FCC Chairman Pai takes Wheeler’s set-top box plan off the table

Cable industry was open to compromise, but no Republican plan has been offered.

Jon Brodkin – Jan 30, 2017 5:08 pm | 60

Credit: Getty Images | RoyalFive

Federal Communications Commission Chairman Ajit Pai has taken his predecessor’s cable TV set-top box plan off the table.

The proposal from former Chairman Tom Wheeler was officially “on circulation,” meaning that commissioners could vote on it at any time. That was the case until Friday, when Pai removed the set-top box proposal from the list of items on circulation, an FCC official confirmed. (Pai also removed a Wheeler proposal to lower the price caps for business data services.)

Republican members of Congress had previously asked Pai to close the set-top box proceeding entirely. But while Wheeler’s proposal can no longer be voted upon, the proceeding is still open, and Pai could circulate an alternative proposal. There’s no word on whether he has any plans to do so, though.

Although the set-top box proceeding is highly partisan and controversial, one proposal that came from the cable industry itself gained a favorable review from one Republican FCC commissioner. Democrats led by Wheeler initially wanted to require pay-TV providers to make video programming available directly to the makers of third-party devices and software so that they could build TV apps and devices without the need for a CableCard. The cable industry balked at this plan and pushed an alternative proposal that would require cable companies to make their own video applications for third-party set-top boxes and other consumer devices. The cable industry’s top lobbyist, NCTA CEO Michael Powell, and representatives of Comcast and AT&T/DirecTV supported the apps requirement in a June 2016 meeting with FCC commissioners.

Wheeler accepted major portions of the cable industry plan, but he insisted on a few changes and wasn’t able to get anything passed before he resigned on the day of President Donald Trump’s inauguration. But before that, O’Rielly criticized Wheeler for “not accept[ing] yes for an answer” and said the cable industry proposal was “a reasonable plan.”

If it was a reasonable plan then, why not pass it now? We asked O’Rielly that question today, but his office declined to comment. Still, given O’Rielly’s previous statement, it seems likely that he would support the cable industry plan if Pai circulates it for a vote. When we contacted Pai about the cable industry plan today, a spokesperson responded that “the item is under review.” Pai has previously said the FCC “should be encouraging” cable industry efforts to deploy video apps for third-party devices such as iPads and Android phones, though it’s not clear whether he supports the specific plan offered by the cable industry.

Better than nothing

The industry proposal doesn’t achieve all the consumer-friendly goals of Wheeler’s plan. For example, the cable industry didn’t want to require that video apps include the ability to record, a key feature of set-top boxes rented out by pay-TV companies. The industry plan also would have applied only to pay-TV companies with at least one million subscribers. (Wheeler wanted to mandate recording capability, apply the rules to any provider with at least 400,000 subscribers, and develop a standardized app licensing process to ensure widespread availability on third-party devices.)

But even with its limitations, reviving the cable industry apps plan or something like it might still be better for consumers than doing nothing. Wheeler’s primary goal was to give consumers a viable alternative to expensive set-top box rentals, and the cable industry plan would lessen the need to rent set-top boxes by providing linear and on-demand programming to third-party devices.

Commissioner Mignon Clyburn, who is currently the only Democrat on the FCC, last week tweeted about her frustration with the FCC’s failure to enact set-top box rules:

Consumers pay avg of $200+ per year to rent their #SetTopBox, grossing video providers more than $20b annually. Is this #consumersfirst?

— Mignon Clyburn (@MClyburnFCC) January 26, 2017

Clyburn’s office declined to provide any further comment today.

Even without a mandate, Comcast and some other pay-TV companies do offer video streaming apps for third-party devices already. But without rules, deployment could remain uneven across cable companies and devices so that a consumer’s ability to use a video app will depend on decisions made by their cable company.