U.S. Markets close in 5 hrs 31 mins

FCC tweaks its proposal to free Americans from cable box fees

You may have gotten a little closer to firing your cable box and cutting its $5 to $20 rent out of your monthly budget.

A revised proposal from the Federal Communications Commission would require your cable or satellite television provider to offer apps for most of your gadgets—at no extra charge, with the ability to record video on hardware that can store it.

But this proposal first must overcome determined resistance from companies that have been raking in TV-box fees for decades.

FCC to pay-TV providers: Get appy!

The proposal FCC chair Tom Wheeler introduced in a Los Angeles Times op-ed represents a massive shift. Today, your alternative to paying rent on a box is getting a TiVo or another of a handful of devices that connect to cable (not satellite) via “CableCard” authentication or using apps that often don’t let you watch TV on TV, only on smaller screens.

Instead, Wheeler’s piece explained, “pay-TV providers will be required to provide apps–free of charge–that consumers can download to the device of their choosing to access all the programming and features they already paid for.”

A three-page summary on the FCC’s site clarifies that these apps must be available on “widely deployed platforms, such as Roku, Apple iOS, Windows and Android.”

That means having at least five million devices ship in the US for that operating system in the previous year, a senior FCC official clarified in a conference call Thursday. So Apple’s (AAPL) OS X, Amazon’s (AMZN) Fire TV and Google’s (GOOG) Chromecast should also qualify.

The summary and Wheeler’s op-ed also say you’d be able to look up shows outside the app using your device’s own search function.

The largest TV providers, making up 95% of the market, would have two years to comply. Medium-sized operators would get another two years; firms with under 400,000 subscribers are exempt and can sit the whole thing out.

Neither the op-ed nor the document mentions recording, but in the call and a follow-up e-mail, FCC officials said pay-TV firms would have to offer DVR functions in apps for devices that can store video.

Satellite might be an exception, though. Because the signal from space can’t reach a computer, tablet or media player and satellites don’t deliver sufficient bandwidth for constant streaming video, you might still need one box at home.

The FCC plan, set for a vote by the five commissioners at the end of the month, leaves many details to subscription-TV firms, but it does include oversight of “a standard license governing the process for placing an app on a device or platform.” The commission saw how cable operators slow-walked CableCard with inconvenient and late deployment and doesn’t want a re-run of that.

Pay TV: We’re still not happy

Wheeler’s new deal represents a retreat from an earlier proposal in which pay-TV firms would have to let other companies write compatible apps, subject to their own security requirements.

That “Unlock the Box” plan would have imposed competition in pay-TV interfaces—something we might need, considering that you can’t count on a cable box to show a channel in high definition when you punch in its usual number.

That set off a round of pearl-clutching over the prospect of Google shipping a TV app that would remix the channel lineups of TV operators, then sell ads against people’s viewing habits. Left unsaid: That people probably wouldn’t use such an app unless it beat a TV operator’s own software.

That’s gone now. If a TV service ships a lousy app, nobody else can do a better job. The new FCC proposal also says nothing about the potential for data caps imposed by an Internet provider to make streaming video unattainable.

Big Television still isn’t happy.

The National Cable & Telecommunications Association objected to the FCC’s licensing oversight, saying it would “ignore copyright protections and infringe on consumer privacy.”

AT&T (T) expressed similar worries, saying the FCC should have accepted the cable industry’s “Ditch the Box” pledge to ship viewing (but not recording) apps for major media players.

Charter (CHTR) said “the marketplace is already delivering” apps (although the one from Charter displayed at the cable industry’s May INTX show lacked video-on-demand features) and warned that the FCC would “bog down with regulations and bureaucracy the entire TV app market.”

The Motion Picture Association of America, meanwhile, fretted that the FCC plan would “encroach upon copyright holders’ discretion” in licensing their content and would “jeopardize the security of their content.”

The FCC’s licensing oversight deserves close study, but the security argument is a strawman. If cable companies can’t secure shows and movies in their own apps, why should we have any more confidence in their boxes?

Cable’s trust problem remains

All of cable’s carping may get the FCC to dilute this proposal further, but it won’t do anything about a deeper problem: Many Americans don’t like their cable company and take little pleasure in paying that bill.

And the sight of pay-TV providers battling increasingly modest proposals to give people a choice of viewing hardware—something Congress told the FCC to do in the Telecommunications Act of 1996 and again two years ago—will only widen the trust chasm that exists between viewers and the companies that bring them TV.
Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.