FCC Pulls Set-Top Box Proposal From Meeting Agenda

The FCC has called off a planned Thursday vote on a contentious proposal that would require that cable and satellite operators offer a free app so subscribers could forgo the rental of set-top boxes.

“We are still working to resolve the remaining technical and legal issues and we are committed to unlocking the set-top box for consumers across this country,” FCC Chairman Tom Wheeler, Commission Mignon Clyburn, and Commissioner Jessica Rosenworcel said in a statement released about a half an hour before the meeting.

Rosenworcel has been seen as the key vote for passage of the proposal, but earlier this month, at a Senate hearing, she expressed reservations over the plan’s creation of a licensing body to authorize device manufacturers and streaming services to use the app. Studios and programmers have objected to plans for FCC oversight of the licensing body, and have characterized it as akin to a “compulsory copyright license.”

The FCC said that the proposal would be put on the commission’s circulation list and would remain under consideration.

“It’s time for consumers to say goodbye to costly set-top boxes,” the three commissioners said in a joint statement. “It’s time for more ways to watch and more lower-cost options. That’s why we have been working to update our policies under Section 629 of the Communications Act in order to foster a competitive market for these devices. We have made tremendous progress — and we share the goal of creating a more innovative and inexpensive market for these consumer devices.”

In recent days representatives from Wheeler’s office and Rosenworcel’s staff have been trying to resolve the licensing issues, and the delay signals that they hadn’t yet come to a final agreement.

At a press conference after the FCC meeting on Thursday, Wheeler said that the delay was a matter of timing, and he suggested that commission staff still needed time to review the latest details.

“It is not unusual that commission items run up to the last minute,” he said. “The point of the matter is that we ran out of time.”

He added, “All that has happened here is that the deliberative process that has been going on continues to go on.”

In an FCC filing last week, a group of studios and programmers, including Scripps Networks Interactive, CBS Corp. and The Walt Disney Co., said that they would object to “any arrangement in which they are required to allow their content to be distributed on terms or conditions to which programmers would not agree would be tantamount to a compulsory copyright license.”

But an FCC spokeswoman defended the proposal earlier this month, noting that it “prohibits altering terms of contracts between programmers and pay-TV providers” and that the commission’s oversight would be limited. Supporters of the proposal say that copyright protections would remain in place, and that control of the app would remain in the hands of a cable provider. In other words, subscribers would access the same channel lineup as they do via set-top boxes.

The two Republican-appointees on the commission, Michael O’Rielly and Ajit Pai, were expected to vote against it.

Multichannel distributors, such as cable and satellite companies, also oppose the plan, and even if it passes there is a likelihood that they would mount a legal challenge.

Wheeler unveiled a proposal to “unlock the box” earlier this year, which would have required that a cable operator provide their feeds to device makers who could sell competing boxes to consumers.

After fierce opposition from programmers and the cable and satellite industry, Wheeler unveiled a compromise proposal earlier this month that called for multichannel distributors to offer a free app. But that plan, too, was met with criticism. At the recent Senate hearing, he signaled that he was open to further changes in the proposal. Last week studios met with FCC officials and discussed an alternative plan in which the agency would conduct a review of the marketplace in 2020, in lieu of oversight.

The proposal also calls for “real cross-platform search,” in which a consumer could search for content in one place. For example, if they searched for the title of a TV series, the results would show the availability on apps from the likes of Comcast, Netflix, and CBS. While that would be beneficial to promoting a studio or network app, entertainment industry lobbyists have also raised concerns that their content would compete in search results with pirated options.

Wheeler has stressed that the rationale behind the proposal is a congressional mandate for competition in TV navigation. He has cited studies that households spend an average of $231 per year on rental fees.

A group of lawmakers on Capitol Hill last week called on Wheeler to put the proposal back up to another public notice, which would trigger a new comment period.

David L. Cohen, senior executive vice president of Comcast, said in a statement that “it is now critical that the Commission heed the bipartisan calls of dozens of members of Congress and respected third parties and release its new proposal and associated rules to allow the public to provide comment. This is an extremely complicated and technical item that should not be adopted without the opportunity for expert and public input.”

Wheeler, however, said that the set-top box proposal already has been subject to extensive public comment periods.

Related stories

FCC Nears Vote on Contentious Set-Top Box Proposal

FCC Chairman Says He's Open to Changes in Set-Top Box Proposal

FCC's App Proposal Would Do Away With Set-Top Boxes, But Big Cable Is Pushing Back

Get more from Variety and Variety411: Follow us on Twitter, Facebook, Newsletter