AllVid Not All It’s Cracked Up To Be

By Deborah Collier, Director of Technology and Telecommunications Policy, Citizens Against Government Waste

WasteWatcher, February 2016

After imposing antiquated Title II regulations on the Internet, the Federal Communications Commission (FCC) is trying to take the next step in regulating every aspect of telecommunications. Commission Chairman Tom Wheeler wants to mandate technical standards for set-top boxes that will ultimately hurt consumers by stifling innovation that is already moving towards eliminating the need for these boxes entirely. Just as technology is being developed to send the set-top box the way of the dodo, the chairman and his supporters at the FCC are acting like a bunch of dodos and trying to keep them in homes across the country.

On January 27, 2016, Chairman Wheeler announced his AllVid proposal, which would mandate set-top box standards requiring multichannel video programming distributors (MVPDs), including cable, satellite, and fiber optic, to provide their channel line-ups, data, guides, and programming to third parties interested in building competing set-top boxes. Chairman Wheeler claimed this is to increase competition in the marketplace and reduce costs to consumers, stating that, “The proposal is about one thing: Consumer choice. You should have options that competition provides.” However, the proposal only serves to demonstrate that he is either completely clueless about what the development of new cable apps that work on over-the-top devices, or he is hell-bent on keeping the cable industry in the dark ages.

The chairman’s proposal brings up all sorts of issues, including forcing cable companies to share customer data with third parties who want to develop alternative set-top boxes to sell to consumers. Chairman Wheeler explained that the need for the proposed regulations is to reduce the cost of set-top box rental fees.

The cost to rent a set-top box is between $7-$10 per month, and most subscribers rent at least two. The box includes a card that is programmed to tell the television what can and cannot be viewed based on the customer’s subscription level. Updates to the programming, as well as security updates, are included in the monthly rental fee. If the AllVid proposal is adopted, customers could purchase a device that would be used in place of the set-top box, and under the chairman’s proposal, this device would need to meet specific FCC imposed technical and programming requirements that would allow it to integrate with the cable service from any MVPD.

On the surface, setting standards for set-top boxes may sound like a good idea, and that it could lead to other companies being able to sell devices that would provide the same service as the set-top box. However, service and security updates would be more difficult to provide to the cable customers because the cable provider may not know which device the consumer is using, or whether that device is completely compatible with the cable company’s software, or if it is configured to meet the mandated standards set by the FCC.

More importantly, the marketplace for video content has been rapidly evolving away from the need for these boxes. The video streaming marketplace has become increasingly competitive. Cable companies have been developing apps that consumers can download to their Smartphones, Smart TVs, gaming consoles, or BlueRay devices, and streaming devices like Amazon Fire TV, Apple TV, Google Chromecast, and Roku. These applications have given consumers access to an increasing amount of streaming video content and the ability to watch the shows they want at any time, in any place, on any device they choose.

As additional mobile apps and other innovations are developed to work on various devices and smartTVs, the set-top box could be on the way out just as the FCC is attempting to regulate the device.

And the FCC doesn’t exactly have a great track record when it comes to mandating technology standards. As noted by Seth Cooper of the Free State Foundation, time and again, the FCC has tried to mandate set-top box standards that have increased the cost of these devices to consumers, and served only to make the technology more difficult to maintain. These mandates have included the 1998 integration ban prohibiting cable operations from including content and security in a single device; requiring specific ports for the high definition set top boxes in 2003; and requiring CableCARDs compatibility programming for devices made by different manufacturers. In 2010, the FCC removed its FireWire requirements, and the CableCARD mandates were overturned by the U.S. Court of Appeals for the District of Columbia. Congress repealed the integration ban in the Satellite Television Extension and Localism Act of 2010 Reauthorization Act of 2014 (P.L. 113–200).

The proposed AllVid mandates are another attempt at keeping technology from moving forward and solving a problem that doesn’t exist. Indeed, these regulations, if adopted, may set the nation’s leadership in video innovations on a backward spiral. If the chairman’s proposal is approved, the FCC would end up isolating the U.S. MVPD marketplace from the rest of the world, and make it impossible for consumers to ditch the box entirely. But, perhaps that is the FCC’s ultimate goal: Instead of supporting disruptive technological advances, leave the industry a time warp heading in the wrong direction.

The FCC plans to hold a vote on a notice of proposed rulemaking for the AllVid set-top box mandates on February 18, 2016. Like the Trojan horse standing outside the gates of Troy, consumers should be very wary of a federal agency bearing “gifts.”


Originally published at cagw.org.

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