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Fake Copyright Arguments at the FCC on Set-Top Boxes

DEEPLINKS BLOG
May 11, 2016

The FCC may give consumers full control of their set-top box and that scares a lot of companies.

As the Federal Communications Commission (FCC) continues working on breaking up the TV set-top box monopoly, the onslaught by large companies who have zero interest in promoting a competitive open technology environment has been fierce. Cable companies, the movie industry, the recording industry, and their parakeet allies are regularly misrepresenting the bounds of copyright law to Congress and the FCC in an attempt to secure powers that copyright law does not provide them.

Why are they doing this? Because they are hoping that the FCC will repeat the same mistake it has in the past when attempting to break up the TV set-top box monopoly, which is to leave them with enough control over the design and features of personal TV hardware and software so that choice becomes an illusion.

EFF has pointed out how this proceeding is about promoting competition and not changing copyright law. But 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. And consumers know the personal empowerment that comes with being able to choose the best entertainment devices and software for themselves, separate from the entertainment content itself.

Congress recognized this problem twenty years ago and passed a law that empowered the FCC to fix the problem.

"People will be able to go to a Radio Shack and be able to purchase their own set-top box. They will be able to purchase their own converter box, their own modem. They will be able to purchase any product which is accessible to this information superhighway. It offers, in other words, real competition in the consumer electronics market-place as well."  - Congressman Markey speaking on the Communications Act's goals to open up the market on February 1, 1996.

So what happened?

The FCC issued regulations but allowed the cable industry to keep some control. Cable companies today have to give customers a descrambling device called a CableCARD that can go into devices like a TiVO, a PC, or (in theory) a TV itself. But the CableCARD era has been riddled with endless examples of how cable companies frustrate consumer switching away from rented set-top boxes because they controlled the means to switch. Whether it was making a cable customer go through ten hours of time to switch boxes to prohibiting self-installation, the cable industry regularly demonstrated its unwillingness to let consumers purchase their own box. It worked far too well and cable companies currently hold 99 percent of the box market. Now the FCC is trying a new approach to do the job Congress gave it through its "Unlock the Box" proposal after Congress repealed key parts of the CableCARD rules. In response, opponents of an open set-top box market are desperately searching for a new way to exert control and once again thwart the FCC's mission.

They believe that pseudo-arguments about copyright law will be a means to that end. This pseudo-argument comes in many forms, but it boils down to telling the FCC that the agency must give them the power to determine which third-party devices are allowed to show you television content that you already paid to watch. They argue that the only way consumers should be allowed to own their TV set-top box is if the movie industry, cable industry, record industry, and other major corporations all give their sign-off through a contract or license. This is far removed from what copyright law actually allows or requires, which is why they need the FCC to maintain regulations that give them that power.

The law gives copyright holders specific exclusive rights, such as the right to reproduce, distribute, and publicly perform their works. But all of those rights are limited by the public's fair use rights. And copyright doesn't give anyone an all-encompassing right to demand fees for and control the functionality of every third-party device that interacts with content. For example, copyright law allows for the existence of cloud computing DVRs, without any license or royalties to copyright holders. It also allows consumers to record and time-shift content under fair use, and private performances of copyrighted works in your home, again without any rightsholder toll or veto. You wouldn't think that if you believed the comments filed by industry criticizing the "Unlock the Box" proposal.

"Under copyright law, someone may not use copyrighted content without the permission of the copyright holder. Yet the proposal requires MVPDs to transmit to third-party device, Internet application, and web service providers all the content the MVPDs license from programmers, allowing those third parties to exploit the content for their own commercial services without seeking permission from the programmers or compensating them." -(MPAA page i)

"The device manufacturers are not parties to the content license agreements, which is exactly why MVPDs need to limit such devices to the presentation of MVPD service in a controlled manner, such as through apps that honor all licensing commitments." - National Cable and Telecommunications Association (page 34-35)

"Yet the proposed rules would force MVPDs and programmers “to . . . remove . . . or impair” their chosen content protection system and to replace it with another that they have not approved." - AT&T (page 14)

"By mandating that MVPDs transmit copyright owners’ content to third-party navigation devices without authorization from the copyright owner..." - Comcast/NBC-U (page 47-48)

"nothing in the proposal imposes any clear obligations on these third parties or delineates any enforcement mechanism by which copyright holders or licensors can protect their licensed content." Copyright Alliance (page 2)

According to the pseudo-copyright regime that Big Cable and Hollywood believe in, your television manufacturer needed a contract to show you a movie, your router needed a license to stream video data to your smart phone, and before you activated your personally built computer at home you would need a license to view content on the internet. It gets worse than just arguments for new rights to controls that have no basis in copyright law. The Unlock the Box opponents even express fears about user-empowering technologies from 30 years ago. The Recording Industry Association of America, for example, expressed concerns that third-party set-top box devices will include features such as the ability to manually or automatically record streaming content (see page 8). We hate to break it to them, but that has already been invented and the Supreme Court was ok with it.

EFF hopes that the FCC and Congress can see this latest string of pseudo-copyright arguments for what they truly are about, a plea for the FCC to give them enough control over technology design that they can turn around and thwart the agency's mission to finally bring competition to the TV set-top box market. Perhaps rather than listening to entities with no interest in changing the status quo, policymakers would be best served by listening to content creators who do not have a vested interest in keeping the set-top box market closed:

"[Pay-TV] gatekeeper power also denies Americans the opportunity to enjoy programming that reflects the diversity of our country. The video industry perpetuates an outdated lack of diversity that fails to harness the talents of people of color, women, the LGBTQ community and people with disabilities. Only a few of the hundreds of networks MVPDs offer serve diverse communities or incorporate programming that is produced with a staff that is as diverse as the American TV audience. By lowering the barriers to accessing television viewers, set-top box competition would increase the ability of diverse content to reach a wider audience." - Writers Guild of America, West (page 3)

There's still time to make your voice heard: the FCC is taking public comments until May 23. You can submit your comments through this form - just enter "16-42" in the box labeled "Proceeding Number."

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