The Wrong Debate Over Set-Top Boxes

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.

The FCC rejected MPAA et. al.’s motion to extend the comment deadline by 30 days, however, ratcheting up the level of alarm among pay-TV operators and content owners — already at about Defcon 3 — that the FCC is getting ready to move on a rulemaking based on the virtual head-end proposal.

There’s no guarantee the FCC will do anything at this point. But if it were to move ahead with a virtual head-end proposal it would be a remarkable shift in focus for what began — purportedly — as a wonky engineering exercise around technical requirements for downloadable security. While some engineering got done, it’s clear from the public comments filed with the commission that the debate over the DSTAC report has devolved largely into an argument over user interfaces, which are nowhere explicitly mentioned in the Congressional mandate establishing DSTAC.

One camp, the virtual head-end group led by Google, Amazon and Public Knowledge, wantsto ensure that device makers are able to design their own user interface, into which multichannel video service can be incorporated without restriction from the video service provider. The other, led by multichannel video service providers and their content-owner partners, favor an apps-based approach, in which the existing pay-TV set-top box wouldn’t be dismantled so much as virtualized, into an app, to be implemented unchanged, complete with the service provider’s proprietary UI, on IP-connected devices.

Equally remarkable is that the FCC itself, while it contemplates whether to force MVPDs to virtualize their head-ends, is also contemplating changing the rules on who qualifies as an MVPD, making it uncertain at this point to whom any new mandate regarding disaggregated services might apply.

The virtual head-end proposal currently on the table (as described either in the DSTAC report or the latest ex parte), is clearly designed with facilities-based MVPDs in mind. Should the FCC ultimately decide to define online video distributors (OVDs) as MVPDs subject to the MVPD regulations, however, many of the technical requirements of the virtual head-end mandate would effectively become non sequitur.  Their “head-ends” are already virtual, and yet they also all have their own, proprietary interfaces. Would those interfaces have to be stripped if OVDs become MVPDs?

If, on the other hand, the FCC should decide not to apply the disaggregation mandate to OVDs that would create a powerful incentive for today’s facilities-based providers to migrate off their fixed networks onto the internet. That might suit some at the FCC just fine, but if today’s incumbent providers remain the only ones capable of licensing content at scale it raises the question of what the mandate will have achieved.

Additional irony: The most intriguing ne4w third-party set-top box on the market today is the new Apple TV, which is entirely app-based and was developed by a company publicly committed to an app-based future for television. And at least some virtual MVPDs, like Sling TV, are considering turning themselves into apps to be part of it.

Moreover, as suggested here in a previous post, Apple may have found a way to finesse the whole UI question by using Siri and Proactive search in iOS to abstract content discovery and access from individual apps. It’s early days yet, but if Apple’s apparent strategy with Apple TV is successful it could render much of the current debate around DSTAC moot.

To be fair, the current, confused state of affairs is not entirely the fault of the FCC. Fostering a competitive market for set-top boxes that can interoperate with multichannel video services has been the official policy of the United States since 1996, when Congress passed the Telecommunications Act, and it remains very much a live issue in Congress today. It was Congress that directed the FCC to convene DSTAC, in furtherance of that goal.

Yet few in 1996 were would have thought through the implications of non-facilities based, IP-delivered MVPD services. Even among those hip to the coming IP future, few could have contemplated the impact of apps or the implications of app-based distribution of content.

Questions concerning devices and delivery modalities are essentially analog questions, and focusing on them can only result in essentially analog outcomes. If Congress and the FCC really want to effect change in how content is made available to consumers they’d be better off focusing on how content is licensed than on how it’s delivered.