Programmers, advertisers, Congress back pay-TV operators in battle against FCC set-top proposal

While the FCC received key backing from the White House several weeks ago in its bid to "unlock" choice in the pay-TV set-top leasing business, pay-TV operators opposed to the proposal are receiving a flurry of support of their own.

Amid a flurry of commentary over the last five days regarding the FCC proposal, major programming companies including 21st Century Fox, CBS Corp., Viacom and Walt Disney Company have delivered a petition to the agency providing a surprise backing for operators. 

Specifically, these programmers side with assertions made last week by the National Cable Telecommunications Association (NCTA) and American Cable Association (ACA) — that the FCC proposal reaches way past authority given in Second 629 of the Communications Act.

"Accordingly, the commission must fundamentally rethink its proposed approach to enhancing competition in the set-top box marketplace," the group said.  

Indeed, operators are finding support in a number of key areas, with the Association of National Advertisers telling the FCC that its proposal would allow blocking and alteration of ads.

"Right now we have contracts with cable operators and programmers that determine when an ad is going to run, how it's going to run and spell out the remedies if those agreements are not met. But the new rules would eliminate those protections," said Dan Jaffe, a lobbyist for the ANA, to Ad Age. "It's an enormous problem."

Perhaps most importantly, the pay-TV agenda to take down the FCC proposal is getting backing from third-party device makers themselves.

On Friday, Roku CEO Anthony Wood wrote an op-ed column in the Wall Street Journal, in which he said, "This would allow a company like Google to do to the TV what it did on the Web — build an interface without the 'inconvenience' of licensing content or entering into business agreements with content companies such as ABC, FOX, HBO, or video distributors like pay TV operators. The unintended consequences of circumventing these kinds of arrangements are likely to include increased costs for consumers, reduced choices and less innovation."

Meanwhile, a bi-partisan collection of 23 Congressional lawmakers sent a letter to FCC Chairman Tom Wheeler, echoing a chief concern among pay-TV companies and programmers — that companies including Google will use the law merely to obtain content rights without paying for them.

"In order to keep this ecosystem intact and ensure that creators are able to make a fair living from their trade, we urge you to prevent third-party competitors in the set-top box market from making commercial use of or modifying copyrighted programming without acquiring a direct license from the owner of the content," the letter said.

For more:
- read these FCC comments from major programming companies
- read this AdAge story
- read this Wall Street Journal opinion piece

Related articles:
FTC to FCC: Third-party set-top makers must certify their devices meet privacy guidelines
NCTA and ACA pounce on FCC statement, says its set-top plan exceeds Communications Act authority
Public Knowledge's Kimmelman: 'Data' is FCC set-top proposal's 'dirty little secret'