Monty Tayloe

The FCC gave NCTA and other supporters of the pay-TV backed set-top proposal (see 1607010066) a list of questions seeking more detail on the plan’s specifics, a cable industry official told us. The document seeks more information about the future of HTML5 and how the pay-TV plan would work, and said “we agree that a licensing model is a viable option to ensure a variety of protections.” The FCC also indicated support for the HTML5 standard, which is what that alternative set-top plan is based on: “We agree that HTML5 may be an appropriate platform for app developers to provide access to content.” Both the licensing concept and the HTML5 standard were targeted in comments from proponents of the original FCC set-top plan, such as Public Knowledge. The questions also show the agency is trying to get specific answers to questions raised by critics of the pay-TV plan, such as whether third-party boxes running pay-TV apps will be able to use DVR functionality. There are also signs of contention, such as FCC comments that “innovation and competition in user interfaces has the potential to lead to consumer friendly features.” The pay-TV proposal’s apps would each use the multichannel video programming distributor interface. The FCC had no comment. In an ex parte filing posted Monday in docket 16-42, Roku expressed concern about the pay-TV compromise plan’s use of HTML5. The MVPD proposal “would, as a practical matter, establish HTML5 as the de facto standard in the video distribution marketplace,” Roku said. “Such an approach would be ill advised given that consumers have clearly demonstrated their preference for an array of devices with diverse user experiences at various price points, which has spurred competition and innovation in the marketplace.” HTML5 is a “bulky and expensive architecture” that would require third-party device manufacturers to “include additional processing power and memory to support it, even in their lowest-priced devices,” the company said.

Content companies and supporters of the FCC set-top plan expressed increased openness to the pay-TV apps-based compromise proposal after a week of meetings on the topic at the commission, according to ex parte filings in docket 16-42 and interviews. The pay-TV plan is “a preferred baseline for developing final rules,” Scripps Networks Interactive told the FCC, said a filing on a meeting that included Content and Distribution Marketing President Henry Ahn. Public Knowledge Senior Staff Attorney John Bergmayer told us the PK-backed FCC plan “is the bee's knees,” but the Consumer Video Choice Coalition, of which PK is a member, isn't locked into any particular technology to accomplish its set-top policy goals.

Multiple stages of the incentive auction are seen as a near certainty and the process could last into 2017, broadcast attorneys, analysts and broadcasters told us after the release of the $86.42 billion clearing cost of the reverse phase of the auction after it ended at round 52 Wednesday. With auction costs and the $1.75 billion relocation reimbursement fund added on, forward auction bidders would have to more than $88 billion to prevent the auction from going to a second stage.

The FCC should launch a rulemaking on the ATSC 3.0 transition by Oct. 1, said numerous broadcasters in reply comments posted Monday and Tuesday in docket 16-142. “Time is of the essence,” said a joint filing from petitioners NAB, CTA, America's Public Television Systems and the AWARN Alliance. “Broadcasters, the consumer electronics industry and broadcast equipment manufacturers are ready to move forward if the Commission will just let them.” Initial comments included a cable focus on carriage burdens from 3.0 (see 1605270054).

Broadcasters' transition to a new TV standard shouldn't obligate multichannel video programming distributors to make the same transition, said the American Cable Association, AT&T, Dish Network and NCTA in FCC comments posted Thursday and Friday in docket 16-142 on the joint ATSC 3.0 petition from the AWARN Alliance, CTA and NAB (see 1604130065). All full-power broadcast commenters vociferously supported the petition. But pay TV, consumer groups and low-power TV interests said the petition doesn’t take their concerns fully into account, while Dolby Labs hailed ATSC 3.0 for bringing "significant advances" in broadcast audio and video performance (see 1605270024).

The divide over FCC-proposed set-top rule changes remains wide, based on filings in docket 16-42 Monday, the deadline for replies, several of which were posted Tuesday. Early-filed comments likewise showed a divide (see 1605230058). Pay-TV industry-side commenters such as Comcast and NCTA cited a record filled with filings against the plan. Proponents of the set-top NPRM dismissed those comments as anti-competitive obstructionism. Opponents “espouse bogus arguments to obfuscate the debate,” said the Computer & Communications Industry Association. “The NPRM drew far more opposition, from a much wider variety of parties, than it did support,” said NCTA.

The FCC set-top box proposal is a threat to consumer cybersecurity, goes far beyond the will of Congress and can't accomplish what the agency says it can, said recent filings from legislators, trade groups and companies in docket 16-42. Monday was the deadline for reply comments, and a rule is expected to be issued this summer, industry officials have told us. Only some replies were available Monday. The decision essentially has been written already, disregarding all the industry objections to the proposal, said downloadable security company Beyond Broadband Technology. “Efforts to explain and navigate through the difficult issues raised by the 'proposed' rules are a waste of time and effort.”

The FCC should refrain from imposing "tech mandates" on the proposed transition to ATSC 3.0 and facilitate "permissionless innovation" for broadcasters, Commissioner Mike O'Rielly said Wednesday at the ATSC Broadcast Television Conference. Along with O'Rielly's keynote, the event had panels on the new standard's chances at the FCC and on the post-incentive auction repacking effort.

Though the ATSC 3.0 transition plan has gotten a favorable reception from some broadcasters and FCC Chairman Tom Wheeler (see 1604200051), questions abound about how broadcasters transitioning to the new standard will interact with pay-TV providers and smaller broadcasters, broadcast and cable attorneys told us last week.

Comcast's recent announcement that it would include set-top box functionality in some Samsung smart TVs (see 1604200047) validates the FCC set-top proposal, agency Chairman Tom Wheeler said at a news conference after the commission's open meeting Thursday. Comcast “is proving our point,” he said, since the arrangement involves a third-party device performing the function of a set-top. That comparison is specious, since Comcast and Samsung were able to privately negotiate that deal, and work out stipulations about respecting copyright and data and similar concerns, Commissioner Ajit Pai said in a subsequent news conference. Since there would be no such arrangements under the FCC proposal, it would be “like the wild West,” Pai said. Wheeler said the FCC proposal would allow all companies to accomplish what Samsung and Comcast did, and keep the deal from being withdrawn. Comcast has made similar arrangements in the past, but it didn't lead to change in the market, he said. “What Comcast giveth, Comcast can taketh away,” he said. “We’re glad that Chairman Wheeler has noticed that the marketplace is already producing real technology solutions” for watching pay TV without a set-top, emailed the Future of TV Coalition. “But these market-driven, app-based solutions bear no resemblance to the sweeping, Google-backed mandate he has proposed.” Comcast's deal with Samsung involves an app that is very different from what the FCC is proposing, a pay-TV industry official told us. The Samsung device won't have any ability to change Comcast's user interface or advertising, the official said. The “groundswell” of opposition should persuade Wheeler that the FCC to “take some time” instead of “barreling ahead,” Pai said. Comcast didn't comment.