Wheeler Reassures Lawmakers on Set-Top NPRM, as Detractors Chide Defenders' Tone

FCC Chairman Tom Wheeler laid out another defense for his set-top box rulemaking before lawmakers, this time in response to critics. The letter’s Friday release follows a Thursday news conference of Capitol Hill Democratic defenders (see 1606090066). Some saw it as inappropriately attacking NPRM critic Rep. Yvette Clarke, D-N.Y., who has led Democrats in opposition.

Senate Majority Leader Mitch McConnell, R-Ky., meanwhile, joined the chorus of detractors Friday in a standalone letter to Wheeler. “In recent months, I have heard from many Kentuckians expressing their opposition,” McConnell said. “I share these concerns and encourage the FCC to reconsider moving forward.” McConnell said recent video market advances are due to the free market and existing licensing arrangements. The NPRM is a “markedly different approach,” leaving McConnell “particularly concerned” about the effect on small programming distributors and customers in rural America, he said. “The proposed set-top box regulations would add new costs for hardware and equipment that will inevitably be borne by consumers.” He cited hearing “from hundreds in Kentucky” worried about the impact on content, “about the complexity of compliance, and about the potential added costs of new hardware to meet the new standards.”

The rulemaking “will not alter the rights that content owners have under the Copyright Act; nor will it encourage third parties to infringe on these rights,” Wheeler told House lawmakers in a June 3 reply. “All of the current players in the content distribution stream, including cable and satellite companies, set-top box manufacturers, app developers, and subscribers, are required to respect the exclusive rights of copyright holders. The rulemaking will require any companies that enter this market subsequent to our action to follow the same requirements. For guidance about what these requirements entail, all market participants can consult a series of Federal court decisions made over the past several decades that have carefully distinguished non-infringing uses of copyrighted video content from infringing uses.”

Judiciary Committee members Doug Collins, R-Ga., and Ted Deutch, D-Fla., led the letter of concern, which included 23 signatures. In a May 23 response, Wheeler told Clarke, Rep. Gene Green, D-Texas, and the 53 other House Democrats who urged a pause and further study that the record was thorough and complete. Clarke and Green, in a joint statement Thursday lauding an appropriations rider that would mandate a pause to the proceeding and force further study, touted 175 members of Congress joining them in their concerns (see 1606090057). But at Thursday’s event of NPRM defenders, Robert Johnson, chairman of RLJ Entertainment and Black Entertainment Television founder, questioned the commitment and credibility of Clarke in comparison with that of Communications Subcommittee ranking member Anna Eshoo, D-Calif., who has opposed the appropriations rider and led a smaller group of Hill Democrats backing the FCC NPRM.

The news conference “attacked the Congressional Black Caucus, including Congressmember Yvette Clarke, for criticizing the proposal,” said the Multicultural Media, Telecom and Internet Council in a news release Friday, not referring to Johnson’s remarks explicitly. “Pitting people of color against each other merely deflects from the true issue at hand,” CEO Kim Keenan said. “The real issue is that the Commission is gifting content to device manufacturers and edge providers without compensating content creators and programmers; gifting these third parties valuable consumer data without subjecting them to the consumer privacy protections that are in place; reshaping the media landscape so that creators and programmers will be forced to pay third parties to prioritize their content or be lost in the Internet ocean; and increasing costs for the consumer through new or additional hardware fees.”

NCTA President Michael Powell said it’s “offensive” to see Clarke’s “substantive concerns about STB [set-top box] mandate trivialized with cheap attacks on personal integrity instead of merits,” in a tweet Thursday. NCTA is a member of the Future of TV Coalition, which opposes the NPRM and is at odds with the Consumer Video Choice Coalition, which featured many officials speaking at Thursday’s news conference.

Johnson “leaned into Congresswoman Yvette Clarke, questioning her calls to study the proposal more fully before blindly rubber stamping the proposed rule that could threaten a wide range of business and societal ecosystems,” said CALinnovates Executive Director Mike Montgomery in a blog post. “Congresswoman Clarke understands that there are content creators, network owners and fellow elected officials from all walks of life from all over the country who are concerned that this proposal fails the American people. Reasonable people can disagree, but to personalize it and call into question Rep. Clarke’s process or understanding of her constituents is shameful.”

“Bob Johnson suggested that she's cynically protecting the monopoly profits of wealthy blacks in the industry,” TechFreedom communications director Evan Swarztrauber, who attended the news conference, told us. “In fact, she's rightfully concerned that independent and minority programming will be repackaged and presented by third parties in ways that do not honor the contractual obligations negotiated between programmers and [multichannel video programming distributors]. In fact, companies that support the FCC's plan have specifically argued that they should not be held to those contacts, and have even boasted about how great this will be for them. The CBC and Clarke have called for the FCC to slow down and study the effects that this proposal will have on diversity. Sure, YouTube channels might be viable substitutes for black-owned television stations, but that's a hell of a claim to make without backing it up.”

Wheeler and the NPRM’s defenders have sought to counter criticisms that the proposal doesn't protect programming diversity and copyright or properly safeguard privacy. Ex-Sen. Byron Dorgan, D-N.D., who now lobbies for Consumer Video Choice Coalition member TiVo, also defended the NPRM Thursday in a guest column for Morning Consult.

“I am confident that these FCC-specific authorities and well-practiced contractual arrangements will safeguard the legitimate interests of all of the participants in the video ecosystem,” Wheeler told House lawmakers in his latest response on copyright. “We have seen this work in the cases of the statutory regime governing must carry and of the essentially contractual regime governing retransmission consent, for example. Specifically, I can assure you that, as you suggest, third party competitors should not be 'making commercial use of or modifying copyrighted programming’ as a result of this action to fulfill the statute's directive.”