Wheeler's Pending House Appearance Ups Pressure for Deciding Set-Top Plans

Several House Communications Subcommittee members see virtue in the industry’s "Ditch the Box" alternative set-top proposal, their offices told us. The issue is expected to come up and create pressure at the subcommittee’s Tuesday FCC oversight hearing, scheduled for 10:15 a.m. in 2123 Rayburn. FCC Chairman Tom Wheeler's appearance is seen by officials on both sides of the set-top matter as applying some time pressure to the FCC's set-top plans, they said in interviews. Opposition to the original FCC proposal has been more bipartisan and more strenuous than FCC officials expected, both proponents and opponents of the FCC plan have said.

Content, pay-TV and public interest officials said it's expected the commission will want to be able to indicate to lawmakers that some sort of compromise plan that addresses the criticisms of the original is in the works. With the end of the year and the possible end of Wheeler's administration approaching, timing is an important factor in the set-top proceeding, a consumer electronics official told us. It's not clear if a compromise proposal would require a new rulemaking, the official said. If an order is issued this fall as some industry officials expect, it could take years to implement, depending on its nature, officials told us. Proponents of the pay-TV proposal said it could be implemented long before the FCC's original plan, while the Consumer Video Choice Coalition (CVCC) said pay-TV interests are inflating the time line it would take to accomplish the FCC plan.

Some lawmakers signaled much interest in the FCC cooperating with industry on new set-top plans and eye the hearing as a chance to discuss it. Last month a Republican news release named the set-top proceeding as a key issue lawmakers would examine at the hearing.

“I believe this alternative plan is a balanced approach to addressing the FCC’s demands,” said Communications Subcommittee Vice Chairman Bob Latta, R-Ohio. “The proposal protects smaller TV providers from burdensome regulations, offers consumers more choice and privacy protection, and safeguards programming content.”

“One thing everyone can agree on is that our set-top boxes can be clunky, bad for the environment and expensive,” said Commerce Committee ranking member Frank Pallone, D-N.J., in part of the statement he released last week about his belief the recent industry proposal and FCC receptivity was bringing sides closer to a positive resolution (see 1606300057). “I look forward to continued discussion on this topic at the FCC Oversight hearing on July 12.”

"I am encouraged by the FCC's willingness to work with the industry on this ‘Ditch the Box’ proposal,” said Rep. Kevin Cramer, R-N.D. “It is a win-win for all parties. While moving to an app-based platform was already happening, the industry's proposal ensures a timely transition for consumers, while also protecting the rights of copyright material. I also applaud the inclusion of a one million customer exemption for small video operators who will undoubtedly need more time to adjust to an app-based environment.”

Rep. John Shimkus, R-Ill., “supports the compromise proposal,” his spokesman told us. “Unlike the chairman’s misguided attempt to revert back to outdated technology with his unilateral set-top box proposal, he hopes that the commission can find a middle ground on the issue that is mutually beneficial to all stakeholders.”

Communications Subcommittee ranking member Anna Eshoo, D-Calif., the only subcommittee member to vigorously defend Wheeler’s set-top box NPRM this year, wants more information about the industry alternative. “It’s encouraging to see the cable industry acknowledge that competition is needed in the set-top box marketplace and that it is required by law,” Eshoo told us in a statement. “Consumers must be able to choose their own devices or apps to watch the content they want, and we know the FCC’s proposal will accomplish that goal. Because the industry’s proposal does not contain specific details, it is difficult to evaluate it.” No other subcommittee Democrats signed Eshoo’s February letter lauding the NPRM’s approach.

Reps. Yvette Clarke, D-N.Y., and G.K. Butterfield, D-N.C., have actively questioned Wheeler’s NPRM. Clarke has sought a pause to the proceeding and backed the appropriations policy rider that would mandate a pause for further study. Rep. Bobby Rush, D-Ill., another subcommittee member, allied himself with Clarke, signing her set-top letter in April. Some Commerce Committee Democrats who aren't on the subcommittee also questioned the proposal: Reps. Gene Green of Texas, Tony Cardenas of California and Kurt Schrader of Oregon. Clarke joined with Communications Subcommittee Chairman Greg Walden, R-Ore., to request a GAO study on Wheeler’s NPRM.

Last week the commission hosted a series of meetings on the multichannel video programming distributors' compromise proposal that industry officials believe could be a precursor to the FCC moving toward the pay-TV plan. In ex parte filings, content companies called the pay-TV plan a preferable starting point to the original FCC proposal, and the Consumer Video Choice Coalition said it wasn't locked in to any particular technology. In an ex parte filing posted Friday in docket 16-42, the CVCC said aspects of the MVPD proposal could be “bolted on” to the FCC plan.

There are other indications the two sides remain far apart, a consumer electronics official said. The same CVCC filing said the MVPD app plan “would appear to deny subscribers the present and future benefit of competition in the offer, choice, recording, and presentation of programming” and would “obstruct and complicate the path for potential competitive entrants.” The CVCC filing does leave open a path to compromise: “If modified to support a truly open and independent user interface and complementary features and functionality, this technology could potentially be a part of, or a basis for, a solution that complies with the goals of the Commission’s NPRM,” the CVCC said.