The Cable Industry Threatens To Sue If FCC Tries To Bring Competition To Cable Set Top Boxes

from the you-see,-we-don't-really-do-competition dept

Back in February the FCC voted on a new plan to open up the traditional cable box to competition. According to a fact sheet being circulated by the agency (pdf), under the FCC's plan you'd still pay your cable company for the exact same content, cable operators would simply have to design systems -- using standards and copy protection of their choice -- that delivered this content to third-party hardware. The FCC's goal is cheaper, better hardware and a shift away from the insular gatekeeper model the cable box has long protected.

Given this would obliterate a $21 billion captive market in set top box rental fees -- and likely direct consumers to more third-party streaming services -- the cable industry has been engaged in an utterly adorable new hissy fit. This breathless hysteria has primarily come in the form of an endless stream of editorials -- most of which fail utterly to disclose financial ties to cable -- claiming that the FCC's plan will boost piracy, hurt privacy, "steal the future," and even harm ethnic diversity.

And now, the industry is also threatening a lawsuit. As the industry argued with Title II, net neutrality, and everything else, former FCC boss turned top cable lobbyist Michael Powell is arguing that the FCC has once again overstepped its regulatory authority:

"An agency of limited jurisdiction has to act properly within that jurisdiction," Powell said, making it abundantly clear the NCTA does not believe the FCC has not done so in this case. He said that the statute empowers the FCC to create competition in navigation devices, not new services. "Every problem does not empower an FCC-directed solution. The agency is not an agency with unbridled plenary power to roam around markets and decide to go fix inconveniences everywhere they find them irrespective of the bounds of their authority.

Except unlike net neutrality, telecom policy wonks like Public Knowledge's Harold Feld (who probably spends more time wading through FCC policy and legal issues than anybody on earth) notes there's absolutely no doubt the FCC has the authority to act here:

"First, it’s important to recognize that the cable folks were already in front of the D.C. Circuit three times on this issue, and lost each time. See General Instrument Corp. v. FCC, 213 F.3d 724 (D.C. Cir. 2000); Charter Communications Corp. v. FCC, 461 F.3d 31 (D.C. Cir. 2006); and Comcast Corp. v. FCC. In each of these cases, the cable industry made similar statutory arguments about the limits of FCC authority in Section 629. On each occasion, the D.C. Cir. — which was a lot more pro-business and anti-FCC back then, rejected them.

Despite being 0-3 on all challenges to the FCC’s 629 rules to date, NCTA’s cadre of lawyers assures us that this time will be totally different because FCC, overreach, regulation, power mad, Title II, Google too, Leonard Bernstein Leonid Brezhnev, Lenny Bruce, and Tom Wheeler END OF THE WORLD AS WE KNOW IT!! Or something like that.

So if the cable industry's lawsuit goes nowhere, its only other hope is that it can convince the public via editorials, sockpuppetry and astroturfing that the FCC's plan isn't actually about helping consumers, it's just a power-crazed attempt by "big tech" (read: Google, Amazon) to treat poor, under-appreciated cable companies unfairly. The problem with this effort, as usual, is that the cable industry remains the least liked industry in America thanks to a generation of anti-competitive behavior. Therefore the only folks likely to buy the cable industry's argument here are those with a political axe to grind (conflating government over-reach in other areas with the FCC's attempts to fix a broken telecom market), or those that tend to profit from said broken telecom and TV market.

If there's any question at all about the FCC's effort, it's whether or not the agency would find its time better spent focusing its regulatory calories on shoring up broadband competition, since the rise of Internet video is inevitably destined (even though it may take another decade) to put the lame old cable box out to pasture without government intervention.

Filed Under: cable, competition, fcc, lawsuit, set top box, stbs
Companies: comcast, ncta, time warner cable