FCC Chairman Wheeler Opts for More Regulations by Resurrecting AllVid Proposal

Michi Iljazi

February 17, 2016

The Federal Communications Commission (FCC) and its current Chairman Tom Wheeler aren’t very good at many things, but one thing Wheeler’s FCC excels at is expanding the regulatory reach of the agency. The Taxpayers Protection Alliance (TPA) remains constantly engaged in the fight against the Wheeler-Obama “net neutrality” Internet regulations, and the increasing number of municipal (i.e. taxpayer-funded) broadband systems in cities across the country. The FCC is once again trying to expand its regulatory reach; this time it is Chairman Wheeler’s recent proposal for rulemaking on unlocking set-top boxes for cable television.

The future of set-top boxes has been an oft-discussed telecommunications topic for years.  Set-top boxes are how many cable customers receive their content from local cable companies such as Verzion, Comcast, Time Warner etc. As technology advances and consumers feel the squeeze of increasing hardware costs, many individuals are looking for a better way to have their services delivered. Section 629 of the Telecommunications Act of 1996, Competitive Availability of Navigation Devices, lays out the impetuous for what the FCC has been trying to accomplish with set-top boxes. Previously, the agency (taxpayers) poured more than $1 billion into the failed CableCARD program, and now they want to resurrect a proposal, known as “AllVid,” that has been repeatedly fought every step of the way, and for good reason.

AllVid, per Wheeler’s proposal, would work by requiring traditional pay-for-TV providers to make video programming available to third-party devices. Wheeler’s proposal has been met with a flurry of criticism from many key players in the telecom and tech community mainly because it isn’t an all-inclusive approach, even though it is being sold that way. While the goal of AllVid is to “unlock” the content of set-top boxes so that all can compete, the problem is the way in which the content and programming is negotiated, advertised and delivered would be upended and most of the power over content location and advertising would go to the regulators. Simply put: AllVid is more government regulation disguised as progress.

All throughout the course of the discussion to fulfill Section 629, the general idea was that any move to solve the problem of the set-top box debate would be one that took into account both hardware and software components.  This is what seemed to be the general indication after a report from the FCC-appointed Downloadable Security Technology Advisory Committee (DSTAC). There are so many new devices, and there are also new programs online to deliver the content that it would only make sense to use both paths when crafting a new way forward beyond the traditional cable box.

Unfortunately, AllVid isn’t all-inclusive, as Adonis Hoffman (who served as chief of staff and senior legal adviser to a Democratic FCC commissioner), noted in The Hill:

In the draft proposal, Wheeler has made a deliberate decision to focus on the navigation hardware system, and ignore the apps approach altogether. In doing so, he has put a thumb on the regulatory scale. His decision has tremendous implications for the future of this market, and is tantamount to the referee picking the winner of the Super Bowl before the kickoff. The most glaring irony altogether is that everybody would like to see the set-top boxes we all know and loathe go away.

Furthermore, the problems AllVid creates with this skewed approach will also affect consumers on cost and convenience. Neil Fried, who serves as Senior Vice-President of Government and Regulatory Affairs with the Motion Picture Association of America (MPAA) elaborated on this last week:

AllVid may actually make matters worse by creating regulatory inertia around third-party and pay-TV provider set-top boxes, rather than supporting the apps on Internet-enabled devices that are so popular with audiences. In fact, many engineers believe that to be able to access all of today’s video service functionality under the AllVid proposal, subscribers would still need a new device in the home, in addition to whatever device they want to use to access the content. So instead of saving any set-top box shelf space, they may just be adding to the clutter.

The FCC 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. Stakeholders representing a wide-range of industries are ready to work with the agency on a proposal that would include both hardware and software components as a way to ensure that free and fair competition remains the standard. Unfortunately, Chairman Wheeler is using regulations to box-in (pardon the pun) content providers with AllVid.

Chairman Wheeler shouldn’t be using the decades-old Telecommunications Act nor a recycled and rejected proposal to expand regulations and diminish competition for content delivery. 

Policymakers should take into account all options when looking at how the FCC should proceed with the future of set-top boxes, and that includes an app-based approach. TPA hopes that the proposed rulemaking vote this Thursday is a step toward a more inclusive, and consumer-friendly approach.   Taxpayers and consumers need an FCC that takes a light touch when deciding new rules and regulations.