Tuesday, April 26, 2016
Major cable companies are worried FCC plans for cable box will allow customers to pick and choose channels they want
In a joint filing late last week, a coalition of huge media companies including Disney, CBS, and Viacom told the FCC that they oppose its plan to open up cable boxes, according to the Los Angeles Times. The comment, which does not appear to be available publicly yet, reportedly argues that the plan would destroy a major source of revenue for cable companies, TV networks, and the studios producing their shows.
Their concern is said to be that new set-top boxes may present channels and TV shows in a different order than each cable company would like them to be presented in. That seems like a silly argument on the surface, but it matters because cable companies frequently have deals in place over the ordering and presentation of TV channels. This proposal would make those deals fall apart, destroying a source of revenue. It would also make it harder for content companies to bundle multiple networks together in an attempt to get viewers watching more of their shows. Therefore, the argument goes, less money for everyone.
The coalition is reported to be particularly concerned that these new set-top boxes will offer up shows individually, instead of presenting entire channels as cable boxes do today. Here's how the LA Times describes the companies' concerns: "That would leave the TV industry vulnerable to the same fate as the music industry after consumers began buying individual songs rather than entire albums and CDs." Basically, it'd be a boon for consumer choice, but it'd mean much less revenue overall for the industry, since consumers would be able to choose the good stuff and ignore the bad stuff.
Disney, CBS, and Viacom are joined in the filing by 21st Century Fox, A&E Television Networks, Time Warner, and Scripps Networks Interactive, according to the report.
Deadline reports that the joint filing also argues new set-top box makers could fail to uphold "commitments to protect and secure content." In a separate filing, the RIAA and other music groups present similar concerns around the protection of music streamed to set-top boxes. They're worried about scary things like set-top boxes being able to "disaggregate music programming into individual tracks to allow users to create custom playlists." Troubling.
Comcast also points to security concerns in a filing it made with the FCC yesterday, alongside its subsidiary NBCUniversal. (Comcast is an investor in Vox Media, The Verge's parent company.) Comcast's filing is enormous, first covering a series of legal points arguing that the FCC doesn't even have the ability to make these changes, and then coming around to arguments about how the set-top box proposal will hurt the cable industry and content providers.
Like Disney, CBS, and Viacom, Comcast also argues that letting set-top boxes reorder TV as they see fit will disrupt a revenue source that's "critical to this thriving marketplace." Opening cable streams to any set top box, it argues, would "endanger the entire content production ecosystem."
Comcast also writes that it would be burdened by the technical changes necessary to comply with the new requirements. It would need more bandwidth, it says, and have to "re-architect its network" to support these new standards. "In any event, at a minimum, the [FCC's proposal] vastly understates the level of work, and associated costs, that would be necessary to implement its Set-Top Box Mandate," it writes.
Initial comments on the FCC's set-top box proposal were due last night, but it appears that they haven't all come online yet. At the moment, there are many major names missing — including most technology companies. Roku, notably, has filed; as its CEO indicated yesterday in a Wall Street Journal op-ed, it's not a fan of the proposal.
One technology trade group, which counts Google, Facebook, Amazon, Netflix, Sprint, and T-Mobile as members, has filed noting its support for the proposal, according toDeadline. The filing by Incompas argues that the proposal is necessary to bring competition to the TV landscape. "In the absence of competition, [pay TV distributors] have used [their] monopolistic power to stifle innovation and require their customers to pay an exorbitant monthly fee to rent a device that only evolves as and when they choose," the group writes.
That's the FCC's very argument. And it's an argument that TV networks and content providers are only half-heartedly addressing. Comcast points out that it's really into apps now — it even won an Emmy for one! — but Disney and its cohorts won't go far to defend the quality of set-top boxes or how consumers get content. They're just concerned about what this proposal will mean for how their industry makes money.
According to the LA Times, the filing by Disney's group says, "The content companies write not in defense of set-top boxes or leased equipment, but instead to highlight that the commission’s proposal is fundamentally flawed and therefore threatens to harm the video programming marketplace and consumers."
We should continue to see more comments come in on the proposal. Companies will then have a period of time to file reply comments, so this debate will continue for the next several months. And, like any good FCC proposal, it'll probably end up in court after that.