In a July 11 letter posted this week to the FCC’s website, FCC Chairman Tom Wheeler assured Senator Charles Grassley (R-IA) that any rules adopted by the FCC as part of the agency’s “unlock the box” cable set-top box proceeding “will afford consumers with strong privacy protections” while ensuring that “the marketplace of legal copyrighted works is not harmed.”  As he emphasized that FCC staff members are “actively engaged in constructive conversations with all stakeholders,” Wheeler informed Grassley that the rules to be developed by the FCC will “avoid overburdening small pay TV providers while delivering American consumers meaningful choice.” 

As specified in a Notice of Proposed Rulemaking (NPRM) issued earlier this year by the FCC, the “unlock the box” plan is intended to spur competition in the multichannel video program distributor (MVPD) device market by enabling third parties to access content and programming that is locked into cable set-top boxes by MVPDs and integrate that content into their own navigation devices.  Acting on copyright and privacy concerns raised by MVPDs and other parties with respect to the NPRM, a coalition of MVPDs led by the National Cable & Telecommunications Association (NCTA) presented the FCC with an alternative “ditch the box” proposal last month that would eliminate cable set-top boxes altogether in favor of an industry commitment to “develop and deploy video ‘apps’ that all large MVPDs would build to open HTML.5 web standards.”

Acknowledging Grassley’s concerns about how the FCC’s proceeding “might affect the privacy protections afforded to pay TV consumers,” Wheeler maintained that “the privacy protections that exist today will also apply to alternative navigation devices and applications” under the new rules.  Along that same vein, Wheeler cited documents filed by the Federal Trade Commission (FTC) and by various state attorneys general in the FCC’s proceeding in which the FTC and the attorneys general stated they “would be willing and able to enforce the privacy commitments made by third party app and device manufacturers just as they currently enforce other privacy commitments.”  With respect to copyrights, Wheeler observed that “all of the current players in the content distribution stream . . . are required to respect the exclusive rights of copyright holders.”  As such, Wheeler told Grassley that the proposed FCC rules “will require any companies that enter into this market subsequent to our action to follow the same requirements.” 

Meanwhile, in response to Grassley’s concerns about the impact of the NPRM on small cable operators, Wheeler stressed that the NPRM recognizes “the important role that small pay TV providers play in many rural communities” in proposing to “exempt all analog cable TV systems from new requirements while also seeking comment on the American Cable Association’s proposal to exempt all pay TV providers serving one million or fewer subscribers.”  Agreeing that “customers of MPVDs of all sizes deserve choice and innovation,” Wheeler said, “I am confident that we will be able to find a balance that accurately reflects the technology and resources available to truly small providers.”