Continuing to hammer away at FCC Chairman Tom Wheeler's proposal to create new regulations the pay-TV set-top leasing business, AT&T (NYSE: T) noted that would-be third-party set-top manufacturers like Google (NASDAQ: GOOG) wouldn't be beholden to the same privacy requirements as cable and satellite operators.
"The FCC has not identified any legal authority to impose these rules on third parties, like Google, and other federal and state rules do not set forth the same requirements," said Stacy Fuller, AT&T VP of federal regulatory, in a blog post.
"I keep hearing that we shouldn't worry about privacy because Google will be subject to 'similar' rules as cable and satellite, or that they'd be subject to other federal and state rules," Fuller said. "Satellite and cable providers are specifically required under Section 338 and Section 551 of the Communications Act to send detailed privacy notices and obtain prior written consent to use their subscribers' individual viewing history or other personally identifiable information for things like targeted advertising. These provisions only apply to satellite and cable. And the 'other' federal (FTC) and state rules that may apply to Google and others do not include the same prescriptive requirements. Consumers have no expectation that different privacy rules apply, depending on which company provides their set-top box."
Speaking to the Washington Post last week, Wheeler said he'd ask that third-party manufacturers voluntarily adhere to existing privacy regs to get access to set-top data.
Also speaking to the Post, Milo Medin, VP of access services at Google, dodged the question of if and how Google might use data in a pay-TV set-top device — since the company doesn't currently have such a product, he said, the point is moot.
"Our advocacy of this has not been with a specific product in mind," Medin said.
Fuller also said that since third-party manufacturers wouldn't be bound by the terms of programming contracts that govern channel placement and advertising, independent, minority-targeted channels could be left out in the cold.
"Minority programmers are worried that existing advertising revenues (which are the dollars they use to create their content) will be significantly impacted by the Google proposal," Fuller said. "They have questions about whether the new regime will result, for example, in their channels being moved to places that make their content harder to find, leading to fewer eyeballs and less advertising. Those are the kinds of complaints that small companies have every time Google changes its search algorithm. They're also concerned that Google could run overlay ads, insert new ads or replace their advertising entirely – once again, fewer advertising dollars to create content."
In late January, Wheeler proposed a set of new rules to "unlock" the pay-TV set-top leasing business and open it up to third-party suppliers like Google and TiVo.
The proposal is receiving backlash beyond the pay-TV industry. Last week, Sen. Bill Nelseon (D-Fla.), a ranking member of the Senate Commerce Committee, advised Wheeler and the FCC to take a "measured approach" to any notice of proposed rulemaking.
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