Unlocking the Set-Top Box

Unlocking the Set-Top Box

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February 24, 2016
Unlocking the Set-Top Box
On February 18, 2016 the Federal Communications
The proposed rules, aimed to make it easier for consumers
Commission (FCC) proposed rules intended to make it
to buy and use their own set-top boxes, have incited fierce
easier for television viewers who subscribe to cable or
disagreement among competing interests in the television
satellite services to buy set-top boxes from retail outlets.
industry. There are three major areas of controversy:
These technical proposals have ignited a firestorm of
controversy amid claims that they could alter the
(1) Whether or not MVPDs must provide consumer
distribution of profits within the television industry and
electronics firms access to their raw programming feeds
erode long-standing consumer protections in federal law.
and programming guide data. At present, the location of
particular broadcast stations and television networks on an
Background
MVPD’s menu is determined in negotiations between these
More than 116 million U.S. households watch television.
parties and the MVPDs. For example, a cable television
Of those, approximately 86% subscribe to a service that
network may grant the MVPD permission to retransmit its
distributes multichannel video programming through
programming only on the condition that the network receive
cables, telephone lines, or a satellite dish on the premises.
a menu position it deems desirable and a certain number of
These Multichannel Video Programming Distributors, or
promotional logos on the MVPD’s program guides. Both
MVPDs, fall into one of three categories: cable providers
MVPDs and networks are concerned that companies selling
such as Comcast and Time Warner Cable; telephone
set-top boxes directly to viewers could organize the
company (telco) services such as Verizon’s FiOS; and
programming as they prefer, disregarding the terms of the
direct broadcast satellite providers (Dish Network and
MVPDs’ and networks’ contracts with one another. The
AT&T’s DirecTV). (See Figure 1.)
FCC claims that competition in the device market cannot
exist without competition in the devices’ features (i.e.,
Figure 1. How Viewers Receive Television Programs
program presentation and navigation.) MVPDs and
Percentage of Television Households as of 3Q 2015
television networks want the FCC to allow them to control
the display of information to viewers regardless of who
provides the set-top box.
(2) The extent to which consumers can switch between
MVPD and other programming on a single device. The
set-top boxes leased by MVPDs usually provide access only
to the MVPD’s programming. Viewers wishing to watch
programs from online video distributors (OVDs), such as
Netflix or Hulu, must use another device to access those
programs over the Internet. A set-top box sold at retail
might allow the viewer to switch back and forth between
MVPD programming and OVD programming, potentially
making it more difficult for MVPDs to retain the attention
of their subscribers. The FCC asserts that integration with
OVD services will enable consumers to find minority and
special interest programming more easily.

Source: The Nielsen Company.
(3) The degree to which consumer electronics firms will
Notes: Some households may subscribe to multiple services.
be required to obey the consumer protection laws that
govern MVPDs. Specifically, MVPDs must (1) keep
To access MVPDs’ programming, which is supplied by
subscribers’ viewing habits private (47 U.S.C. §§531,
338(i)), (2) abide by advertising limits during children’s
television networks and studios, consumers need electronic
programming (47 U.S.C. §303(a)), and (3) build devices
equipment compatible with the service to which they
that display emergency alerts (47 C.F.R. Part 11), closed
subscribe. Most subscribers lease set-top boxes from the
captioning (47 U.S.C. §613), and parental controls (47
MVPDs. Under the Telecommunications Act of 1996 (47
U.S.C. §303(w)). In its rulemaking, the FCC asks whether it
U.S.C.§549), the FCC must assure the availability in retail
has the legal authority to bind consumer electronics
outlets of devices capable of accessing MVPD
manufacturers and suppliers of software for these devices to
programming, thereby offering consumers an alternative to
those laws.
leasing set-top boxes from MVPDs.

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Unlocking the Set-Top Box
History
capabilities, and technical standards of a not unduly
burdensome, uniform, and technology- and platform-neutral
Integration Ban
software-based downloadable security system designed to
The debate over cable boxes began as a dispute over how
promote the competitive availability of navigation devices
MVPDs could install security so that only paid subscribers
in furtherance of section 629 of the Communications Act of
have access to their programming. In 1998, when it set forth
1934 (47 U.S.C. 549).” The working group was required to
rules implementing the 1996 Telecommunications Act, the
file a report with the FCC by September 4, 2015.
FCC required MVPDs to separate the security functions of
cable boxes from the navigation functions. The security
FCC Actions in 2015 and 2016
technology had to be available to third-party manufacturers
To fulfill this assignment, the FCC chartered the
of set-top boxes. To ensure that cable operators would
Downloadable Security Technology Advisory Committee
adequately support competitors’ access to this security
(DSTAC). The group included representatives of content
technology, the FCC banned the cable operators from
owners, MVPDs, consumer electronics firms, consumers,
integrating it into their own set-top boxes. This requirement
and equipment manufacturers. Two major points of
is generally referred to as the “integration ban.”
disagreement emerged: (1) whether an examination of non-
security-related issues was beyond the scope of the
Although the integration ban nominally applied to all
congressional mandate, and (2) whether the definition of
MVPDs, the FCC effectively exempted satellite providers.
“MVPD service” includes all of the various functionalities
AT&T and Verizon, known commonly as the “telco
and features that MVPDs offer subscribers, or simply the
MVPDs,” each took a different approach to implementing
underlying programming.
the integration ban. While Verizon separated the security
functions to a limited extent for its FiOS service, AT&T did
DSTAC presented two proposals for addressing non-
not do so for its U-Verse service.
security features: (1) an MVPD-supported proposal that
would enable MVPDs to retain control of how consumers
CableCARDs
view and select programming, and (2) a consumer
In 2003, the FCC specified that cable operators use a device
electronics-supported proposal that would require MVPDs
called a “CableCARD” to provide security. A subscriber
to cede control of the presentation of programming.
may obtain a CableCARD from the MVPD and insert it in
any set-top box. However, relatively few cable subscribers
New Proposed Rules
purchase set-top boxes and install CableCARDs.
After seeking comment on the DSTAC report, the FCC
proposed new rules for set-top boxes in February 2016. The
AllVid Inquiry
proposed rules would require MVPDs to deliver three core
In April 2010 the FCC launched an inquiry seeking
information streams: (1) Service discovery: information
comments on whether it should replace the CableCARD
about what programming is available to the consumer, such
standard with an “all video adapter,” enabling all set-top
as the channel listing and the programming on each
boxes to work with all MVPD services. This proceeding is
channel; (2) Entitlements: information about what a device
known as “AllVid.” This approach would have enabled
is allowed to do with content, such as recording; and (3)
consumer electronics companies to sell devices at retail
Content delivery: the video programming itself.
without the need to coordinate or negotiate with the
MVPDs. As conceived, the adapter would perform the
To be eligible to receive these streams, third-party
tuning and security decryption functions that are MVPD-
manufacturers selling set-top boxes at retail and suppliers of
specific. Manufacturers selling at retail could differentiate
software to these manufacturers must (1) use technology
their devices through unique presentations of programming
conforming to specifications set by an independent
guides and navigation functions.
standard-setting organization, and (2) certify that they will
adhere to privacy protections and children’s advertising
Both MPVDs and cable networks expressed concerns about
limits as well as pass through emergency alert messages.
the AllVid proposal. MVPDs claimed that implementing a

“one size fits all” technology would be burdensome, while
The FCC seeks comment on whether it is correctly
cable networks argued that the proposal would hamper their
interpreting Section 629 to cover software used in
ability to protect and present their copyrighted content.
“navigation devices” and “equipment” as well as hardware.
Congressional Actions in 2014
Filing Comments
Section 106 of the Satellite Television Extension and
The FCC, as an independent regulatory agency, is bound by
Localism Act Reauthorization (STELAR; P.L. 113-200)
the Administrative Procedure Act (5 U.S.C. §§551-559),
repealed the FCC ban on the integration of the security and
navigation (“channel surfing”) functions in the set
which is designed to develop a public record upon which
-top
interested parties may comment and participate. Formal
boxes cable operators provide their customers. The ban
comments are due 30 days after publication for the
expired on December 4, 2015.
proposed rules in the Federal Register; reply comments are
due 60 days after publication in the Federal Register.
Section 106 of STELAR also directed the chairman of the
FCC to “establish a working group of technical experts
Dana A. Scherer, Analyst in Telecommunications
representing a wide range of stakeholders, to identify,
report, and recommend performance objectives, technical
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Unlocking the Set-Top Box

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