FCC Set-Top Box Proposal Generates Growing Congressional Concern

June 1, 2016

Last week, ANA filed comments on the proposal by the Federal Communications Commission (FCC) to open up the marketplace for navigation devices (i.e., set-top boxes) to third parties. In our comments, we pointed out the very serious issues the proposed rules present for  advertising interests, including the inability of advertisers to control the content and placement of ads, advertisers’ uncertainty regarding the compensation for ads, and other threats. These rules would undermine the contractual agreements that are in place between programmers and advertisers, since third parties that would now be able to access the content would not be bound by these agreements. In fact, some of the third parties seeking to enter this marketplace have already stated that they do not intend to abide by existing deals between advertisers and cable operators. Add to that the fact that advertising’s financial support for vast amounts of content would be eroded because the overall value of such advertising would be diminished, and the current rules are clearly ill-considered.

ANA is now being joined by a chorus of Members of Congress voicing concern about the rules.  Even before the rules were proposed, members of the Congressional Black Caucus had expressed that permitting third parties to access content “for free” might threaten the diversity of programming carried on broadcast and cable channels. Now that the proposed rules have been made public, many on Capitol Hill are raising questions about them, including:

  • 60 bipartisan House Members have said that the rules could harm small service providers, while affording consumers few benefits.
  • 23 bipartisan House members have urged the FCC to require that third parties accessing content must enter into their own agreements to protect programming copyrights.
  • The bipartisan leaders of the House Judiciary Committee have said that the rules could lead to pirated content, and urged the FCC to consider this potential harm carefully.
  • The bipartisan leadership of the Senate and House Homeland Security Committees have asked for information about the cybersecurity implications of the proposal.
  • Senator Orrin Hatch, a former Chair of the Senate Judiciary Committee, has said that the proposal could undo agreements in place that protect content from unauthorized use.
  • The House Financial Services Subcommittee of the House Appropriations Committee has included language in the bill providing funding for the FCC that prohibits the agency from finalizing the rules until there has been a study of their potential effects, including analysis of costs and benefits; effects on creators, networks and programming diversity; and potential harms to intellectual property interests.
  • Senator Patrick Leahy, Ranking Democrat on the Senate Judiciary Committee, wrote to the FCC that he thought this "unlock the box" proposal needs important clarifications,  including making sure that the same statutory, regulatory and contractual rights and obligations apply to all current and new third party distributors of content.

That’s quite a list of concerns, and ANA believes these worries are well founded. Hopefully, the FCC will get the message that there is widespread opposition to the current proposal.

Any rules addressing set-top boxes must protect programming content and ensure that the advertising which helps to support content is not disturbed. To do any less will undermine the very foundations of the varied entertainment and information system on which consumers depend.

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