DOJ Support of FCC's Set-top NPRM Seen as Bad Sign for MVPDs

The Department of Justice's expression of support Wednesday for the FCC's planned NPRM on opening up the retail set-top box market could be a product of the numerous recent mergers in the pay-TV and set-top box industries, industry officials on both sides told us Thursday. In recent years, federal antitrust officials have reviewed and heard competitive concerns about deals that include Arris/Pace, Comcast/TWC, Charter/TWC and AT&T/DirecTV. "Every time there's a deal, interested parties go to Justice and tell them what they don't like about the deal," said Mediacom Senior Vice President-Government and Public Relations Tom Larsen. DOJ's taking a public stance in support of the NPRM before it has been voted is seen as a bad sign for multichannel video programming distributors, industry officials told us. DOJ didn't comment.

Though the DOJ official's statement stopped short of endorsing the FCC's proposed changes to the set-top box industry (see 1602030017), it did say the agency welcomed the NPRM. Since NCTA and numerous pay-TV companies have been arguing the FCC shouldn't proceed with any rulemaking based on the Downloadable Security Technology Advisory Committee, that's significant, said Public Knowledge Senior Staff Attorney John Bergmayer. "Having the FCC look at this issue shouldn't be a controversial point," Bergmayer said.

One MVPD industry official who opposes the FCC proposal disputed the importance of the DOJ statement. The FCC's inclination to tackle the set-top box market has been clear for a while, and Chairman Tom Wheeler has had time to "get his ducks in a row," the official said. The FCC didn't comment. DOJ has weighed in on several previous FCC proceedings under Wheeler, such as broadcaster sharing agreements and proceedings connected to retransmission consent negotiation.

Public Knowledge and numerous other entities raised the set-top box market as a concern about MVPD consolidation in several recent merger proceedings, Bergmayer said. Since those issues were largely unaddressed in merger conditions on the deals that were approved, federal regulators may see the set-top box proceeding as a way to address those concerns, MVPD and consumer electronics industry officials who oppose the FCC's plans told us.