Cable Providers And Hollywood Blast Plan For Mandatory Apps

The Federal Communications Commission lacks authority for its new plan to enable consumers to stop renting set-top boxes, cable providers and other opponents say.

The plan, unveiled Thursday by FCC Chairman Tom Wheeler, would require cable and satellite providers to make TV programs available to subscribers through apps that would run on popular platforms, including Roku, Apple, iOS, Windows and Android. If the proposal passes, consumers will no longer have to spend an average of rent set-top boxes from their cable companies, at an average cost of $231 a year, in order to watch TV. Instead, most cable and satellite subscribers will be able to watch programs on smartphones, tablets and other devices.

The proposal also includes provisions for licensing. While the details haven't yet been fully disclosed, the FCC said Thursday that the new rules will require "a standard license governing the process for placing an app on a device or platform."

The FCC said in a fact sheet that programmers "will have a seat at the table to ensure that content remains protected."

"The license will not affect the underlying contracts between programmers and pay-TV providers," the agency added. "The FCC will serve as a backstop to ensure that nothing in the standard license will harm the marketplace for competitive devices."

Opponents to the plan, including Comcast, AT&T and the Motion Picture Association of America, are now arguing that the licensing scheme proposed by the FCC is illegal.

"Rather than allowing the [pay-TV providers] to enter into license agreements with third parties’ competitive navigation device providers, as they do today, the FCC is concocting a separate licensing body that would create (dictate) a single, one size fits all license," AT&T says in a blog post. "By usurping the free marketplace and the rights of the content creators in this regard, the FCC has in effect ... created a “compulsory copyright license,” clearly outside of the FCC’s jurisdiction."

The MPAA also objects to the idea of a compulsory license. "Whether through a licensing body subject to FCC review or otherwise, the FCC must not encroach upon copyright holders' discretion in how they exercise or license the exclusive rights Congress granted them," the organization stated.

Comcast adds that the proposal "violates the Communications Act and exceeds the FCC's authority."

The plan "stop the apps revolution dead in its tracks by imposing an overly complicated government licensing regime and heavy-handed regulation in a fast-moving technological space," Comcast states. "Heavy-handed government technology mandates have a long history of failure."

Wheeler's new proposal came more than eight months after he put forward a more ambitious plan for regulations that would let Google, Amazon and other companies develop set-top boxes that could access pay-TV programs. That original plan was supported by the White House and consumer groups. But the potential regulations met with strident opposition from cable companies, as well as content providers and the ad industry.

The cable industry countered with a plan to make content available via apps. But the providers' proposal -- known as "ditch the box" -- didn't include provisions for a licensing organization.

"Apps allow innovation to flourish, while protecting privacy, security and copyright," AT&T stated Thursday evening. "Yet, while outwardly embracing apps, the Chairman’s latest proposal undermines those fundamental protections that an app environment provides by requiring disclosure of entitlement data, by creating a new licensing body that the FCC will oversee, and by extending their rules beyond set-top box replacements to mobile apps."

The FCC is scheduled to vote on the proposal on Sept. 29.

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