Remember how earlier this week the rumor mill had it that the FCC’s long-awaited final set-top box proposal was due out this week? The gossips were right; chairman Tom Wheeler’s office circulated it today.
Wheeler outlined his proposal in an editorial in the LA Times, as well as in a fact sheet. (As is usual, the full detailed text of the proposed rule will not be available to the public until after the Commission votes on it.)
The solution Wheeler proposes is, as the infamous “people with knowledge” had been hinting, app-based. That makes sense, in 2016. But it’s not optional.
The new rules will require pay-TV providers to offer subscribers a free app (so no, they can’t charge you $10 a month for it) that allows you to access all the same programming you already pay for on “a variety of devices,” including tablets, phones, gaming consoles, streaming devices (like a Roku or Apple TV), and smart TVs.
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Because the app will be both mandatory and free, the FCC reasons, consumers will no longer have to pay the monthly rental fees for set-top receivers. Consumers may still choose to pay the monthly fees for convenience, or if they don’t have another device connected to the TVs they want to watch their content on, but those who wish to cut their bill by $10 or $15 a month will be able to.
The app also has to “provide a similar experience” to using the set-top box, FCC officials explained in a call with media—it’s not basically allowed to suck in comparison in order to funnel users back towards a monthly device rental fee. That means that DVR functionality has to come with, too: if the set-top box allows you to pause, rewind, fast-forward, and record programming for later, then the app has to let you do that too.
However, that is a place where the pay-TV companies can still be a little sneaky: if DVR service is a separate $10 fee from receiver service, then they can probably keep charging you that fee to use DVR service on your app, too.
And the FCC is aware that an app you can’t use is no better than no app at all, so pay-TV companies are going to be required to make it widely compatible. The cable and satellite companies “must provide their apps to widely deployed platforms, such as Roku, Apple iOS, Windows and Android,” which is a decent starter list.
In the call, FCC officials clarified that they’re going by operating system to determine “platform”—so, iOS vs. Android vs. Windows, instead of Samsung vs. Amazon. They also specified that the threshold for “widely-deployed” tech will be anything that has had at least 5 million devices shipped inside of the U.S. within the previous year—and that includes future devices that don’t yet exist, when they hit that threshold.
It’s all in the name of competition and choice, as Wheeler explains in his op-ed: “If you want to watch Comcast’s content through your Apple TV or Roku, you can. If you want to watch DirectTV’s offerings through your Xbox, you can. If you want to pipe Verizon’s service directly to your smart TV, you can. And if you want to watch your current pay-TV package on your current set-top box, you can do that, too.”
One interesting feature of the new proposal? Fully integrated search. The proposal states that pay-TV providers must (not may, but must), in whatever app they create, give subscribers the ability to search both the linear (traditional channels / networks) and on-demand content on their service alongside any other video services “accessible through the device.” That means if you’re using a Comcast subscriber using a Roku and you search it for Star Trek, you should be able to get results for what channel(s) reruns are airing on as well as anyone who’s hosting it streaming, all together.
The rules also prohibit discrimination in search—the programmer’s app cannot promote its own resources ahead of other sources for the same programming. In other words, it can’t try to sell you an on-demand rental of a movie for $6.99 ahead of showing you that you can stream it right now on another service you already have.
There’s also a strict privacy requirement built in: the privacy rules that apply to pay-TV operators, not the rules that may or may not apply in the future to your ISP, will apply equally to your app-based viewing. That means limits on using or selling the data about what you watch apply to watching Comcast on your Xbox the same way as they do to watching Comcast on your X1.
There’s one other issue with the TV/internet divide that the proposal doesn’t address: data caps and zero-rating. When your TV streams to you over the internet, that makes it data subject to data caps — until it’s not. Issues with data caps, preferential treatment, and zero-rating don’t fall under the purview of this rule, FCC officials said; if shenanigans show up there, that’s something for the FCC to investigate under the General Conduct section of the Open Internet Rule.
The Commission has also taken into account some of the complaints from industry, particularly around copyright protection and license negotiations. And the Commission has a response to Comcast’s insistence that the rule’s specific technical requirements are physically impossible: it doesn’t have specific technical requirements.
Pay-TV companies can either develop apps in-house, or contract with a third party. They can do whatever kind of software they want, to integrate with their systems, as long as it meets the FCC standards. Any kind of location-based authentication, account verification, copyright protection, technical communications specs—those are up to each pay-TV company to manage for itself.
They also get a generous lead time: two years from the time the rule goes into effect (which, itself, won’t be until well after a vote to approve it) to get their app up and running, for the large providers. Smaller companies get another two years above that, and the smallest ones—with 400,000 or fewer customers—don’t have to comply at all.
“These rules will open the door for innovation,” Wheeler concluded in his op-ed, “spurring new apps and devices, giving consumers even more choice and user control.”
“This is a golden era for watching television and video. By empowering consumers to access their content on their terms, it’s about to get cheaper—and even better.”
The Commission will vote on the proposal in its Sept. 29 open meeting. Given the FCC’s recent history, the meeting is likely to prove contentious… although the measure is also probably likely to pass.
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