FCC Set-Top Proposals Effect on Minority Programmers Challenged At PK Panel

Opponents and supporters of FCC proposals to make the set-top box market more competitive (see 1601270064) loudly disagreed at a briefing Friday whether the plan would improve prospects for minority programmers. Officials from the Consumer Federation of America, Free Press, National Black Programming Consortium (NBPC) and Public Knowledge said making the retail set-top market more viable would create opportunities for minorities. Opponents in the crowd loudly challenged that assertion. Wednesday, the Justice Department backed the FCC issuing an NPRM (see 1602030017).

If rules allow companies like Amazon and Google to gain power in the industry, minorities would be exchanging one set of gatekeepers for another, said audience members Amy Hinojosa, CEO of Latina organization MANA, and Larry Irving, former NTIA administrator and current telecom and IT consultant. Irving said he wasn't representing any clients at the event. After leaving the Clinton administration, he worked at Hewlett-Packard and now runs a consulting firm which PBS, where he is a board member, said has international telecom and IT clients.

Proposed set-top box rules wouldn't favor specific companies, said panelist Eric Easter, chairman of the NBPC. “We’re not talking about a specific device.” With a more wide open retail market for set-tops, there will be a wider marketplace for minority-produced programming that now has few outlets, he said. There’s a “massive minority market” for programming that isn't being served under the current system, said CFA Economist Mark Cooper.

The FCC proposals could hurt the minority programmers that are already in place, Irving said. Echoing concerns expressed by Disney, Viacom and other programmers, Irving said the proposed set-top rules could allow Google and other third parties to have access to minority content without paying licensing fees. The FCC proposal would be “empowering” companies who haven’t invested in minority content, Irving said.

February -- Black History Month -- is “perfect” for the FCC to consider a notice of inquiry on multichannel video programming distributors' negotiation practices, common contractual provisions and public, education and government channel issues for independent and diverse programming (see 1601280069), since black-centric programming often is relegated to non-peak hours, said Easter. After February, “it disappears into the ether,” said Easter.

Speakers repeatedly pointed to set-top and related technologies being one route to tackling the access problems diverse and independent programmers face getting added to cable company lineups. The programmer access issue and set-top issue “are linked because of the potential to give consumers more choices … unencumbered by gatekeepers,” said Chris Lewis, PK vice president-government affairs.

In a filing posted Friday in docket 15-64, New England Broadband CEO Stephen Davis -- founder of the Black Education Network in 1996 -- said BEN ran into walls from many cable systems. "We were told that since many systems carried [BET] ... there was no need for additional diverse programming." Davis also said proposed set-top rules changes could provide an end run around such gatekeeping: "There is something terribly wrong with a media system where one or two companies have the power to deny the African American community access to programming about education, healthcare and public policy."

The proposed rules would allow third-party boxes to place streamed content alongside more traditional cable content, all integrated in one device, Easter said. By eliminating the need to switch between boxes to access different kinds of content, all of it will be on equal footing, he said. Opening up the set-top box market is “the logical next step” to the net neutrality order, said Cooper.

Improving set-top boxes is “a dial-up solution to a digital problem,” Hinojosa said. Since audiences are cutting the cord and moving away from MVPD subscriptions, tackling set-tops seems like an outdated way to improve the lot of minority programmers, she said. Hinojosa’s group, MANA, is among the signers of a letter from 14 Latino groups opposing the FCC NPRM (see 1602040053). The term set-top box is misleading jargon because the FCC proposal wouldn't require a physical box, and the technology will apply to mobile devices and video as well, PK Senior Staff Attorney John Bergmayer said.

Beyond set-tops, speakers referenced a variety of other potential fixes. Cooper -- pointing to such shows as A Different World, Golden Girls and Roseanne, all made by independent producers -- said financial and syndication rules that capped the amount of prime-time network programming owned by networks opened prime time to an explosion of programming diversity. “Diversity was no longer invisible,” Cooper said. “The networks never would have done it on their own.” Brian Woolfolk, principal at Swan Creek Strategies and a lawyer who has represented New England Broadband, said diverse programmers struggle with such issues as access to capital, lack of leverage in negotiations and contractual issues like MVPDs carrying their content blocking them from also streaming it. Easter said many of those issues may be beyond regulatory or legislative fixes, though the FCC could potentially play a role in “work[ing] with Wall Street to say ‘here’s this opportunity in the market.’”