Fischer Questions FCC Direction on Set-Top, ISP Privacy Proceedings

FCC Chairman Tom Wheeler’s set-top box rulemaking was criticized Monday at the Independent Show, co-hosted by the American Cable Association and the National Cable Television Cooperative in Orlando. Senate Commerce Committee member Deb Fischer, R-Neb., criticized the NPRM, but American Cable Association President Matt Polka told her the industry alternative known as Ditch the Box may be no boon for smaller operators either.

The proposed set-top rules “are a solution in search of a problem,” Fischer said, according to audio of her remarks. “Requiring carriers to unlock their content service, it is not going to break open these so-called monopolies. Vibrant competition in the video market already exists. What it will do is pave the way for more potential problems, particularly for small providers.” She said it would be “costly” for smaller operators to upgrade their boxes to comply. “They could lose valuable content protections that they enjoy today,” she said, citing a letter she sent with Sen. Steve Daines, R-Mont., expressing concern. Wheeler sent a reply July 11, expressing confidence a balance could be achieved that avoids undue burdens and the negative consequences critics fear.

“It would cost our member companies a million dollars per cable system to meet that technological challenge,” Polka told Fischer, also noting challenges in the Ditch the Box proposal: “When you look at the technical requirements there, [they] might actually be double the cost of the chairman’s proposal. So it is an imposition of costs on smaller providers.” He wondered about Capitol Hill’s possible reaction: “Is the FCC listening? Is this something you think Congress will need to address?”

“I hope the FCC is listening,” Fischer replied. “We cannot continue to put burdens on smaller companies, companies that serve people in very rural areas. And when you look at the cost of this role and the challenges we see with the delivery of services, I believe the FCC needs to listen. To at the very least postpone this rule so we can have a study, so that we can look really at the possibility of exempting our smaller carriers from this because of not just the burden on your businesses but it’s the burden on your customers as well.”

The FCC is “still very much in the deliberative stage” of weighing its own set-top box proposal against the pay TV-championed HTML5 apps-based proposal, Commissioner Mignon Clyburn said Monday at the show. “There is no rush on this when it comes to choosing one pathway or another tomorrow,” Clyburn said, according to provided audio. “There is a desire for us to ensure the ecosystem is better and enhanced and not harmed.” When the commissioners reach a decision, “We’re going to be as close to Nirvana as possible,” Clyburn said.

Clyburn said the key issues in her own decision-making are creation of a competitive framework, compliance with Telecommunications Act Section 629 on the commercial availability of multichannel video programming equipment, privacy and copyright protections, and accessibility of diverse and independent programming.

Polka also cited retransmission consent blackouts and Wheeler’s choice not to take them on this year. “Is this an issue where Congress is ultimately going to have to get back involved, to solve for consumers?” he asked. Fischer didn’t address retrans blackouts specifically and instead said there's a need for more Capitol Hill oversight altogether, specifically FCC reauthorization. The Commerce Committee cleared an FCC reauthorization bill in April. Until lawmakers exert oversight through hearings, letters and broader reauthorization, “I think we will not see agencies respond,” she said, backing FCC reauthorization efforts under Commerce Committee Chairman John Thune, R-S.D. “That hasn’t been done in 25 years. Isn’t that ridiculous?” Agency reauthorization allows for lawmaker “airing of grievances,” she said. Thune, despite expressing desires to hold a video policy hearing this Congress, hasn't done so. Congress is now in the midst of a seven-week recess and is scheduled to return for only some weeks in September before adjourning for the elections and any lame-duck session following those.

Clyburn said she hoped the FCC’s notice of inquiry earlier this year on the state of independent and diverse cable programming (see 1601290047) tees up a next step of regulatory action. “I’m working closely with the chairman to do just that,” she said, though she said it's unclear what direction the agency may go. “I’m hopeful for a proactive next step,” she said, with Polka saying he also hoped to see a rulemaking or other unspecified action. Clyburn also decried what she sees as an increasingly partisan atmosphere at the agency, though she didn’t give details. “The word ‘compromise’ is decreasingly being used,” she said. “I’ve been reared in a sort of cocoon that says we can work it out. I’ve always come from that posture. I miss that.” And she urged the independent cable operators to take part in the broadcast incentive auction: “You see every single day the benefits of bringing broadband to your communities. Connectivity is a win-win for your consumers [and] our economy.”

“I’m concerned that overregulation in the telecom sector will harm investment and it will make carriers less likely to invest in the infrastructure that is needed to bring the benefits of broadband to our consumers,” Fischer said, lamenting that the U.S. Court of Appeals for the D.C. Circuit upheld the FCC’s net neutrality order. “These burdensome rules will cause uncertainty for businesses that invest and that innovate in this space.” She said the FCC “misplaced its focus” on municipal broadband. “It is telling that North Carolina and Tennessee are challenging the FCC’s order on municipal order in court,” she said. “It is even more telling that the Department of Justice has declined to defend their case. This highlights the overreach that has become characteristic of the FCC under this chairman.” She expressed concerns about ISP privacy rules’ effects on small operators. “The Federal Trade Commission’s enforcement-based approach has worked for many years,” she said. “So what’s the ultimate result of this proceeding? Small carriers will again be forced to shoulder those compliance costs. They may decide to forgo providing those broadband services. And without a doubt it would be worse for consumers.”