The Consumer Video Choice Coalition -- comprising Google, INCOMPAS and others -- has some bones to pick with cable operators' "ditch the box" alternative to the FCC's "unlock the box" set-top proposal.

Chip Pickering, CEO of INCOMPAS, said in a blog post that the cable proposal represents progress, but it still has a ways to go.

Read the "ditch the box" compromise proposal.

"The cable industry’s recent proposal makes some forward progress," he wrote, adding he also saw some "key" shortcomings, including:

• "It blocks future innovation. People don't want to go from a closed box to a closed app.

•  "It takes a step backward on functionality: Cable's proposal is only for streaming boxes, not DVRs ... meaning consumers would still need multiple devices.

•  "It lacks enforceability. Having been fooled before by cable promises, the FCC must take action to ensure competition, comply with the law."

FCC staffers have a bunch of questions for cable operators about the "ditch the box" proposal as well.

WASHINGTON — Federal Communications Commission chairman Tom Wheeler will face a House Communications Subcommittee FCC oversight hearing this week (July 12), and probably some grilling on the status of his controversial “unlock the box” proposal.

Rep. Frank Pallone (DN. J.), chairman of the subcommittee and ranking member of the House Energy & Commerce Committee, is one legislator likely to be looking for progress on a “ditch the box” compromise proposal from cable operators that could potentially reunite his fractured subcommittee. FCC staffers signaled last week there are points of agreement, but also sought many clarifications.

Cable operators and other stakeholders have been meeting with Wheeler’s office after it became clear that the chairman did not have a lock on three votes for his original proposal to make set-top data and programming available to third parties.

The set-top issue continued to draw a crowd last week, particularly after Comcast and Netflix announced that Netflix would be available on Comcast’s X1 platform.

Easier access to both traditional and online fare is one of the big drivers behind Wheeler’s proposal.

Read more about the FCC's proposed set-top rules.

Pallone has a particular interest in seeing movement on a proposal that both cable ops and the FCC could sign off on, and Wheeler has said he was looking forward to engaging in a “constructive dialogue” with stakeholders.

Pallone signaled to Multichannel News in an e-mailed statement that he likes the direction set-top box compromise talks are taking, so long as the final destination is consumer-friendly and protects content.

“One thing everyone can agree on is that our set-top boxes can be clunky, bad for the environment and expensive,” Pallone wrote. “The recent proposal from industry and the reaction from the FCC has brought us closer to a positive resolution.”

The FCC-industry talks followed the introduction of an apps-focused “ditch the box” compromise proposal by the National Cable & Telecommunications Association and others, as well as the signal from Democratic commissioner Jessica Rosenworcel, whose vote is needed to pass a final order, that the FCC needs to find another route to the shared goals of competition for leased set-tops and access to over-the-top content.

Pallone is said to be focused on a couple of things: first, protecting content, and second — as ranking member — reuniting committee Democrats split over the FCC’s set-top proposal.

New York Democrat Yvette Clarke, for example, has pushed back strongly on the FCC plan, while House Communications Subcommittee ranking member Anna Eshoo (D-Calif.) has tried to marshal her colleagues’ support for the proposal.

While Comcast’s agreement to add Netflix to its video navigation platform might suggest the marketplace is already wedding traditional and online content without the thumb of government on the scale — something cable ops have been arguing — backers of Wheeler’s original set-top proposal wanted to make sure that was not the takeaway.

“We think that in a competitive market, consumers shouldn’t have to look to special deals between large companies like this just to access video programming from multiple sources all in one place,” said John Bergmayer, senior staff attorney for Public Knowledge. “A competitive market will deliver lots of video apps on many different devices.”

The Consumer Video Choice Coalition, which has been pushing for the proposal, said: “Yay, Comcast customers can now watch Netflix! Now what’s wrong with unlocking the box and letting consumers watch the rest of the Internet as well?”

Pallone is looking to the July 12 oversight hearing for some encouraging words about compromise. “I look forward to continued discussion on this topic at the FCC Oversight hearing,” he told Multichannel News.

If the FCC can work out a compromise with industry, the hearing would be a good place for Wheeler to signal it is in the works — or that at least a compromise is a possibility.

The FCC may have already signaled that there is hope. Staffers have sought answers from cable operators on a host of key points in the ditch the box proposal, and signaled there are many general points of agreement, according to a copy of staff questions obtained by Multichannel News.

“FCC staff continues to meet with a wide range of stakeholders to discuss the industry’s proposal,” said a Wheeler spokesperson. “While conversations have been constructive, there is more work to do to fully understand the scope of the proposal and clarify important details. Our goal is to find the best path forward to ensure that consumers finally have the competition and choice they deserve.”

INCOMPAS, whose members include Netflix, said Tuesday the video streamer had struck a deal with Comcast to make Netflix available via the cable operator's video navigation platform, a move Comcast confirmed.

"Comcast and Netflix have reached an agreement to incorporate Netflix into X1, providing seamless access to the great content offered by both companies" the companies said in a joint statement. "We have much work to do before the service will be available to consumers later this year. We'll provide more details at that time."

RELATED: Comcast, Netflix Forge a Stronger Streaming Connection

Video providers have begun to see the benefit of making it easier for their customers to access streamed content, including Netflix. Pay-TV firms using TiVo equipment have already offered OTT services integrated into their offerings. Cable-stock analysts have been pushing them to do more, seeing it as a retention incentive.

But access to over-the-top content in competition to cable fare is a big concern in Washington these days and is driving the debate over the FCC's proposal to make sure that third parties can wed over-the-top with traditional video services. 

“From open Internet to interconnection policies, we advocated for a foundation that enables over-the-top content and traditional video to grow together, rather than apart," said INCOMPAS CEO Chip Pickering. "These smart policies, led and adopted by the FCC, have been hard fought victories that have knocked down many walls and are good for competition, consumers and free markets."

Pickering did not give Comcast a shout out for the deal, least in the statement: “Consumers are hungry for new content, and fresh creative voices. Netflix is a trailblazer that has opened doors to other streamers, and we encourage and support policies that help make search, discovery and access to all over-the-top content easier.”

Public Knowledge, which has been pushing for more seamless competition between traditional and new content delivery, including a big push for the FCC's proposal to make cable programming and data available to third parties, still saw some seams.

"We think that in a competitive market, consumers shouldn’t have to look to special deals between large companies like this just to access video programming from multiple sources all in one place," said John Bergmayer, senior staff attorney. "A competitive market will deliver lots of video apps on many different devices."

"As a side note, it is interesting to be reminded again how important the proprietary set-top box is to Comcast. It doesn’t look like Comcast plans to 'ditch the box' any time soon."

The Consumer Video Choice Coalition (CVCC), which has been pushing for the FCC set-top proposal, joined Public Knowledge in trying to leverage the announcement.

“Yay, Comcast customers can now watch Netflix! Now what’s wrong with unlocking the box and letting consumers watch the rest of the Internet as well?," the coalition said in a statement. "Comcast once again proves consumer advocates’ point; consumers are hungry for new Internet streaming content and don’t want a gatekeeper box or gatekeeper app telling them what they can and can’t watch.

“Blocking Internet streaming content is bad for consumers, content creators and innovation. It’s time for the FCC to unleash competition, and give consumers to power to watch, organize and discover the content they love on the device they choose.”

RELATED: Netflix, CW Sign Exclusive Deal

WASHINGTON — After weeks of heated opposition, it appears that Federal Communications Commission chairman Tom Wheeler does not have the votes to pass his set-top box reform plan — at least as originally proposed.

The proposal, which would require multichannel video programming distributors (MVPDs) to make their programming and data streams available to third-party devices and app developers, has taken shots from all sides — now including both the Senate majority and minority leader.

Wheeler, a Democrat, has said from the outset that he was willing to tweak the set-top plan if there were a better route to his goal of a competitive market in third-party video access devices — ideally a path that allows for access to both traditional video and the over-the-top video he sees as a key new competitor.

But cable operators were unconvinced, saying they feared Wheeler’s words were more talk than action and the item would pass pretty much as proposed.

The proposal was approved 3-2, on a straight party line vote, and while Democratic commissioner Jessica Rosenworcel voted with the majority, from the outset she said she had issues the plan.

DEMOCRAT CALLS FOR CHANGES

Rosenworcel last week said she remains optimistic that the FCC and the pay TV industry can find a way forward on set-tops to promote a competitive marketplace for navigation devices, but signaled that the problems with Wheeler’s proposal have become clear, as has the need for changes.

Rosenworcel was responding to a flurry of activity that surrounded the proposal, including efforts to block it in Congress via an appropriations bill; “ditch the box,” a National Cable & Telecommunications Association-backed alternative to the chairman’s “unlock the box” proposal; and the Motion Picture Association of America’s support for working with the FCC to resolve copyright issues.

“Set-top boxes are clunky and costly,” Rosenworcel said in a statement provided to Multichannel News. “Consumers don’t like them and they don’t like paying for them.

“Kudos to the chairman for kicking off this conversation [Rosenworcel voted along with Wheeler and Democrat Mignon Clyburn to kick off that conversation], but it has become clear the original proposal has real flaws and, as I have suggested before, is too complicated,” she added. “We need to find another way forward.”

Rosenworcel wasn’t explicitly advocating for the cable industry’s “ditch the box” effort. Rather, she was supporting efforts to find some variant of a compromise proposal that addresses the Wheeler plan’s flaws.

“I am glad that efforts are underway to hash out alternatives that provide consumers with more choice and more competition at lower cost,” she said.

Rosenworcel voted to approve the notice of proposed rulemaking (NPRM) proposing the set-top unbundling, but from the outset she suggested it was a work in progress that needed more work.

The set-top plan suffered another blow when Sen. Harry Reid (D-Nevada), the Senate’s minority leader, wrote Wheeler last week to say he thought the proposal did not sufficiently protect programmer contracts or consumer privacy, points that MVPDs have been making pointedly.

OPEN TO ‘DITCH’ PITCH

Even the chairman seemed eager to seek more common ground.

In his first public statements on cable operators’ proposal to “ditch” the set-top box, Wheeler said he was glad the industry offered up the compromise, but suggested it indicated that many of the problems those same parties had with the initial proposal weren’t problems after all. In a Q&A following a speech at the National Press Club on 5G wireless broadband, Wheeler was asked about the cable-backed effort.

“I think it is absolutely terrific that the cable industry came forward with this proposal,” he said. “I have been asking them to do this, and I think that by coming forward they indicated that a lot of the arguments that had been put up against our set-top box proposal really fell by the wayside.”

But he also said that the cable proposal indicated that copyrights and privacy can be protected, that small networks can continue to thrive and that providers’ networks don’t have to be redesigned to do all that.

Wheeler said he wanted to now engage in “constructive” dialogue on how to write the specific regulations to achieve those ends.

Asked if the set-top proposal was in trouble, FCC press secretary Kim Hart responded: “Chairman Wheeler has repeatedly said he is interested in a constructive dialogue with his FCC colleagues and all stakeholders to reach the best result for consumers. He welcomes the feedback to his proposal to give consumers new options for accessing the content they pay for, and he looks forward to engaging in continued conversations to inform the final rules.”

Internet giant Google, which pushed for the set-top proposal, echoed Wheeler in calling the cable-operator alternative “a constructive effort towards the goal of more competition and consumer choice,” adding, “We hope that it sparks a dialogue between the FCC and interested parties to reach a good outcome for American viewers.”

One MVPD executive said all that activity points to more than just more dialogue.

“I’ll let you determine whether chairman Wheeler’s proposal is dead,” said the executive, who asked to speak not for attribution. “But Google is now giving up the fight, Senator Reid’s letter was pretty strong and Commissioner Rosenworcel from the get-go called it too complicated and recently said it has real flaws.”

FCC commissioner Jessica Rosenworcel is optimistic that the FCC and industry can find a way forward on set-tops to promote a competitive marketplace in navigation devices, but signals that the problems have become clear, as has the need for more work on the proposal.

That proposal is to require MVPDs to make their program and data streams available to third-party devices and app developers to promote competitive alternatives, including wedding traditional and over-the-top content.

Rosenworcel was responding to a flurry of activity last week that surrounded the proposal, including efforts to block it in Congress via an appropriations bill, a National Cable & Telecommunications Association-backed "ditch the box" branded alternative to the chairman's "unlock the box" proposal, and the Motion Picture Association of America's support of working with the FCC to resolve copyright issues.

"Set-top boxes are clunky and costly," Rosenworcel said in a statement provided to Multichannel News/B&C. "Consumers don't like them and they don't like paying for them," she added. "Kudos to the chairman for kicking off this converation [Rosenworcel voted along with Wheeler and Democrat Mignon Clyburn to kick off that conversastion], but it has become clear the original proposal has real flaws and, as I have suggested before, is too complicated. We need to find another way forward."

She was not endorsing the cable effort, but instead appeared to be supporting the effort to find a compromise proposal that addresses the flaws.

"I am glad that efforts are underway to hash out alternatives that provde consumers with more choice and more competition at lower cost."

FCC Chairman Tom Wheeler applauded the NCTA-backed compromise effort Monday following a speech at the National Press Club, though he, too, suggested it was part of a continuing conversation rather than a solution.

Rosenworcel voted to approve the notice of proposal rulemaking (NPRM) proposing the set-top unbundling, but from the outset she suggested it was a work in progress that needed work, which was clear from her statement at the public meeting where the item was voted.

"Important questions have been raised about copyright, privacy, diversity-and a whole host of other issues in a marketplace that has been tough for competitive providers to crack," she said back in February. "We will need to explore them in the record that develops.... This rulemaking is complicated. It describes three information streams for navigation services, work that needs to be done by standards bodies, a medley of security systems, and a trio of parity requirements. The most successful regulatory efforts are simple ones. More work needs to be done to streamline this proposal, because in the end for consumers to enjoy the bounty of what we have proposed execution is all."  

Related: Senate Appropriations Passes Set-Top Pause Provision.