In comments filed to the FCC, AT&T (NYSE: T) said the agency's proposed set-top regulations "bears no relationship" to mandates established by Section 629 of the Communications Act and is essentially a "radical unbundling scheme."
"The NPRM's proposed scheme is therefore indefensible as a matter of law and nonsensical as a matter of public policy," the AT&T filling said. "Without basis in Section 629's text, the scheme deprives MVPDs of established copyright rights, infringes their constitutional rights under the First and Fifth Amendments, and would not survive legal challenge. And, as a matter of policy, it makes no sense to require that one company can commandeer its competitors' assets and branding in the way these commenters suggest.
"Netflix, Hulu, and Amazon do not permit their licensed content, look and feel, and packaging of their video apps to be distributed through any interface but their own," the filing added.
AT&T also noted that after Comcast (NASDAQ: CMCSA) announced plans to enable Roku streaming boxes and Samsung smart TVs to process X1 video signals without a set-top, "the commission and commenters should have embraced the Comcast proposal with enthusiasm as fulfilling Congress's goal in Section 629. Instead, an unnamed 'commission official' was immediately dismissive:
The American Cable Association, meanwhile, leaked a preview of comments it plans to make to the agency.
According to the ACA, implementation of the FCC's proposals will stick small MVPDs with $1 million in upgrade costs to satisfy the mandates. The ACA predicts more than 200 smaller MSOs would exit the video business as a result.
"For those that do manage to stay afloat, they'll be faced with having to forgo important investments in innovations and broadband expansion or pass on increased costs to their subscribers," ACA added.
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