Focus on broadband access, not set-top boxes, analyst says

FCC headquarters

“The Internet has eaten the TV,” an analyst for The Diffusion Group pointed out this week in a post arguing that the FCC needs to stop futzing about with set-top box regulation and instead accept that TV’s future lies in apps, not hardware.

With the FCC’s vote on new “unlock the box” set-top rules due Thursday, Sept. 29, TDG analyst Joel Espelien sided squarely with the commission on its “surprisingly radical and surprisingly obvious” new policy recommendation – one that is more in line with the pay-TV industry’s counter-proposal -- that MVPDs provide an app-based alternative to set-tops after a two-year transition period.

That alternative would run on a streaming device like Roku or Google Chromecast and obviate the need to lease a box.

Several major industry players either contributed to or supported the compromise counter-proposal, with Fox and CBS noting in recent ex parte filings that the FCC is considering their approach to apps. “The commission representatives indicated that they were seriously considering a revised approach to this proceeding that would ensure that all of programmers’ valuable content would remain inside of, and under the control of, apps developed exclusively by multichannel video programming distributors (MVPDs) with whom programmers have a direct contractual relationship,” said Fox in its filing earlier this week.

FCC Chairman Tom Wheeler had initially proposed that the pay-TV industry “unlock the box,” and allow third-party devices to enter the industry’s ecosystem. Industry players’ counter-proposal is more of a “ditch the box” strategy, and a way for them to maintain control of the content and UX provided to their subscribers.

Espelien suggested that the industry needs to change its perspective on streaming video and its place in the greater broadband-based internet. Getting access to broadband is far more important than being able to tune into a TV program; that’s why the FCC has encouraged programs that help lower-income Americans get high-speed broadband connections. And that’s why TV has become an “option,” not a necessity, he said.

“Once the issue is framed in this way, the status quo treatment of STBs has already lost. Forcing the user to lease a proprietary hardware device (i.e., a legacy MVPD STB) in order to access a particular content type is anachronistic, if not ludicrous,” Espelien said.

“Bottom line — the original impetus for the FCC’s efforts to ‘open up the box’ was a desire to save people money. It’s perfectly logical, then, that the new proposed regulations embrace streaming TV apps,” he concluded.

For more:
- see the blog post

Related articles:
Fox and CBS ex parte filings hint that the FCC is going to make major compromises to ‘Unlock the Box’
AT&T: CCIA proposal just a ‘thinly veiled repackaging’ of Unlock the Box
FCC's Wheeler may bow to pressure, could change 'Unlock the Box' set-top proposal