Competition and Innovation Principles will Help FCC “Unlock the Box”

By Chip Pickering

After 20 years of false starts and delay, competition may finally be coming to the cable set-top box. Competition is the law, and has been since Congress passed the Telecommunications Act of 1996. But thanks to a forward-looking FCC, consumer relief may be in sight.

The FCC’s effort to unlock the set-top box began by embracing clear goals for opening the market: bring more competition, lower prices and unleash innovation.

To help achieve these goals, the nation’s leading consumer groups, innovative technology companies, content creators and competition advocates united as the Consumer Video Choice Coalition (CVCC) to present the FCC with a workable, technologically sound solution built on interoperability and open standards. It is modeled after successful competitive markets for other devices, such as televisions, computers and smart phones that enable consumers to lawfully watch video content of their choice.

We are encouraged the cable industry has finally recognized the massive consumer driven pressure to unlock the set-top box and give consumers cost saving alternatives. The Wall Street Journal recently reported 84 percent of Americans say cable prices are too high, and 69 percent said more competition was the answer.

The cable industry’s recent proposal makes some forward progress. However, it has only been presented as a brief one-pager with little detail, and raised a number of questions. We trust that the FCC will continue to seek answers to better understand the implications of the proposal.

Despite the proposal’s brevity, we believe it is important to recognize the cable industry’s evolution in the following important areas:

Choice. First, the cable industry recognizes that consumers should have the ability to purchase their own video delivery devices, rather than being forced to rent a box from a pay TV provider. While we applaud the cable industry for supporting consumer choice for streaming devices, any proposal must take the logical extension to include DVR and video recording devices as well.

Search. Second, integrated universal search is a consumer-friendly tool for viewers to find content on both cable and on internet streaming services like Hulu, Amazon and YouTube. While the cable industry has called these delivery platforms “second-class,” consumers are indeed flocking to their first-rate content. Critical questions remain as to the degree the industry is willing to accept integrated search and advanced discovery in its proposal — a point recently echoed by Roku. An open user interface and integrated search are essential to connecting consumers with independent programming not included on the cable tier, internet streaming services and other apps.

Copyright, Privacy, Licensing. Third, we applaud the cable industry for recognizing that accessing video content through competitive devices, apps and box free software platforms can be done in a safe, lawful manner that does not violate copyright, privacy or licensing agreements. As we have noted, all these protections are possible under CableCARD as well as Comcast’s previous True2Way proposal and are currently working in the market today for thousands of other devices including TVs, tablets, smartphones and computers.

Now that cable has joined the conversation, we believe the FCC has solutions in front of them that can easily be combined to simplify the process and deliver great benefits for consumers.

While there are still many questions to be answered, the CVCC today is presenting a set of consumer driven competition and innovation principles necessary to help achieve the FCC’s goals.

The Competition and Innovation Principles:

Open Innovation:

Consumers do not want to move from a closed box to a closed app. They want more choice, more innovation and easy access to internet streaming content from new independent and minority-owned programmers.

As the White House indicated, innovation in this sector is critical to economic growth. We need access for startups and entrepreneurs, many of which may not exist today. This will create more jobs for device makers, programmers, app developers and content creators.

We believe the principles of an innovation sandbox that encourages “innovation without permission,” must be included in any FCC action. An open and independent user interface, provided in conjunction with the common IP delivery system of the cable proposal, would accomplish this goal.

Functionality:

For the FCC proposal to be a step forward for competition, it must not take a step backward on functionality. We must ensure access to functions consumers rely on, including DVR functionality, the ability to record content at home, fast forward and other features that both cable set-top boxes DVR and competitive devices with a CableCARD offer today. Excluding core functions via a closed apps proposal would create the dreaded “two box” scenario for consumers who want to record live TV — a point we should all agree is counter to the FCC’s goals, bad for the environment and bad for the wallet.

Interoperability:

Interoperability is the foundation by which competitive markets for televisions, computers and smart phones have been built. If apps are part of the future, then presenting them in a format that makes them easily available to device makers and consumers is key.

Enforceability:

Consumers have waited two long decades for video delivery device competition. Over the years, the cable industry has made several, well-documented proposals for ending the closed proprietary cable box that have not materialized. In addition, recent press accounts indicate some cable companies are deploying 40,000 boxes a day, with business models dependent on this hardware.

Again, while we appreciate the progress in the cable industry’s proposal, in order to ensure that words become actions, it is essential for the FCC to adopt strong enforcement provisions, rather than agree to voluntary offerings.

From the nation’s leading consumer groups, to editorial boards and TV news outlets around the country, support for FCC action to bring competition to the set top box is overwhelming. We are encouraged by recent developments and believe solutions that unlock the future of innovation and consumer benefit are at hand. Now is the time, and we must not delay.

Chip Pickering is the CEO of INCOMPAS, and a Member of the Consumer Video Choice Coalition @ChipPickering @INCOMPAS