Unbundling The Set-Top Box

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Somewhere, Steve Jobs is smiling. Nearly six years after the late Apple CEO complained that real innovation in the TV industry could only happen if you first “tear up” the traditional pay-TV set-top box, the FCC is taking the first steps toward doing just that.

FCC chairman Tom Wheeler this week announced that the commission will vote next month on whether to proceed with a formal rulemaking to “unlock the set-top box,” if not quite tear it up, by requiring cable, satellite and telco pay-TV providers to make elements of their service available to third-party device makers and software developers.

“Today, 99 percent of pay-TV customers lease set-top boxes from their cable, satellite or telco providers,” Wheeler wrote in an op-ed published Push_button_cable_boxWednesday. “Pay-TV subscribers spend an average of $231 a year to rent these boxes, because there are few meaningful alternatives. If you’ve ever signed up for a $99-a-month bundle for cable, phone and Internet and then wondered why your bill is significantly higher, this is a big reason…This week, I am sharing a proposal with my colleagues to tear down the barriers that currently prevent innovators from developing new ways for consumers to access and enjoy their favorite shows and movies on their terms. The new rules would create a framework for providing device manufacturers, software developers and others the information they need to introduce innovative new technologies, while at the same time maintaining strong security, copyright and consumer protections.” Read More »

FCC Hitting Pause On Pay-TV Overhaul?

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For much of the past year, the Federal Communications Commission has been conducting a pair of proceedings that together, depending on their outcomes, could go a long way toward remaking the pay-TV business as we’ve known it. But at an oversight hearing before the House Energy and Commerce Committee yesterday, FCC chairman Tom Wheeler seemed to turn down the heat under both of them.

Receiving the most attention at the hearing was the recently completed report by the Downloadable Security Technical Advisory Committee Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearing(DSTAC), in particular a controversial proposal in it to require pay-TV operators to disaggregate their services into discreet components that would allow third-party set-top box makers to design their own user interfaces that could leverage elements of pay-TV services to create new user experiences (see our previous discussions of the debate here, here and here).

Republican members of the committee were sharply critical of the proposal and accused the FCC of exceeding Congress’s mandate for DSTAC in allowing the committee to consider non-security elements of pay-TV interoperability. Some members all but endorsed a competing proposal, put forth by pay-TV service providers, to adopt an app-based approach to interoperability under which service providers would, in effect, virtualize their existing STBs, complete with proprietary UIs, into apps that could be downloaded and run on third-party devices. Read More »

The Wrong Debate Over Set-Top Boxes

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Today (Nov. 9th) was the last day for filing comments with the Federal Communications Commission regarding the final report of the Downloadable Security Technical Advisory Committee (DSTAC) and folks in the pay-TV industry were clearly getting nervous that the FCC might finally, really do something this time to “tear up the set-top box.”

Last week, eight of the largest pay-TV providers, along with the National Cable & Telecommunications Association, the Motion Picture Association Push_button_cable_boxof America, and several equipment manufacturers together sent a phalanx of lawyers and lobbyists to FCC headquarters, ex parte, in a desperate bid to head off any movement by the agency toward a rulemaking that would require pay-TV providers to disaggregate their services into rearrangable  parts as proposed by the technology company and public interest faction of DSTAC.

The group was particularly exercised by an ex parte filing with the commission in late October by Public Knowledge, Google, Amazon and Hauppauge purporting to fill in the technical details of the “virtual head-end” proposal made by the technology faction of DSTAC for separating out the components of pay-TV services. According to MPAA, NCTA et. al., however, the new version “is so changed that it is barely recognizable from [the technology group’s] earlier proposal in the DSTAC Report,” and required more time for study before they could adequately respond to it. Read More »

The Studios Look For An Island In The Set-Top Storm

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The Motion Picture Association of America really, really doesn’t want the FCC to tear up the set-top box. So much so that its filing with the commission last week regarding the final report of the Downloadable Security Technical Advisory Committee (DSTAC) contained a thinly veiled threat of litigation should the FCC mandate disaggregation of pay-TV services into parts that can be reassembled at will, and on constitutional grounds no less.

“Mandating such a regime…could violate content owners’: 1) contracts with distributors regarding how their content may be presented, monetized, and accessed; 2)

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exclusive rights under section 106 of the Copyright Act to determine how their content is copied, distributed, and publicly performed; 3) First Amendment right against compelled speech; and 4) Fifth Amendment right against taking of property without due compensation,” the MPAA warned. “If third-parties wish to offer a subset of content, services, features, and functions rather than all the choices distributors offer customers in the way that they offer them, the appropriate course is through individualized negotiation, not regulatory fiat.”

What has the Hollywood trade group so exercised is a proposal by one faction within DSTAC, included in the final report, to require cable and satellite providers to unbundle their video feeds from other elements of their services, including the user interface, interactive features and billing, so those feeds can be incorporated into the UI of a third-party device and integrated with other video services. Only then, proponents of unbundling argue, can consumer electronics makers create devices that can compete fully with or replace set-top boxes provided by pay-TV operators. Read More »

Will The FCC Finally ‘Tear Up The Set-Top Box’?

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The FCC kicked off the second phase of a process this week that could, eventually, change how pay-TV service is delivered to the home and by whom. On Monday, the commission issued a formal notice seeking comments on a set of proposals developed by the Downloadable Security Technology Advisory Committee (DSTAC) for how to enable third-party retail set-top boxes to better interoperate with pay-TV services. DSTAC submitted its proposals last week and the FCC posted six-page summary of its report on Friday [note: the FCC’s IT system will be inaccessible  until Sept. 8 due to an upgrade, so links temporarily may not work].

The first phase of the process began in January, when the FCC convened DSTAC at the direction of Congress. As spelled out in the Satellite Television Extension and Locset-top_box_openalism Act Reauthorization law (STELAR) passed last December, DSTAC’s mandate was to “identify, report, and recommend performance objectives, technical capabilities, and technical standards of a not unduly burdensome, uniform, and technology- and platform-neutral software-based downloadable security system designed to promote the competitive availability of [pay-TV] navigation devices in furtherance of section 629 of the Communications Act of 1934.”

It did not go well. From the beginning there was disagreement within both the committee and the FCC as to the proper scope of the mission and the committee soon devolved into two opposing and roughly equal camps, with pay-TV providers and equipment makers on one side, and CE makers and technology companies, along with consumer advocates, in the other. In broad strokes, the first camp wanted to focus the discussion narrowly on the technical aspects of downloadable security, while the latter camp sought to focus the discussion more broadly on the goal of “promot[ing] the competitive availability of navigation devices” including security and non-security elements of pay-TV service. Read More »