Lawmakers take aim at pay-TV set-top business

Members of Congress, the FCC and the cable and consumer electronics industries continue to fight for position in a lobbying battle that will impact companies and workers involved in installing leased set-top boxes from pay-TV companies.

The latest development occurred right before the Thanksgiving holiday, when both Republican and Democratic members of Congress grilled FCC Chairman Tom Wheeler over his agency's controversial AllVid proposal.

AllVid is one of several proposals rendered by the FCC's Downloadable Security Technology Advisory Committee (DSTAC), a committee set up to find a new technology that would enable retail set-top devices to work in the pay-TV ecosystem.

Led by the National Cable Telecommunications Association, the cable industry is lobbying hard against the adoption of AllVid, which would place some sort of yet-to-be-developed, government-mandated device in between the cable headend and a retail set-top. The device would essentially decode the encrypted cable signal for the retail device.

The NCTA said AllVid would impose "unnecessary burdens" on operators, while also forcing consumers to pay for and power additional hardware.

The cable industry supports an alternative "apps-based" proposal rendered by DSTAC, but only to a point. Cable operators believe their multiscreen TV Everywhere apps already do a good job of including CE devices like smart phones and tablets in the pay-TV ecosystem. 

In fact, the NCTA has taken the position that DSTAC needs to do nothing beyond render the proposals it has already made.

On the opposing side, makers of retail set-top and IP devices, including TiVo, Google and Amazon (NASDAQ: AMZN), say current pay-TV multiscreen apps are too primitive. A new solution, they say, is required to allow them to create richer user experiences for viewers.

Matt Zinn, senior VP, general counsel and chief privacy officer for TiVo, made the analogy of Apple (NASDAQ: AAPL) convincing AT&T (NYSE: T) to run its phone service through its iPhone and iOS interface. 

"That resulted in an explosion of usage," Zinn told FierceCable in an October interview.

In their efforts to further open the pay-TV set-top market, consumer electronics makers are backed by powerful members of Congress, including Democratic presidential candidate and Senator Bernie Sanders (I-Vt.), and Sens. Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.).

These lawmakers claim the pay-TV industry is raking in $20 billion revenue each year by leasing pay-TV set-tops, and is burdening consumers by, on average, $231 a year for each pay-TV household in leasing costs. 

These lawmakers want the FCC to intervene and deliver to consumers what they feel is needed additional choice in terms of their video playback device. 

For installers, the result of this battle will greatly determine what kind of technology they'll be integrating into customers' homes in the future.

DSTAC was formed a year ago, when President Obama signed into law the Satellite Television Extension Act Reauthorization (STELAR). Part of this law mandated the FCC to create a committee to develop a replacement to CableCard, the security feature that was set up more than a decade ago to enable devices like TiVo set-tops to work in the pay-TV ecosystem.

To date, however, only a small number of CableCard-enabled retail devices have been sold. 

Related articles:
ACA joins NCTA in seeking to shoot down FCC's AllVid proposal
Bernie Sanders joins Congressional battle against '$20 billion' pay-TV set-top market
NCTA, pay-TV lawyers meet with FCC, try to shoot down tech industry's AllVid push

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