NCTA's Powell: FCC set-top proposal will take too long to implement, end up costing consumers more

Reading off a litany of grievances and concerns, NCTA President and CEO Michael Powell said the FCC's new proposal to "unlock" the pay-TV set-top leasing business will take as many as seven years to implement and end up costing consumers even more than they're paying now.

Powell was speaking Tuesday at a press conference held by the Future of TV Coalition, an umbrella organization that includes the National Cable Telecommunications Association, and every major pay-TV operator, formed recently with the specific task of opposing FCC Chairman Tom Wheeler's set-top proposal. 

Powell said Wheeler's plan will require major reconfiguration of operator networks, a process he said that could take "four, five, six or even seven years probably to fully implement."

The cost, he said, will be passed on directly to the consumer. As for how much that would be, he noted that a similar FCC mandate meant to enable third-party set-tops to work with cable subscriptions, CableCard, has costs consumers around $1 billion.

In proposing his plan, Wheeler said U.S. consumers are paying, on average, $231 a year to lease set-tops from pay-TV operators. Powell noted that TiVo manufactures and services the only current example of a third-party set-top that works in the pay-TV ecosystem. And the company charges $14.99 a month just for its DVR service. 

"If you add up [all of TiVo's charges], that's not a dramatically reduced cost," Powell said. 

The NCTA chief continued to hammer home the pay-TV industry's position that the proposal disrupts a natural, IP-based migration by operators, who are seeking to replace set-tops with apps. This approach already expands the field of pay-TV devices into a vast plain of mobile and OTT gadgets made by third-party companies. 

"The problem with the FCC chairman's proposal is that it perpetuates cable boxes at the center of the video universe," Powell said. 

Powell sought to frame Google as the leading force behind Wheeler's proposal, labeling the plan "government assistance" to allow the tech giant to exploit pay-TV content without having to go through the time and expense of negotiating its own licensing deals. 

He noted comments made last week by Milo Medin, VP of access services at Google, in which the executive said Google might not even manufacture a set-top that complies with the FCC's new standards and serves the pay-TV industry.

"Google hasn't even decided yet if it will make a meaningful commitment to this, but the effort to make [the proposal] possible could take years," Powell said. 

The FCC has contended that its proposal doesn't employ AllVid, a technology concept loathed by the pay-TV industry. "But the functional nature of what's being proposed is nearly identical to the elements of AllVid," Powell added. 

Finally, the NCTA chief tried to frame the proposal with perspective — all this means, he said, "is that the Commission is going to have a meeting and consider a proposal."

"We reserve the right to redress this in federal court," he added. 

Tuesday's press conference occurred 48 hours before the FCC scheduled a phone gathering of its own to explain and defend its proposal. 

Related articles:
AT&T warns Google, other third-party set-top makers not bound to protect consumer privacy
Pay-TV operators say NAB is on their side in battle against FCC's 'AllVid proposal'
Wheeler: Third-party set-tops will have to protect consumer privacy, too