TPA Submits Joint-Filing to FCC on AllVid Proposal

The Federal Communication Commission (FCC) is moving forward with their latest regulatory proposal, known as AllVid, and the criticism is piling up. AllVid would work by requiring traditional pay-for-TV providers to make video programming available to third-party devices. Chairman Wheeler is choosing sides again, playing favorites and picking winners and losers in what should be an all of the above approach to moving beyond the set-top box structure of how cable entertainment is delivered. Regardless of the authority the Chairman is claiming by way of Section 629 of the Communications Act, stakeholders representing a wide-range of industries continue to present key arguments as to why this is the wrong approach as well as pledge to work with the agency on a better proposal that would ensure that free and fair competition remains the standard. TPA this morning, in a joint-filing with a broad coalition submitted these comments to the FCC on the AllVid proposal. The comments call attention to the key issues that many have with Wheeler’s approach including privacy, consumer choice, market competition, and process. Comments can still be filed today by visiting the FCC’s website here.

See the full comments below:

Before the Federal Communications Commission

Washington, D.C. 20554

Comments by the Undersigned In the Matter of:

Expanding Consumers’ Video Navigation Choices                           )                       MB Docket No. 16-42

Commercial Availability of Navigation Devices                                )                       CS Docket No. 97-80

Adopted: March 17, 2016 Released: March 17, 2016

Extended Comment Filing Deadline: April 22, 2016

Extended Reply Comment Filing Deadline: May 23, 2016

April 22, 2016

Commissioners Tom Wheeler, Mignon Clyburn, Jessica Rosenworcel, Ajit Pai, and Michael O’Rielly:

We, the undersigned organizations dedicated to economic growth and innovation in a free economy, submit the following comments respectfully expressing our opposition to the FCC’s proposed rulemaking Expanding Consumers’ Video Navigation Choices Commercial Availability of Navigation Devices, MB Docket No. 16-42, CS Docket No. 97-80

We oppose what we see as a seriously flawed plan that will serve to hinder, rather than promote, the advancement of consumer welfare and the technologies developed to serve consumers of video servers.

The proposed rules propose an invasive new set-top-box technology mandate that will freeze obsolete technology in place, drive up consumer costs, create an unfair playing field on privacy regulation, and undermine the vibrant competition, creativity and innovation that exist in the market for video and television today.

Examining the rules closely, the FCC’s stated concern for the cost of consumer set-top boxes is ill served, since the new box and second device required by this proposal will almost certainly cost consumers even more. Instead, the rules would grant highly favorable treatment to a few corporate interests at the expense of consumers and the marketplace itself.

The FCC’s proposed rule is a solution in search of a problem. Even a casual observer who looks at the video market today sees vibrant competition and thriving innovation and consumer choice.  As Chairman Wheeler has described the competitive, dynamic video market:

“Thanks to advances in technology, American consumers enjoy unprecedented choice in how they view entertainment, news and sports programming. You can pretty much watch what you want, where you want, when you want.”

New devices and services like Netflix, Roku, Apple TV and dozens more give viewers unprecedented options and choice, and revolutionary digital apps allow some consumers to access their entire pay TV package without a box at all, while others turn to apps like HBO Now or MLB Gameday to “cut the cord” and buy only the specific programming they want. Home gateways and Smart TVs have brought viewers universal, cross-platform search – a development which the Commission oddly claims is the core innovation this proposed rule will bring about.

The video market is thriving, and does not need a massive regulatory subsidy to a few companies that would undermine the healthy competition that is underway and lock in a one-size-fits-all solution that will stifle innovation and change.

The proposed rule would mandate an obsolete second box in every home – with consumers footing the bill. While the Commission public statements claim the rule is proposed to “unlock the box,” this rule actually locks the existing box-based delivery model in place – at a time when the market is experimenting with dozens of new approaches and many providers are moving to “boxless” systems altogether. Even the most publicly vocal proponents of this rule – such as Public Knowledge — admit the rule would require some kind of new device for those wishing to use a new retail box and that “it’s just sort of an open question of exactly what that device would be.” Unfortunately, it is consumers who will end up paying for this new adapter box (whatever new Google box or other interface they purchase at retail) and the back-office costs of reworking networks to make the system function – driving up bills even for consumers who do not need or want the new FCC-mandated system.

The proposed rule would establish unfair regulatory advantages. The proposed rule requires existing MVPDs to open up their programming feeds for new entrants like Google to use in launching competing services of their own. In other words, instead of negotiating for programming rights to launch their own services – like Netflix, Hulu, Sony PlayStation Vue, Amazon Prime and every other new service has done – these latecomers to the market are asking the Commission for a free ride off the programming libraries assembled by existing cable and satellite TV companies. Whether one is a supporter or a critic of cable and satellite companies, this rule represents a stunning regulatory giveaway and attack on private competition that is grossly unfair and out of bounds in a free economy.

The proposed rule breaches copyrights and destroys the rational economics of programming markets. Programmers depend upon their ability to negotiate with the companies who distribute their creative works on vital terms like schedule, channel, placement, advertising rights, cross-promotion, digital and on-demand access and more. These contractual agreements allow programmers to recoup their considerable investments and continue to develop high quality shows and films – to the ultimate benefit of consumers. But the Commission’s proposed rule would make those agreements impossible to enforce by forcibly transferring programming to new device and service companies without requiring them to negotiate or pay for rights or honor any of these vital terms. A wide range of programmers (from the largest to the smallest) have noted that hijacking their work in this way – and without any compensation at all – makes it impossible for them to reach and grow their audiences and earn fair rewards from the shows they have invested a great deal to create. All of these changes would harm the almost two million Americans who work in the movie and television production business, and ultimately the consumer, who will be deprived of quality and diverse programming as the money that supports its creation is siphoned out to companies that don’t pay a dime to the creators for the privilege of distributing their content. The Commission has publicly claimed on several occasions that the proposed regulations will protect against these predicted harms,but there are no such protections to be found in the actual text of the proposed rules. The Commission should have addressed these concerns about this proposal honestly and head on, but has failed to do so.

The proposed rule would establish a privacy double-standard. Today, cable and satellite providers are subject to rigid privacy restrictions under Title VI of the Communications Act. Regardless of what one thinks about the wisdom of this law, its privacy constraints do not apply to the companies who would gain influence over TV viewing under the proposed rule. The Commission has publicly admitted that it has no authority to directly regulate how those companies collect and use viewer data, and so proposes a vague “self-certification” system under which such companies would promise to abide by the same prescriptive rules that govern cable and satellite providers. However, because the FCC cannot enforce such promises, its proposed rule would create an unfair playing field and confound consumers’ reasonable expectations about how their viewing habits can be monetized if the rule were to be established.

The proposed rule is being rushed through without sufficient time or attention to its economic impact. The 30-day comment period immediately followed by a 30-day reply period has all the appearances of a rushed process that cannot allow for a proper economic impact analysis by the Commission or those affected by the rule.  Since we and many other advocates of a free economy predict that both consumer welfare and the current contract-based industry are likely to suffer harm if the rule is adopted, it is particularly important to consider very carefully the economic impact of such sweeping regulation of a competitive, well-functioning video services market.

For the foregoing reasons, we strongly oppose the Commission’s proposed set-top-box regulations.

Sincerely,

60 Plus Association
American Commitment
American Conservative Union
American Majority
Americans for Job Security
Americans for Prosperity
Americans for Tax Reform
Center for Individual Freedom
Competitive Enterprise Institute 
Digital Liberty
Discovery Institute 
Independent Women’s Forum
Institute for Policy Innovation
FreedomWorks
Frontiers of Freedom
Grassrot Hawaii Action
Harold Furchtgott-Roth, Former FCC Commissioner
Less Government
Log Cabin Republicans
Property Rights Alliance
Taxpayers Protection Alliance