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How to Fix the ‘Unlock-the-Box’ Plan

The Sept. 29 Federal Communications Commission Open Meeting presented an interesting turn of events for the commission’s set-top box proceeding. After whiffing completely on the NPRM’s convoluted “three flows” approach, commission leadership recanted its opposition to an app-based approach — one that I had been advocating for months — and centered its attention on it.

An apps-based approach also was at the core of what the related industry filed as a compromise plan to achieve resolution of this proceeding. Unfortunately, the leadership did not accept yes for an answer and tried to add a multitude of unworkable provisions to a reasonable plan. In doing so, they found a way to make all interested parties essentially hate the proposal. In reality, it was not just a lack of time that led to the chairman pulling the item off the meeting agenda at the last minute. This proceeding is still plagued by major unresolved issues:

• FCC Control of the Model License and API: Some have proposed replacing provisions in earlier versions that provided explicit FCC review and approval roles with active FCC monitoring and threats of future action if progress is deemed unsatisfactory. For practical purposes, they are the same thing. Preserving any role for the commission is highly objectionable, especially to the content and MVPD communities, because it could potentially alter private commercial agreements without full knowledge or understanding of the entire negotiation and tradeoffs made.

• The Myth of Universal Search: One of the benefits of the item touted by proponents is that it will enable a competitive market in so-called “universal” or “integrated” search apps. This mandate would allow an MVPD’s over-the-top competitor access to all the proprietary information needed to undercut the MVPD’s content pricing to consumers, a truly disastrous outcome. Moreover, since the commission mandates the metadata flow only from MVPDs, not from over-the-top providers, the promise of universal search will be unfulfilled.

• Questionable Feasibility: A key component of this item is a requirement that every MVPD with more than 400,000 subscribers develop and support a native app for every widely deployed operating system. No one even knows how many apps this would be right now. Is it 10? Twenty? The only way to transform this mandate into anything resembling a manageable, realistic task would be to provide a safe harbor for particular widely adopted and available consumer apps so that MVPDs could better manage their scarce software development and support resources.

• Opening the Door to the App Tax: Today, many of the widely deployed platforms usually receive an upfront fee or cut of revenues from software developers to have their apps made available on these very popular platforms. Clearly, MVPDs should not be required to develop either full-featured or consumption-only apps for platforms demanding revenue sharing of any kind. This needs be addressed upfront, not punted to a later date.

• Competition From Pirated Content: Programmers and MVPDs have registered valid concerns that the third-party integrated search engines contemplated by the item would result in pirated content being displayed in search results alongside legitimate MVPD content.

Substantively, the only way to fix the item is to address the key problems and flaws identified above. Only by doing so would a true app-centric approach be workable for most of the affected companies.

Michael O’Rielly is a Republican Federal Communications Commission member.