After Massive Cable Industry Lobbying And Disinformation Effort, The FCC Is Forced To Weaken Its Cable Box Reform Plan

from the disinformation-nation dept

Back in February, the FCC approved a new plan to bring some much-needed competition to the old cable box, resulting in better, cheaper, and more open hardware. But fearing a loss of control (and $21 billion in annual cable box rental fees) the cable industry launched an unprecedented lobbying campaign featuring an endless barrage of editorials attacking the plan for encouraging piracy and even being racist. The cable industry even managed to get the Copyright Office to fight on its behalf, spreading false claims that the plan would "harm copyright" despite having really nothing to do with the subject.

This lobbying and disinformation plan caused several of the Commissioners who voted yes on the plan to unfortunately waffle on the original proposal. As such, FCC boss Tom Wheeler had to return to the drawing board, and is cooking up a heavily modified "compromise" plan that would focus on forcing cable providers to provide their content via an app:

The purpose of the proposal would be to make apps more ubiquitous across streaming devices, and allow subscribers to forgo the cable box altogether. Wheeler has criticized the industry for collecting monthly rental fees for their set-top boxes from consumers, even after the cost of the devices have been recouped.

The proposal would require that cable companies make their apps available to other devices, such as smart TVs and gaming consoles, according to sources familiar with the plan and filings from industry representatives.

Wheeler appears to be cooking up a plan that looks a lot like an underwhelming cable industry counterproposal circulated back in June. But as we noted at the time, providing content via tightly-controlled apps isn't the same thing as open hardware, and isn't all that different from what the cable sector offers today. Such apps usually are just as tightly controlled and restrictive as the cable boxes they're meant to supplement or ultimately replace.

The cable industry has also strongly hinted that if it's forced to offer programming via app, it will just seek its pound of flesh in other ways -- such as charging consumers a new fee if they want to record and store content via cloud DVR. And while the FCC's plan hasn't been released yet, consumer groups and hardware vendor groups like INCOMPAS worry that an "app-based" proposal could simply swap out one ham-fisted attempt at control with another.

Given the cable industry spent millions to successfully manipulate the press, public, politicians and The Copyright Office to protect its anti-competitive cable box fiefdom, you'd think it would be happy about its success in weakening the FCC proposal. But the sector is still complaining, and is worried that the FCC would still be able to dictate terms of their license agreements with streaming box manufacturers like TiVO or Google:

"Cable operators and media companies also are suspicious of a proposed new FCC process for licensing their apps to device makers, viewing it as a chance for the FCC to meddle in their contracts. The FCC’s “updated proposal will unequivocally fail if there is a possibility of governmental or other third-party intervention in the programming rights, obligations and restrictions negotiated by program suppliers, broadcasters and [cable firms],” the National Association of Broadcasters said in written comments to the agency Friday."

Again, if the cable industry is forced to kill the cable box and shift its content to apps, it's going to want to develop all manner of creative new ways to recoup that $21 billion in lost cable box rental fees. Whether that takes the shape of a $20 per month DVR recording fee or a $10 per month "because we said so" fee isn't clear, but it is very clear the cable sector doesn't want the FCC policing how these apps are licensed and presented. It took no time at all for stories to pop up online proclaiming that the FCC was on a power-hungry quest to create a "copyright licensing office within the FCC":

"Instead, FCC Chairman Tom Wheeler is now considering the creation of a copyright licensing office within the FCC, replacing complex separate arrangements with device manufacturers with a single contract overseen and possibly written by the Commission’s staff....It would also unilaterally substitute the FCC for the Copyright Office in establishing and enforcing compulsory licenses for programming, without any indication–let alone legislation–from Congress authorizing such a radical shift.

But like so much said about the FCC's plan over the last seven months, that's simply not true. The FCC would primarily act to ensure the cable industry didn't just supplement one bad idea (the locked down cable box) with another (apps saddled with onerous restrictions and fees), which is a pretty far cry from an entirely new copyright apparatus being forged in the belly of the FCC. And again, contrary to the Copyright Office's claim, this debate has absolutely nothing to do with copyright, and everything to do with control.

If the FCC can't get its own commissioners to support a meaningful cable box reform plan, it may not be worth the fight. A regulator-mandated attempt to replace the cable box with a half-cooked app-based approach may just deliver more of the same shenanigans in a different hat. An easier path may be for the FCC to give up on cable box reform, let the pay TV sector evolve or die organically, and focus its efforts on the biggest problem of the streaming video age: the lack of broadband competition and all of the anti-competitive chicanery (usage caps, net neutrality violations, zero rating) such dysfunction enables.

Filed Under: competition, copyright, copyright office, fcc, set top boxes

Copyright Group, In Arguing Against FCC's Set Top Box Proposal, Appears To Argue That VCRs & DVRs Are Also Illegal

from the that's-not-how-it-works dept

Earlier this month, we wrote about how the Copyright Officer had filed a really bizarre and legally dubious comment with the FCC concerning the FCC's plan to open up competition in TV set top boxes, ending cable company's monopoly on those boxes (for which they bring in $21 billion in revenue per year). The FCC's plan was pretty straightforward -- and the cable companies have attacked it on all sides, with the one argument that seems to be sticking is that this plan is somehow an affront to copyright, and would result in piracy. This is blatantly, factually incorrect. The FCC's plan makes it clear that any system would retain existing technology protection measures against piracy (for better or for worse). If this new system resulted in infringement, it would because there's infringement on the internet already, not because of these new rules.

The Copyright Office's comment was ridiculous on multiple levels, but the worst was the basic argument that private agreements between cable providers and content providers could somehow limit or erase the fair use rights of the public. Yet that's exactly what the Copyright Office argued:

"The Office's principal reservation is that, as currently proposed, the rule could interfere with copyright owners' rights to license their works as provided by copyright law, and restrict their ability to impose reasonable conditions on the use of these works through the private negotiations that are the hallmark of the vibrant and dynamic MPVD marketplace."

This simply incorrect interpretation of the law raised some pretty serious questions, with Public Knowledge going so far as to note a somewhat disturbing pattern of the Copyright Office acting like a lobbying arm for Hollywood, rather than an impartial organization bound by what's in the actual law.

Following up on all of this, one of the many legacy entertainment industry lobbying groups, the Copyright Alliance has released its own letter to the FCC basically repeating what the Copyright Office claimed. It also put out a blog post about the letter... but really the blog post seemed to be an attempt to attack Public Knowledge for its comments about the Copyright Office.

The Copyright Alliance's letter is basically exactly what you'd expect, rehashing the already debunked claims about how the FCC's plans will cause copyright problems, but the Copyright Alliance seems to take it one step further, arguing, ridiculously, that anything that copyright holders don't like is obviously against the law. Read the following quite carefully:

As noted by the Copyright Office, copyright law is predicated on the theory that creators are incentivized to create new works by the prospect of reaping the economic fruits of their creative labor, which in turn benefits the public by increasing the number of creative works available for their enjoyment. This economic rationale behind copyright protection has been repeatedly confirmed by the Supreme Court. The Copyright Act creates these incentives by granting copyright owners a bundle of exclusive rights in their works, which they can assign and/or license to third parties in their discretion. The detailed contractual arrangements governing the release of copyrighted works into the commercial marketplace are what enable copyright owners to realize the full value of their works. The FCC’s Proposal undermines this licensing structure by forcing MVPDs to deliver copyrighted content—including all content the MVPDs license from programmers and other content creators—to unlicensed third parties, without the authorization of those copyright holders, while offering no mechanism to ensure that the detailed license arrangements between MVPDs and programmers/copyright owners are respected. Therefore, the Register is correct in her observation that the Proposal threatens to harm copyright owners by encroaching on their exclusive prerogatives to both exercise and license their rights to reproduce, distribute, display, and perform their creative works, as well as by undermining their ability to earn a return on their investment in those works.

Except, if what I've bolded above is actually copyright law, then the VCR, the DVR, the MP3 player, photocopiers and much of the very internet itself are inherently against copyright law. But that's not what courts have found. If you look at the classic Betamax lawsuit, it made it abundantly clear that even when there were license agreements between content providers and TV stations that end users could absolutely record and watch content via an "unlicensed" device, known as the VCR. This just takes the Copyright Office's ridiculous assertion that copyright holders and ISPs can somehow write fair use out of their agreements for end users, and takes it even further to effectively write the Betamax ruling out of existence and set up a framework that says there can be no fair use in new consumer electronics.

That's both wrong and crazy. And, yes, I know that the former Copyright Office boss Ralph Oman has argued that all technology should be considered infringing until Congress says it's okay, but that's not the actual law, and it's incredibly dishonest to suggest it's the case.

Here's the important thing that the Copyright Office and the Copyright Alliance don't seem to understand (or are willfully ignoring). This content is already licensed. The only people who will get access to it are those who have a legitimate right to access the content from their cable providers. In other words, everything is licensed. There is no "harm" at all. The only issue is that the content can be accessed (by the paying subscribers!) via alternative hardware (which might add some more features, but which will still have the same copy protection). But nothing in this creates any problems for the content creators, because the overall setup is the same. They have licensed the work. The hardware alternatives that may arise may include some additional features, such as recording and such, but that's well within their legal rights under fair use. The complaint here seems to just be that the Copyright Alliance and the Copyright Office don't like fair use and don't want the Betamax standard to exist any more.

The Copyright Alliance and its funders in the entertainment industry may wish that the VCR were never made legal (even though it was a device that basically saved Hollywood by bringing in massive new markets and revenue streams), but they don't get to rewrite history and pretend it doesn't exist.

It's this kind of crap that is so annoying about these groups like the Copyright Alliance. They are flat out misrepresenting reality.

Filed Under: copyright, copyright office, fair use, set top boxes, vcrs
Companies: copyright alliance

Why Is The Copyright Office Lying To Protect The Cable Industry's Monopoly Stranglehold Over The Cable Box?

from the defenders-of-the-status-quo dept

The FCC's attempt to bring some much needed competition to the cable box has birthed an absolute torrent of lobbying shenanigans by the cable and entertainment industries. They've pushed a flood of misleading editorials in major papers and websites claiming the plan is somehow racist and will unveil a piracy apocalypse. They've nudged Congressional campaign contribution recipients to bash the plan as an extreme case of government over-reach. They've also managed to convince the press and some FCC staffers the idea is an attack on copyright, when copyright has absolutely nothing to do with it.

Quick background: under the FCC's original proposal (pdf), the FCC wants cable companies to provide programming access to third-party hardware vendors without the need for a CableCARD, the goal being to generate competition in the space resulting in better, cheaper and more open cable boxes. Under the proposal cable operators would be able to use any copyright protection or DRM standard they choose to deliver this content to companies like Google, Amazon or TiVO -- and the FCC has repeatedly stated any final rules would respect existing copyright and financial arrangements between cable and the customer.

But because the plan would cost cable providers $21 billion annually in rental fee revenue and result in more open cable boxes (more likely to direct viewers to third party streaming competitors), they've been trying to use a false definition of "copyright" to protect its monopoly stranglehold over cable hardware. And now, the cable industry has another ally in their attempt to mislead the press and public on this subject: The United States Copyright Office.

For months the Copyright Office has been quietly going around "educating" DC regulators and politicians on the FCC's cable box reform plan, falsely claiming that the plan is an attack on copyright. These efforts have been effective in getting some of the FCC Commissioners that originally voted to approve the plan to waffle on their decision. The behavior resulted in a number IP lawyers (including Annmarie Bridy) recently warning the Office that it's giving horrible advice and ignoring legal precedent as to the scope of copyright.

Undaunted, the Copyright Office this week doubled down on its misleading arguments, sending a letter to Congress (pdf) that's absolutely jam-packed with claims ranging from the incredibly misleading to downright bullshit. At its core, the Office's letter continues to pretend that the FCC’s NPRM would require copyright owners to give their content away for free exploitation by third party devices. That the FCC's plan lets "big tech" hijack cable's innovation and re-purpose it for all manner of nefarious use has been a cable lobbyist argument for the last year, and it pops up repeatedly in the structural underpinnings of the Office's own argument:

"The Office's principal reservation is that, as currently proposed, the rule could interfere with copyright owners' rights to license their works as provided by copyright law, and restrict their ability to impose reasonable conditions on the use of these works through the private negotiations that are the hallmark of the vibrant and dynamic MPVD marketplace."

Use of phrasing like "vibrant and dynamic" to describe the most-hated industry in the United States gives you a pretty solid sense of the objectivity of the Office's argument. But again, this idea that third parties can simply take cable company programming, throw their own ads on it, and present it as their own isn't what the FCC's proposing. At all. All the same licensing arrangements, consumer cable pricing, advertising, and DRM will remain intact (for better or worse).

Throughout the letter, the Copyright Office repeatedly claims that copyright gives cable companies more control than they actually have. While copyright obviously gives an author some control over the copying and redistribution of their works, these rights can't magically be extended wherever and whenever one chooses, especially, as the EFF this week argued in a great reply to the letter, when it conflicts with the rights of the end user:

"Once a copyright holder has released their work to paying customers, like cable subscribers, those customers have their own set of rights: to view TV programs at home or on the go, to skip around within the programs as they wish, to search for and organize the programs and other content they’re entitled to see, and to choose tools that enable them to do these things.

The Copyright Office’s letter implies that cable and content companies could create new rights for themselves just by writing them into private contracts between each other: the right to control which “platforms and devices” customers can use, the right to limit time-shifting and other fair uses, and the right to “exclude” other software from a customer’s device. While private companies are free to negotiate conditions like these between each other, nothing in the law gives copyright holders the power to impose those conditions on the whole world, snuffing out the rights of users.

Of course that's precisely what the cable industry wants to do. For decades the cable industry has enjoyed a captive monopoly over cable hardware, resulting in expensive household rental fees and an erosion in consumer viewing rights. As the more open PC era arrived and challenged the inflexible mantra of traditional cable, the cable industry has worked harder on protecting this model than it has on evolving. Finally faced with a viable threat to monopoly hardware control, cable is falsely claiming that copyright gives it the right to continue imprisoning customers in an antiquated walled garden smelling faintly of old people and mothballs.

But here's the important part: copyright law cannot be used for this purpose -- and you'd think the Copyright Office would know that. The Copyright Office is twisting the fact that two private parties can negotiate away fair use and other rights for themselves, but the absolutely cannot negotiate away those rights for the public. Yet that's exactly what the Copyright Office is claiming.

In short this isn't a debate about copyright, it's a debate about control. The idea that these new cable boxes and associated services might interfere with contractual agreements around windowing and tiering is simply not a copyright concern and yet here is the Copyright Office incorrectly claiming that it is. The Copyright Office also ignores that these changes don't eliminate or weaken DRM, and that customers using these new, more open cable boxes would still be cable customers, paying the same high prices they always have. Also ignored by the Copyright Office is the fact that these changes would be a net benefit to consumers and countless companies alike.

Needless to say, consumer advocacy groups like Public Knowledge were equally unimpressed with the Copyright Office's selective reasoning:

"Under the Copyright Office's analysis, the interests of consumers are irrelevant, and fair use is an obstacle to be overcome. This letter is another example of how the Copyright Office has become dedicated to the interests of some copyright holders -- as opposed to providing an accurate interpretation of copyright law."

In short, the Copyright Office is being used as a puppet to defend one of the least liked industries in America, distorting the very definition of copyright to help protect said industry's monopoly control over the cable box.

Filed Under: competition, copyright, copyright office, fair use, public rights, restrictions, set top boxes, video

IP Lawyers Tell Copyright Office To Stop Screwing The Public By Opposing Cable Box Reform

from the get-the-hell-out-of-the-way dept

Last week we noted how the cable industry was distorting the definition of copyright to try and fend off the FCC's attempt to bring competition to the cable box market. Through misleading editorials and leveraged relationships with beholden lawmakers, the cable industry has been successfully convincing some regulators that we can't bring competition to the cable box or we'll face a piracy and copyright apocalypse.

Dig deeper and you'll find that copyright has nothing to do with the proposed changes being tabled. The FCC's proposal simply requires (pdf) that cable providers deliver their existing programming, sans CableCARD, to third party set tops with an eye toward boosting competition. The FCC has stated repeatedly that under their plan, cable providers can utilize the standards and copyright protection of their choice to make this happen, keeping existing DRM in place (for better or worse). Again, it's important to understand that for cable providers this fight is about control and $21 billion in annual rental fees.

Annoyingly it's not just clueless politicians, cable lobbyists and entertainment industry editorials pushing the narrative that the cable box fight is about copyright. The Copyright Office has joined the cable and entertainment industry in opposing the FCC's plan because... copyright. This support has had a major impact on the FCC's efforts, with some of the commissioners that originally voted yes on the proposal (Mignon Clyburn, Jessica Rosenworcel) now starting to waffle in large part thanks to Copyright Office warnings.

Not too surprisingly, the Copyright Office's opposition to a major consumer-friendly policy has raised eyebrows among numerous IP Lawyers, who fired off a letter to Acting Librarian of Congress David Mao this week warning the Office that it's wandering too far afield:

"We understand that the Copyright Office has expressed concern that the FCC’s proposal, if implemented, would lead to the infringement of copyright. We do not share that concern, particularly in light of the legal and technical measures contemplated in the NPRM for protecting copyrighted content from illegal copying."

The letter is quick to argue that the Office's attempt to massively extend copyright to protect cable control over every aspect of the cable box runs in stark contrast to the limitations set forth in the Supreme Court's Sony v. Universal decision. As such, the letter politely suggests it might be nice if the Office adhered to the law and stopped giving regulators and politicians bad advice on this subject:

We urge you to oversee the Copyright Office pursuant to Section 701(a) of the Copyright Act to ensure that the Office dispenses advice to policy makers that is reasonably consistent with settled principles of copyright law. When the Office acts to advise Congress on matters within its purview, it must do so in a way that seeks to further the Copyright Act’s primary goal of rewarding creators for the public’s ultimate benefit. Interpretations of copyright law that operate to expand copyright entitlements into copyright-adjacent fields of commerce run counter to Supreme Court precedent and the copyright system’s goal of increasing public access to knowledge and information.

Among the letter's five signatories is Annmarie Bridy, who, in a statement of her own, again makes it clear that bringing competition to the cable box is not going to usher forth the piracy and copyright apocalypse:

"We pointed out in our comments that the FCC’s proposal is fully attentive to the content protection issues that could arise from opening up cable programming streams to non-cable equipment manufacturers. The cable box, in other words, is not a copyright Pandora’s box; it can be opened carefully, in a way that both protects copyright holders and enables overdue innovation in the way that cable subscribers access content for which they’ve paid."

While it's helpful for experts to warn the Copyright Office it's actively harming the public interest here, the damage may have already been done. The FCC, already under fire for net neutrality rules and new broadband privacy protections, has descended into internal bickering over whether cable box competition will harm copyright, consumer privacy, puppies, and a wide variety of other vibrant red herrings put forth by cable lobbyists, entertainment industry allies, and the Copyright Office. Unless something changes in the next few months, it seems entirely likely that the FCC's plan will, quite intentionally, get buried in committee.

Again that may not be the end of the world. With the streaming market evolving the cable box is a doomed relic anyway; the FCC's plan would simply have accelerated its demise by five years or more. Losing this fight may also give the FCC more time to focus on more important issues for the health and future of the video marketplace, like broadband competition and the use of zero rating and usage caps to thwart alternative streaming providers. Still, the FCC's plan would have not only saved consumers millions, it would have given consumers access to better, cheaper, more open and innovative hardware than ever before.

Shame then that the Copyright Office couldn't be bothered to give politicians and regulators some real device on this subject: namely that the cable industry's opposition to cable box competition is little more than a sound wall of disinformation, delivered by an an army of for-hire sycophants, fueled entirely by the ham-fisted desire to retain monopoly control in the face of inevitable evolution.

Filed Under: competition, copyright, copyright office, fcc, set top boxes

Amazon, Cable Industry Molest The Definition Of Copyright In Ongoing Scuff Up Over Cable Box Reform

from the copyright-is-whatever-I-say-it-is dept

Last week we noted how copyright has once again become a straw man, this time as part of an attempt to kill the FCC's plan to bring competition to the cable box. Under the FCC's plan, cable providers would have to provide their programming to third-party hardware vendors -- using any copy protection of their choice -- without forcing consumers to pay for a CableCARD. The plan has little to actually do with copyright, but cable providers have tried to scuttle the effort by trying to claim more cable box competition will magically result in a piracy apocalypse (stop me if you've heard this sort of thing before somewhere).

The cable industry's attack on the FCC's plan has been threefold: hire sock puppets to make violently misleading claims in newspapers and websites nationwide; push industry-loyal politicians (who have no real clue what the plan does) to derail the plan publicly as the worst sort of villainy, and present a counter proposal packed with caveats that makes it all but useless. This counter proposal involves the cable industry delivering its programming via apps (much like it already does), but forces consumers to continue renting a cable box if they want to record programs via DVR.

Given the cable industry's plan is little more than a press release, that's only the caveat we know of. But anybody thinking the cable industry's going to just give up $21 billion in set top rental fees and their walled garden control over the user experience is utterly adorable.

Numerous companies with feet in both streaming hardware and TV (Google, Amazon, TiVO) obviously support the FCC's original proposal. A regulatory filing from Amazon back in April (pdf) applauded the FCC's plan, and while it raised some questions about copyright and copy protection, it also argued that most of the modern protection systems already at play on streaming hardware should be more than effective at protecting programming:

"Amazon Fire TV 4K, nVidia Shield TV, Roku4, and numerous televisions from Sony, Vizio, and other manufacturers are already trusted by movie studios to deliver high-quality ultra HD movies with theater quality sound. These devices use hardware protections that assure that content delivered to these devices can only be decrypted and played back by devices authorized to play back that content. Furthermore, the technological solutions that exist today are much more advanced and robust than they were even when CableCARD was created. As the proliferation and success of OTT services (including those offered by Amazon) demonstrate, modern content protection technologies are both in use today and highly effective."

Given the fact that most DRM is almost always bypassed and generally only succeeds at making the end-user experience difficult and annoying, that's debatable. Still, it should again be noted that copyright itself isn't really the issue here. As the EFF rather eloquently noted back in April, this fight is about control of the end-user experience and, for cable, protecting cable box rental revenue and keeping its customers firmly ensconced within the traditional cable walled garden.

That said, it's interesting to watch how the nebulous term "copyright" morphs and shifts meaning as both sides try to use the concept as a malleable weapon. For example the Washington Post this week pointed to a another Amazon filing with the FCC (pdf) in which Amazon complains that it's the cable industry's app-based "compromise" solution that violates copyright and would be a piracy nightmare (despite cable delivering current content via apps with no problem):

"The parties also discussed the recent submission from NCTA of an alternative method using an app-based approach. The Amazon representatives said that it was hard to comment specifically on the short submission since it lacked important details. However, some aspects of it warrant attention. The Amazon representatives stressed that hardware-based digital rights management (“DRM”) is the gold standard for content protection. A native application has no impact on the robustness of properly implemented hardware-based DRM with regards to content security. Thus, the NCTA submission does not in fact address the security concerns MVPDs have identified as one of the central reasons to oppose the proposals set forth in the NPRM.

In short, the cable industry says it can't possibly support real cable box competition because... copyright! Amazon argues this is nonsense, but in its own way is perpetuating the straw man by claiming that only a hardware-based solution will work because... copyright! As we noted last week the very definition of copyright is being molested for argument's sake; a giant ugly red herring distracting observers from the fact that this is about control, not copyright. And obviously if you've used Amazon's own locked down, walled-garden products, the negative impact of DRM is very often a distant afterthought -- not entirely unlike traditional cable.

It should be noted that the Amazon-owned Washington Post first gives way too much credence to these copyright claims, then mistakenly tells readers that the FCC's proposal and the cable industry's proposal are effectively the same thing, both efforts ultimately saving consumers money:

"Critics say requiring companies such as Comcast to make their TV content freely available to any other box maker poses copyright risks, raising the possibility of theft by content pirates. Both the FCC approach and the cable industry proposal could reduce the cost of renting set-top boxes — in some cases, by potentially eliminating the need for them altogether.

Well, no. The FCC's effort is a well-intentioned (though possibly doomed) attempt to bring real competition to the cable box, driving down costs for consumers. The cable industry's counter-proposal is a page of ambiguous promises with the clear intent of delivering programming via app, but forcing users to either still rent a cable box -- or pay their cable provider a premium if they want to record and store content (either on physical DVR or cloud-based DVR system). One effort is trying desperately to make the cable box more open and PC like, the other is a show pony designed to retain control in the face of evolution.

Filed Under: apps, competition, copyright, fcc, set top boxes
Companies: amazon, comcast

Cable Industry's False Copyright Claims Are Killing Cable Box Reform Efforts

from the disinformation-nation dept

In the quest to stop the FCC from bringing competition to the set top box, the cable industry has trotted out all manner of misleading arguments, most of which have been pushed in editorials in newspapers nationwide without highlighting author ties to the sector. Some of them have tried to pretend that cable box competition will create a piracy apocalypse. Others have tried to somehow argue that better, cheaper hardware and choices will somehow harm minority communities. Most of those are just flimsy attempts to try and keep the FCC from cracking open a $21 billion monopoly on cable box rental fees.

Fearing their own loss of control, the entertainment industry has joined the cable sector in also claiming new cable box rules will somehow violate copyright law. Under the FCC's original proposal (pdf), the agency simply states that existing cable content must be delivered to third-party hardware using the copy protection of the industry's choice. Nothing in the rules will change that, or magically give third-party vendors the right to violate copyright. Still, opponents of the rules have consistently tried to claim the rules are some kind of cabal by Google to freeload off of and repackage "their innovation."

A recent filing by the cable industry's biggest lobbying organization (pdf), the NCTA, put it this way:

"The proposed approach would circumvent the MVPD’s (read: cable company's) technological protection measures and license restrictions, with no enforceable means to prevent streaming that movie outside the home, in clear violation of the license to the MVPD, and the content owner’s copyright."

Except if you actually read the proposal (which hasn't even been fully cooked yet), it does nothing of the sort, and the FCC time and time and time again has stated whatever rules are passed will adhere to existing copyright (probably to a fault, if history's any indication). As the EFF noted a few months ago, claims that set top box competition will violate copyright is simply a head fake -- where the very definition of copyright has been mangled and distorted to fight off efforts to open technology up for user benefit. Put simply, copyright doesn't really apply to the improvements the FCC wants to make to your cable TV viewing experience:

"Copyright is only an exclusive right to copy creative work (and to distribute, publicly perform, and adapt it). Copyright has important limitations, including fair use. Copyright doesn’t give rightsholders the ability to stop others from “monetizing” (double ugh) or even “exploiting” creative work unless one of the specific rights laid out in the law is violated. TV and home stereo manufacturers, used DVD sellers, and popcorn growers all “monetize” and profit from the creative works of others without asking permission or paying royalties. Last year, a federal court ruled that copyright doesn’t stop Dish Networks from offering a DVR that can skip commercials automatically. And no one has to pay extra for a mute button that works during commercial breaks (yet).

Real set top box competition would not only demolish $21 billion in captive revenues, it would dismantle a walled garden under construction for a generation. Set top box competition would result in more open boxes more inclined to show users alternative, niche options outside of the traditional cable and broadcast wheelhouse. Worse, it would give the consumer more control than ever before in terms of how content and media is consumed, bringing the cable box more in line with open platforms like the PC. How terrifying. The EFF continues:

"...Since competition would mean lower prices and more choice for customers, and less control and profits for the monopolists, they would rather keep the conversation on their made-up version of copyright law. Consumers are not fooled. Consumers recognize that the cable set-top box market has been a long, frustrating experience where they have little choice and have witnessed even less innovation. Consumers know they are being ripped off by the current marketplace ($230 per consumer totaling $20 billion in rental fees each year) because they don't have an easy way to just own their box like they do with computers, cable modems, smart phones, tablets, and other electronic devices."

Understanding that copyright is a straw man in this conversation about monopoly hardware control makes some of the waffling we've been seeing at the FCC on the proposal all the more frustrating. It's waffling only made possible by the literal army of broadcast, cable and entertainment industry lobbyists busy "educating" politicians on their mangled definition of copyright, and how these systems actually work. And as a Washington Post article detailed last week, this lobbying campaign appears to be working:

"My office has met with the Copyright Office, and I know that the Copyright Office has expressed concern about just what you described," Democratic FCC Commissioner Jessica Rosenworcel told House lawmakers Tuesday. "So I think more work is necessary on our part." Rep. Marsha Blackburn (R-Tenn.) said Tuesday that she's heard from the Copyright Office, too, on the same issue. Another Democrat on the commission, Mignon Clyburn, said copyright protections "must be in place" in any final rule, but stopped short of saying the FCC's initial plan had problems."

The furrowed brows of worry over entirely artificial copyright concerns don't bode well for the FCC's proposal. In the post truth era, repetition (not truth) dictates reality, and it's becoming abundantly clear that the cable and entertainment sector's misinformation efforts are paying dividends and stalling the effort. Again, that's not the end of the world as the FCC may find it more effective to focus on the biggest problem in the streaming age (the lack of broadband competition and usage caps), but it's still frustrating to see how effective these kinds of coordinated campaigns continue to be in the campaign-contribution-soaked nation's capital.

Filed Under: competition, copyright, fcc, innovation, set top boxes

Comcast Continues To Claim It's 'Not Feasible' To Offer Its Programming To Third-Party Cable Boxes

from the real-competition-is-impossible,-sorry dept

We've been talking a lot about how the FCC is pushing a new plan that would force cable providers to provide their programming to third-party hardware vendors. The idea is to put an end to the $21 billion in annual rental fees consumers have to pay for often outdated cable boxes and create some competition in the cable box space, resulting in better, cheaper hardware for everyone. Given it's a hugely profitable monopoly and third-party boxes would be more likely to direct users to competing services, the cable industry has shelled out big bucks for misleading editorials and high test Congressional whining.

Comcast's other, ingenious solution to the FCC's plan? Try and claim that it's not technically possible for Comcast to offer its programming to third-party cable box makers without including all of Comcast's code (and advertising tracking software):

"Comcast says it told the FCC its Xfinity apps "include software code that manages requests for programming and communications between the box/app and where the programming is cached on the network to ensure the programming is delivered, and done so efficiently." Comcast added that "this network code minimizes the risks of degradation to the service due to bandwidth shortages and congestion, and also enables Comcast to support rapidly evolving entertainment technologies, such as accessibility features and advanced video technologies."

The problem? The FCC says that this is total bullshit, and we're really just talking about providing a few simple APIs:

"A senior FCC official who also spoke to Ars on background disputed Comcast's arguments.

The FCC is aware that TV systems can be either one-way or two-way and that modern systems use IP technology, the official said. TV providers with IP-based systems can comply with the proposed rules by providing an API that allows third parties to request and receive video and related information according to the FCC. The API doesn't need access to every feature in Comcast's cable system—it just needs to know what a customer subscribes to and the other information required by the FCC's proposed rules.

In short, Comcast wants to retain control over viewer metrics and advertising, so it's pretending it's technically impossible to simply provide the content and a basic schedule of broadcasts ("Sorry! we tried to compete, didn't work out!"). That's why Comcast, alongside with other cable providers, has been pushing an "app-based compromise" to the FCC's plan. But as we recently noted, that plan comes with a few huge caveats -- namely that you'd still have to pay your cable provider for a cable box if you want to do fundamental things like record a program via DVR.

Unfortunately, the cable industry's lobbying efforts appear to be working, resulting in some of the Commissioners that voted yes on the plan (Jessica Rosenworcel, Mignon Clyburn) suddenly waffling on the idea. It's certainly not the end of the world if the FCC's plan fails, given the cable box is likely doomed anyway and the FCC could spend these calories focusing on the real lynch pin in the streaming video future: broadband competition. Still, it was nice to dream briefly of a world in which consumers didn't have to pay $231 more every year (on average) just to suffer at the hands of clunky, poorly-designed, locked down cable hardware.

Filed Under: competition, fcc, set top boxes
Companies: comcast

FCC Pressure Helps Bring Netflix To Comcast Cable Boxes

from the pretending-to-be-open dept

We've long noted how Comcast is a bit of an anti-competitive jackass on both the TV and broadband fronts. When the nation's biggest cable provider isn't using usage caps to hinder streaming video competitors, it's busy finding new and creative ways to prevent paying customers from wandering too far outside of Comcast's well-cultivated walled garden. And while many global cable companies have joined the year 2016 by integrating Netflix functionality into their cable boxes for consumer benefit, Comcast has historically fought such a move, instead trying to drive consumers to its own Netflix knockoff.

But with the FCC considering new rules that would open up ye olde cable box to competition, Comcast is busy trying to portray itself as open to the changing competitive tides in the hopes of pre-empting new FCC regulations. The company this week is getting oodles of sudden praise for informing Recode that it will "allow" Netflix on to its X1 cable box:

"Said the pair in a statement: “Comcast and Netflix have reached an agreement to incorporate Netflix into X1, providing seamless access to the great content offered by both companies. We have much work to do before the service will be available to consumers later this year. We'll provide more details at that time." Sources said the deal to be on the cable giant’s set-top box would be akin to the arrangement that Netflix has cut with smaller cable operators in the United States and bigger ones across the globe.

It's kind of amazing what the faintest threat of a regulator actually doing its job can do. And while that's great that Comcast is joining the modern era by making its cable boxes actually useful, it's still a problem that Comcast can determine what consumers can and can't access via cable boxes they own and rent, which are looking more and more antiquated in the Roku and smart phone era. That's why the FCC is proposing rules that would require cable providers to simply provide existing programming to third party hardware vendors, in the hopes of creating better, cheaper set top boxes free of traditional walled gardens.

Comcast's sudden about face comes hand-in-hand with the cable industry's attempt to pre-empt FCC regulation on this front with an "app-based" plan of its own. Under the cable industry's "counter proposal" to cable box competition, cable providers would instead be able to keep the traditional cable box and walled gardens intact, provided that it offered its own cable TV lineup via an "app" for third party streaming devices. And while that sounds great on its face, this being the cable industry the plan has a number of ingrained caveats, such as the fact to use DVR recording you'd still need to rent a cable box. This is not a $21 billion annual monopoly the cable sector will give up easily.

So while it's all well and good that Comcast is being slowly forced to join the modern era, it should be clear that this is Comcast trying to forestall real, open cable platforms, not embrace them. The fact that Comcast still needs to "allow" its customers access to the most popular online service potentially ever conceived remains the real problem.

Filed Under: cable, fcc, set top boxes, television
Companies: comcast, netflix

Consumer Groups Say AT&T, Comcast Violate Privacy Law By Hoovering Up Cable Box Data Without Full User Consent

from the informed,-empowered-consumers-cost-us-revenue dept

In addition to the $21 billion made annually by cable set top box rental fees, cable companies make untold billions from monetizing the user viewing data these boxes help collect. That captive revenue alone is the driving force behind the pay TV sectors histrionic opposition to the FCC's plan to open the sector up to third-party hardware competition. Consumer viewing and behavioral data is an immense cash cow, one the cable industry has occasionally threatened to take even further -- with patents on tech that lets the cable box literally watch or listen in on American living rooms.

While things haven't quite reached that level of total information awareness yet, consumer groups this week filed a formal complaint with both the FTC and FCC arguing that things have gone far enough. Public Knowledge, the Center for Digital Democracy and Consumer Watchdog have filed formal privacy complaints with both the FCC and FTC saying that major cable companies routinely fail to inform consumers about the degree in which their viewing data is collected, stored and monetized via ye olde cable box.

The complaints note that while most cable company privacy policies do alert consumers that they use personally identifiable information and third-party data for ads, these warnings don't go far enough to formally adhere to cable privacy rules on set-top box information:

"Federal law requires cable and satellite providers to obtain permission from subscribers prior to collecting and using their information for advertising purposes. Cable operators are also required to provide subscribers with a written statement that clearly describes the nature of the use of their personally identifiable information. Currently, cable operators obtain opt-out consent from consumers to use their information, which is insufficient to constitute prior consent under the law. And their privacy policies often fail to adequately disclose the extent to which they are sharing and combining customer data with third parties."

The complaints specifically single out Comcast, AT&T and Cablevision as "among the most egregious" when it comes to using consumer data without adequate consent. The complaint filed with the FCC (pdf) for example, notes that companies like AT&T often pull data from both the wireless and wireline empires to create mammoth databases of user behavior and personal information for targeted ads, without making the scope of this collection and usage clear to consumers or obtaining full, legal consent:

"AT&T’s TV Blueprint, for example, “gives advertisers working with AT&T the ability to reach people based on factors like device, operating system, whether or not they’re heavy data users or the status of their carrier contract,” using “sophisticated second-by-second set- top box data” and other information. AT&T pulls data “from millions of set-top boxes” and analyzes consumer viewing history and uses these data to target consumers based on their viewing profile. Companies like Cablevision leverage granular data and precise details of household viewing behavior, and combine it with third-party data covering other intimate details of consumers’ lives to analyze and target specific individuals with video advertising across a range of screens. In their own words, “this set-top box level targeting lets marketers target customers that fit particular trends, profiles, demographics and attributes, and they can also pair the Cablevision data with their own or third-party data."

With the FCC eyeing both set top box reform and new privacy rules for broadband providers, Public Knowledge is providing the commission with a little ammunition and fuel for thought on both fronts. Historically, consumer privacy in telecom and television has been feebly protected at best, and companies like AT&T have consistently pushed the barriers in their ever-expanding quest for more marketing data, whether that's the use of modified wireless packets to track users around the Internet, or charging a steep premium to opt out of deep packet inspection and data collection.

In the not-so-competitive realm of telecom, this is about as close to "innovation" as many sector companies get.

Specifically, Public Knowledge makes it clear they'd like to see such collection be made opt in instead of opt out, and argues that opting out doesn't go far enough to count as "consent" under existing privacy law:

"...The Commission should take the affirmative step of declaring that the use of customer information requires opt-in consent and that absent such consent, cable providers violate privacy rules by collecting customer information and using it to deliver marketing tailored to those customers."

As we've seen with the do not track debate, opting in is the bane of any data hoovering operation, given an informed and empowered consumer protected by a still-clawed regulator results in an obvious dent in the profit party. As such, telecom regulators have never been keen on supporting opt in, and it doesn't seem likely they'll start doing so anytime soon, despite the groups' request.

Meanwhile, AT&T was quick to unsurprisingly pooh pooh the groups' complaint as "bogus," while somehow arguing the attempt to protect consumer privacy would violate consumer privacy:

"AT&T’s use of anonymous and aggregate set-top box information is entirely consistent with the statute. Our disclosures tell our customers exactly how we use that data and provide tools for customers to opt out. Frankly, this complaint is bogus, and seems mainly designed to distract the public from the overwhelming bipartisan opposition to the FCC’s controversial set-top box plan.

That plan itself will erode existing consumer privacy protections, not to mention its many other harms. Because the plan’s few remaining supporters have no answer to that charge, they’ve decided to invent a false privacy claim. This smacks of desperation, and it also carries the whiff of hypocrisy. It’s further proof, if any is needed, that the plan’s supporters have lost the public policy debate on this issue."

AT&T somehow forgets to mention that most of the opposition to the FCC's set top box competition plan is entirely artificial -- generated in large part by AT&T and Comcast lobbying departments -- who've been busy filling editorial pages nationwide with absurd and misleading arguments.

The genuine reason for AT&T's opposition isn't surprising or complicated: ill-informed customers in un-competitive markets trapped in walled gardens are hugely profitable. Any deviation from this standard is treated as an egregious affront. But cable ops can't just come out and admit this is simply about protecting set top box monopoly money; that's why they've created groups like the "Future of TV Coalition" to try and complain -- like AT&T briefly does above -- that actually protecting cable customer privacy -- will somehow be a privacy violation in and of itself:

"But the new AllVid-style TV regulations being proposed by the FCC this week are an assault on consumer privacy. They will strip viewers of vital safeguards for their viewing choices and add “what we watch” to the mountains of data being mined and exploited by privacy scofflaws like Google, alongside their existing files of what we search for on the Internet; what we say in our gmail at home, work, and school; what happens in our “Nest”-connected homes; and where we go using Waze and Google Maps."

Cable companies could embrace opt in as a new standard and creatively offer small discounts to users who participate, but it's much easier to whine nebulously about Google. Companies like AT&T and Comcast desperately want to be regulated exactly like "edge providers" such as Google when it comes to privacy, ignoring the fact that their stranglehold over the broadband last mile -- and the cable box -- create a scenario whereby if regulators don't make at least a token effort to protect consumer privacy, the sky will be the limit in terms of abusing these captive markets and consumer walled gardens.

Filed Under: data, fcc, ftc, privacy, set top boxes
Companies: at&t, comcast, public knowledge

Jesse Jackson Likens FCC Cable Box Reform Plan To 'Snarling Dogs, Water Hoses And Church Bombings'

from the sock-puppetry dept

Back in February the FCC voted to open up the captive cable set top box market to competition, potentially opening the door to better, cheaper hardware, but also putting an end to the $21 billion the cable industry makes annually in set top box rental fees. Shortly thereafter the cable industry responded by pushing an absolute torrent of misleading editorials in newspapers and in websites nationwide. Some of these editorials claim set top box competition will result in privacy, security, or piracy Armageddon. Most try to claim set top box competition is some kind of nefarious plan by Google to freeload on cable's "amazing history of innovation."

But the most obnoxious of these editorials have been those trying to claim that the FCC's set top box reform plan will hurt minority communities and diversity. We've long noted how one of the cable industry's favorite lobbying tricks is throwing money at minority groups so they'll parrot bad telecom policy, whether that's supporting the latest merger or opposing net neutrality. In short, many such groups are willing to support policies that actively harm their constituents -- for just the right amount of cash.

Enter Jesse Jackson, who this week penned an Op-ed over at USAToday that right out of the gate starts off on unsteady footing by mentioning the FCC's set top box reform plan in the same breath as "snarling dogs, water hoses and church bombings in the American South":

"National news coverage of the snarling dogs, water hoses and church bombings in the American South were the catalysts to exposing the ugly truths of racism and bigotry in the 1960s. Local news outlets gave new meaning to what the struggle looked like for people on its front lines. That is why a new proposal at the Federal Communications Commission (FCC) to regulate TV “set top boxes" has raised so much concern."

Wait, what? Because history is filled with racism means the FCC's plan to open up the cable set top box market to competition raises concern? If you've actually bothered to read the FCC's proposal (pdf), all the rules would do would require cable companies to take their existing programming -- and make it available to third party hardware using the delivery methods and copy protection of the industry's choice. If anything the move would result in consumers getting access to more diverse programming options than ever before, given it would eliminate the traditional cable box walled garden, and replace it with hardware that nudges consumers in the direction of an ocean of streaming content.

Just like the cable industry (surely coincidental, right?), Jackson tries to claim that the FCC plan would let hardware vendors obtain cable programming "without any compensation":

"Essentially, the FCC is proposing that small and diverse television programmers such as Revolt and Vme TV hand over their television content to third party device manufacturers without any compensation. These companies could then pull networks apart, ignore copyright protections and dismantle the local and national advertising streams that have traditionally supported high quality, multicultural content."

Again though, that's not true. Cable customers will still pay cable companies the same high rates for the exact same content lineups using the exact same copy protection, users will just be able to access it via a wider variety of hardware. That's much like how third party hardware (like TiVO) work now, except without the costly and cumbersome CableCARD installation. Jackson (or what ever cable lobbyist ghost writer rented his name for the afternoon) preaches on -- pretending he's engaged in a brave civil rights battle:

"Diversity on television and media still matters as much as it did in the 1960s. While new video platforms and content are being developed, the promise of this new medium will not be an immediate substitute for the current range of images and voices now available on TV. Furthermore, the market is already demonstrating its own agility to change with many new devices, streaming options and services bringing traditional television and Internet video onto our screens seamlessly.

Fighting for diversity in programming and media ownership is one thing. Opposing a plan that would actually help diverse communities by making cable cheaper while delivering more diverse content than ever before is something else entirely. Jackson tries to support his shaky position by rattling off a laundry list of politicians and minority groups that oppose the FCC's plan:

"Leaders of the Congressional Black and Hispanic Caucuses have voiced opposition to this proposal; to date, over 80 House Democrats have expressed opposition or serious concerns. Major civil rights organizations, such as the National Urban League and the League of United Latin American Citizens (LULAC), have asked the FCC to pause this proceeding until more empirical data detailing the impacts on diversity is released."

And while it's possible a few members of these groups actually believe (or are mislead to believe) the FCC's plan hurts diversity, all Jackson's laundry list of such groups does is highlight just how pervasive this kind of lobbyist dreck has become. Most consumers frankly have no idea that "astroturf" of this type even exists, and as a result many will be convinced that a plan that actually helps them will do them harm thanks to Jackson's missive. Comcast has found this kind of sock puppetry so effective, it now calls its top lobbyist David Cohen the company's "Chief Diversity Officer."

And while this really is nothing short of disinformation, it speaks volumes about the quality of the cable industry's argument -- and its fear of set real top box competition -- that it needs to resort to grotesque, misleading puppetry of this type.

Filed Under: cable box, competition, copyright, diversity, fcc, fud, jesse jackson, open technology, set top boxes
Companies: comcast