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February 2016

FCC Examines State of Video Programming Diversity

The Federal Communications Commission issued a Notice of Inquiry (NOI) to begin a conversation on the state of independent and diverse programming. The NOI solicits comment on the principal challenges independent video programmers face in gaining carriage of their content on both traditional and emerging distribution platforms.

This action will help the FCC assess the current state of video programming diversity and determine whether further action is needed to promote independent programming sources. Independent video programmers repeatedly have expressed concern that some practices of cable operators and other multichannel video programming distributors (MVPDs) limit their ability to reach viewers. To evaluate these concerns and assess the impact of these practices on the Commission’s goal of fostering a diverse, robust, and competitive programming marketplace, the NOI asks for comment on the general state of the marketplace for independent video programming and the challenges faced by all independent programmers – including new and emerging programmers – in attempting to launch or grow.

The NOI specifically invites comment on several issues that independent programmers and other interested parties have raised in other proceedings, including:

  • Contractual provisions often contained in program carriage agreements, such as most favored nation (MFN) and alternative distribution method (ADM) clauses;
  • Distribution via over the top (OTT) platforms, and the costs and benefits of foregoing MVPD carriage to pursue OTT carriage;
  • Program bundling (i.e., the practice by some content companies of requiring MVPDs or other distributors to carry large bundles in order to gain access to marquee programming);
  • Negotiation tactics alleged to be common among MVPDs that may impede the ability of independent programmers to obtain carriage; and
  • Claims that MVPDs discriminate against public, educational or government access (PEG) programming by failing to make PEG programming, and information about this programming, adequately available to subscribers.

Lastly, the NOI asks about the FCC’s legal authority in this area and what role, if any, it should play in addressing obstacles that hinder consumers from accessing sources of independent and diverse programming.

FCC Proposes Rules to "Unlock the Box"

The Federal Communications Commission approved a proposal that would tear down anti-competitive barriers and pave the way for software, devices, and other innovative solutions to compete with the set-top boxes that a majority of consumers lease from pay-TV providers today. The Notice of Proposed Rulemaking (NPRM) will create a framework for providing innovators, device manufacturers, and app developers the information they need to develop new technologies, reflecting the many ways consumers access their subscription video programming today. The NPRM provides the framework to “unlock the box” for innovators to create competitive solutions – either hardware or software-based apps — that give consumers freedom of choice.

Specifically, it recommends that pay-TV providers be required to deliver three core information streams:

  • Service discovery: Information about what programming is available to the consumer, such as the channel listing and video-on-demand lineup, and what is on those channels.
  • Entitlements: Information about what a device is allowed to do with content, such as recording.
  • Content delivery: The video programming itself

The Notice of Proposed Rulemaking also recommends content protection rules that provide MVPDs flexibility. The proposed rules do not mandate a single security system but simply require MVPDs to offer at least one content protection system that is openly licensed on reasonable and non-discriminatory terms. This gives MVPDs the ability to create their own content protection system to prevent theft and misuse, while ensuring that manufacturers will be able to build devices that can access protected content from a variety of MVPDs. The proposal seeks to maintain programmers’ existing agreements with MVPDs and full copyright protections and remedies. The proposal tentatively concludes that new device or app developers should certify compliance with similar privacy protections to those that MVPDs comply with today.

Additionally, the NPRM proposes to:

  • Ensure that children’s programming advertising limits and emergency alerts apply regardless of whether the consumer leases the MVPD’s set-top box or uses a competitive solution to access video programming;
  • Include a billing transparency rule to ensure that consumers understand their monthly charges for both programming services and equipment lease fees in accordance with section 629; and
  • Retain the FCC’s rules adopted in a 2010 Report and Order to improve support for consumer-owned CableCARD devices.
  • It also includes a Memorandum Opinion and Order removing the so-called “integration ban” language from the Code of Federal Regulations, as required under Section 106 of the STELA Reauthorization Act of 2014

Set Top Box Competition: What’s Not to Like?

[Commentary] Only in this pay to play, partisan world could two out of three Federal Communications Commission members rise in opposition to an overdue initiative to save consumers billions of dollars.

Cable and DBS companies will join the opponents along with sponsored researchers who will trot out all sorts of bogus rationales. I’ll start by using two words to dismiss what appears to be the first gambit rationalizing a monopoly set top box marketplace. The narrative goes something like this: “Why fix something that isn’t broken? Just look at those so-called Tivo boxes. Have you seen their prices? My response in two words: umbrella pricing. Tivo charges what the market will bear, and in an artificially uncompetitive market it can use the outrageous set top box rental box rates to establish an equally outrageous sale price. If the FCC removes the government-sanctioned near monopoly, then cable, DBS and set top box manufacturers simply will have to sharpen their pencils and offer consumers a far better value proposition.

FCC Enhances Accessibility of Video Programming on Television

The Federal Communications Commission adopted amendments to its rules on closed captioning of televised video programming to ensure that millions of Americans who are deaf and hard of hearing have full access to programming.

This action helps clarify which entities are responsible for which parts of the delivery and quality of closed captions on television. The order clarifies that responsibility for the quality of closed captioning falls on video programmers that prepare or make arrangements for the captions on their television shows, while the delivery and technical aspects of captioning remains the responsibility of distributors (such as cable or satellite companies). The FCC allocates the responsibilities for addressing and resolving closed captioning provision and quality control issues between video programmers and distributors, based on which entity has primary control for each issue. The Order also modifies and improves the captioning complaint procedures and certification process.

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