna Eshoo (D-CA) remarked that the draft NPRM “has the potential to unlock the TV set-top box market, giving consumers relief and paving the way for cheaper, alternative choices,” a spokesman for Public Knowledge predicted that adoption of the proposed rules “will create opportunities for programmers who want to access viewers without passing through the cable gatekeeper.”  The American Cable Association (ACA) warned, however, that the FCC’s “one-size-fits-all approach will disproportionately burden smaller cable operators.  The newly-launched Future of TV Coalition—whose members include ACA, the National Cable & Telecommunications Association, and the Motion Picture Association of America—also characterized the draft NPRM as “a solution in search of a problem” since “consumers can already access pay TV programming right alongside streaming content on an ever-expanding universe of consumer-owned devices.”