FCC Chairman Leaves New Cable Box Rules In Doubt
Federal Communications Commission Chairman Tom Wheeler’s announced resignation from the commission Thursday likely ends his attempts at new cable-box rulemaking that would have opened cable services to third party equipment manufacturers and threatened current equipment leasing models by cable multi-system operators.
Wheeler, who said he will leave the commission effective Jan. 20th, led the FCC with a mission of establishing “competition, competition, competition.” Though his opinions often clashed with those of some more conservative-minded commissioners, the body managed to establish highly controversial rules on net neutrality, ensuring broadband providers wouldn’t throttle bandwidth or prioritize certain streaming services over others.
In a statement Wheeler said: “I am deeply grateful to the president for giving me this opportunity. I am especially thankful to the talented commission staff for their service and sacrifice during my tenure. Their achievements have contributed to a thriving communications sector, where robust investment and world-leading innovation continue to drive our economy and meaningful improvements in the lives of the American people.
“It has been a privilege to work with my fellow commissioners to help protect consumers, strengthen public safety and cybersecurity, and ensure fast, fair and open networks for all Americans.”
Wheeler could have remained on the FCC although his status as chairman was coming to an end.
Now with an apparently pro-business Republican president about to take office, the debate on net neutrality appears to be heating up again as President-Elect Trump continues to make de-regulatory noises. This also likely spells an end to Wheeler’s crusade to open cable boxes to third-party manufacturers through new rulemaking.
Read more on our take on the post-Wheeler FCC after the jump:
In all, Wheeler who was a controversial pick to the commission in 2013 due to his past roles in lobbying on behalf of cable interests, was hailed by supporters and opponents, alike, as a public official who kept the public’s interests in focus.
Gary Shapiro, president and CEO of the Consumer Technology Association (CTA), thanked Wheeler and Commissioner Jessica Rosenworcel, who is also leaving the commission, for their service to the industry and the country.
Republican legislators had threatened that if Wheeler did not leave the commission, as is customary for the chairman to do upon a change in presidential administrations, the confirmation of Rosenworcel, another FCC Democrat, would be held up. The Senate did not approve Rosenworcel for a new term before recess last week, and she will have to leave the commission by Jan. 3rd.
The departures leave the FCC with two Republican Commissioners, Ajit Pai, who appears to be the favorite to be appointed interim chairman, and Michael O’Reilly and Democrat, Mignon Clyburn. Three commissioners are all that’s required to make a quorum, a positive position welcomed by some de-regulation advocates.
“We thank Chairman Wheeler and Commissioner Rosenworcel for their service, particularly their leadership in implementing the world’s first TV broadcast spectrum voluntary incentive auction. As our world becomes more connected and devices become powerful hubs for our connected lives – from wearable technology to smart home devices to self-driving cars – we need additional licensed and unlicensed spectrum now more than ever. Chairman Wheeler and Commissioner Rosenworcel have been key drivers of freeing up the spectrum we need, and consumers will benefit from their legacy.”
Wheeler will make one of his final public appearances as FCC chairman at CES 2017 on Jan. 5th in Las Vegas to discuss the challenges and opportunities facing the FCC.
FCC Commissioner Pai stated: “Like his beloved Ohio State Buckeyes, Chairman Wheeler brought passion and tenacity to the playing field each and every day. Despite our differences in many areas of communications policy, I commend him for his years of public service. It has been a privilege to serve alongside him, and I wish him well in his future endeavors.”
Other industry leaders also recognized Wheeler’s contributions and leadership on difficult issues.
“We thank Chairman Wheeler for his service to the American people as leader of the Federal Communications Commission,” Michael Powell, National Cable & Telecommunications Association, president and CEO, said in a statement. “Chairman Wheeler has presided over the commission during a period of significant change and exciting innovation in the communications marketplace. Chairman Wheeler’s mantra from the beginning of his tenure has been ‘competition, competition, competition,’ and he should be proud that American consumers are enjoying the benefits of today’s vibrant and highly competitive video and broadband sectors.”
NAB President Gordon Smith stated: “Chairman Wheeler has been a tenacious fighter on telecommunications issues during a period of remarkable change in the media landscape. We wish him well in whatever the future may hold.”
Charlie Nooney, chairman and CEO of MobiTV, a leading provider of interactive end-to-end mobile media solutions, noted that Wheeler’s early but unexpected resignation from the FCC, “creates question around two of his biggest initiatives given the administration change.”
“The first, net neutrality will be under review given that the Republican majority considers the regulation burdensome. That discussion will be top of mind for the FCC in the new year. If net neutrality is deprecated, we may see the scale tilt away from a pure app approach toward MVPDs for some video services.”
Nooney continued that “the second area of Wheeler’s legacy focused on boosting competition in the set-top box industry, which failed to receive Democratic support last year. Regardless of the regulatory rulings’ path of changes, the STB industry is being driven by increasing consumer demand for alternatives, changes in viewer consumption and the realities of video operators’ increasing cost structure around hardware. Competition away from traditional STB’s will be driven by the marketplace and only accelerated by favorable regulatory rulings.”
Although the cable box initiative was viewed by a number of consumers’ rights organizations and politicians as welcome “pro-consumer” rulemaking that would have brought competition for high equipment licensing fees, some industry leaders saw it as unnecessary regulation at a time when cable boxes in general appear to be giving way to software-based apps that can handle decryption and gatekeeping. Still, companies like Comcast continue to move forward with new equipment like its X1 platform and other devices designed to support 4K and HDR.
But the biggest argument of detractors was against the creation of a central licensing body to implement a single license for programming over applications that conflicts with established licensing practices. Today, programmers do not offer uniform rights to all devices and uses.
MobiTV’s Nooney pointed out that the proposed cable box rules could have “dramatically altered” the home user experience adding that such measures would have required a well thought-out user experience with more dependency on features like voice control. However, the improvement could have been mind-blowingly substantial.”
Nooney said that “first, the processing power of streaming boxes far outweighs the thin-margin of set-top boxes (STBs). This exhibits itself as a snappy user interface and overall pleasant experience compared with the notoriously slow and antiquated user interface on the STB,” Nooney explained. “Second, the rich ecosystem of applications means that you move from a single purpose box to a multi-purpose device that has (almost) unlimited possibilities (home healthcare, home automation, streaming music services, OTT video apps, etc.). This also means that a user could have a single user interface for all video content with universal search. Lastly, the user can upgrade and switch devices at will and not be tied to the glacial pace of innovation on the STB side of things (historically speaking). As an example, you don’t have to wait for your provider to support 4K Ultra HD TV.”
The next FCC Chairman will have big shoes to fill.
By Greg Tarr
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