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Much of the entertainment establishment continues to be furious at FCC chairman Tom Wheeler over proposed rules that could radically reshape the television industry. As the media regulatory agency now prepares to move towards establishing open standards for set-top boxes, the question becomes: What’s next?
In January, Wheeler presented rules that would require cable and satellite operators to provide “information streams” so that creators of apps and devices would have both content and an understanding of what they are allowed to do with content. The following month, the FCC voted to advance the proposal with the hopes of injecting competition into a cable set-top box market that currently has consumers paying on average $231 a year in rental fees. On Friday, stakeholders were given their last chance to comment, but with President Barack Obama throwing his weight behind the proposed rules as a leading example of innovation in his last days in office, it would be surprising if the Democratic-dominated FCC retreats now. Insiders admit as much. Word is that FCC staffers are fed up with years of “foot-dragging” by the cable industry.
But there are still issues to sort out, and while the establishment will talk a big game by passing around a favored opinion piece (See The Walking Dead producer Gale Anne Hurd’s “FCC Proposal Would Make Zombies of Your Favorite TV Shows“), the truth may be that the real action is making sure the FCC commissioners understand the headache being undertaken plus shaping the devlish details.
The proposal envisions an independent open standards body charged with coming up with the format of three information streams — what programming is available, entitlements and content delivery — but there’s certainly a lack of clarity about how all of this is going to work.
In a joint comment, the Motion Picture Association of America and the Screen Actors Guild discuss this. First, of course, they reiterate how much they hate the proposal, hint at potential First and Fifth Amendment appellate challenges and give their opinion that the rule changes will destroy both licensing incentives and carefully calibrated contractual provisions dealing with security requirements, advertising rules, channel placement obligations and so forth.
Then, they submit these questions:
“Who determines whether a standards body qualifies as open, how and when is that determination made? Do any existing standards bodies meet the FCC’s criteria? Is the same standards body responsible for creating the three information flow standards and the security solutions? Does the standards body define what is in the three information flows or does the FCC? Can there be multiple standards bodies? Do they all have to abide by the same definitions of what is in the information flows? What requirements will there be regarding who must be allowed to participate in the standards body and the process for decision-making? How does one challenge a decision of the standards body or trust authority?”
In other words, give us a seat at the table.
Yet more questions from the MPAA/SAG:
“Licensing agreements also usually require MVPDs to update security measures in case of a breach. How do copyright holders ensure third parties also engage in such updates? How do they monitor how third parties provide content to viewers to ensure the third parties they are abiding by entitlements and other content-related requirements? How does a copyright holder seek enforcement of the FCC’s requirements? Would it file a complaint with the FCC? With the standards body or the trust authority? Against the MVPD? Against the third party? When it comes to a hack or improper handling of content by third parties, copyright holders must be allowed to require MVPDs to suspend the content stream. Are consumers and the FCC prepared for viewers to lose access? Do third parties get fined for violations? How are copyright holders compensated for injury when there is no privity and thus no contractual basis for suit? Programmers themselves have certain consumer obligations. If the third party fails to pass through information needed to meet those obligations, are programmers held culpable?”
And so forth, culminating with the cute line, “It is not good enough to fall back on the old Hollywood saying: ‘We’ll fix it in post.’”
That, of course, is just one segment of the entertainment industry. Content owners hope to ensure the continued existence of various revenue streams (carriage fees, advertising, on-demand streaming, etc.) and while the FCC can make modifications that address concerns, the agency seems almost destined to square off in court with a different constituency — cable and satellite companies upset about the ramifications of disaggregating content (with the potential to give a leg up to upstarts in the television sphere like Google and Apple.) Here’s the voluminous comment from the American Cable Association.
Not everyone in Hollywood is against what the FCC is doing. The Writers Guild of America, West has from the beginning been supportive of the proposal and speaks in its own comment how competition in set-top boxes “would reduce the gatekeeper power of television networks and MVPDs over video programming.”
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