Copyright Office Has Big Issues With FCC Set-Top Plan

The U.S. Copyright Office told some House members this week that while it "welcomes and supports" the FCC's stated goal of promoting competition and choice in the set-top box market, it is concerned that FCC Chairman Tom Wheeler's proposal to "unlock the box," as currently constituted, "could interfere with copyright owners' rights to license their works as provided by copyright law, and restrict their ability to impose reasonable conditions on the use of those works through private negations."

Wheeler, backed by the commission Democrats, has proposed requiring MVPDs to make their set-top programming and data available to third parties as a way to promote competition in a set-top box market now dominated--99%--by rentals from cable and satellite operators.

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That Copyright Office input came in a letter to a quartet of House members, who had contacted the Office with their own concerns about the set-top proposal's impact on content and copyrights. The Copyright Office noted the July 12 set-top box oversight hearing at which commissioners, particularly Democrat Jessica Rosenworcel, said they might take a different approach and that "emerging" alternative proposals--that would most notably be cable operators' "ditch the box" proposal, showed promise. "The Copyright Office is therefore hopeful that the FCC will refine its approach as necessary to avoid conflicts with copyright law..."

The office, which had expressed reservations about the Notice of Proposed Rulemaking (NPRM) with FCC Democratic Commissioner Jessica Rosenworcel among others, said that undermining private licensing agreements would be "inconsistent with the rights granted under the copyright Act.

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It suggested the FCC proposal would undermine those agreements. "The proposed rule would not by its terms restrict repackaging, manipulation, or commercial exploitation of the programming made available to the third-party device and application producers, even where private contractual agreements between programmers and MVPDs might prohibit such activities."

The Office suggested such undermining threatened a video marketplace many consider a new "Golden Age" of TV.

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In its analysis the office said that the NPRM encroached on exclusive licensing rights. "It appears inevitable that many negotiated conditions upon which copyright owners license their works to MVPDs would not be honored under the proposed rule."

It said arguments that third-party boxes and software were analogous to TVs, which passively display MPVD programming without alteration does not square with the rule, which would apply not to just passive hardware by sofware that could be used  to manipulate, repackage and resell content in ways that violated contractual conditions.

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“As Chairman Wheeler has said, the Commission will ensure programmers’ contracts and copyright are protected as we move ahead with rules to give consumers more choice for accessing content as required by law," said an FCC spokesperson. "We appreciate the Copyright Office’s input.”

The office was responding to the FCC's initial proposal, said an FCC source familiar with the progress of the item, who added that the final proposal will be reflective of stakeholder input and responsive to copyright concerns. 

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The office says it has heard the FCC's statements that the NPRM is not intended to negate private contracts, but says it is not clear how it could do so.

The office had a word of warning for the FCC: "The Copyright Office would caution against government action that would interfere with rather than respect the flexible legal framework Congress has set forth," it said.

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But the office was not done. It said the NPRM also could potential lead to "direct or indirect infringement of copyright owners' exclusive rights of public performance, display, reproduction, and/or distribution."

The office took no position on MVPD's claim that they have a copyright interest in how they package and present their programming. But it was on the same page as MVPDs when it came to the potential for promoting piracy. "A reasonable concern is that, in response to the Proposed Rule, this market[ in st-tops that access pirated over-the-top content] might expand to encompass devices designed to exploit the more readily available MVPD programming streams..."

The NPRM points out that MVPDs will have "remedies under copyright law," but the office echoed MVPD concerns about the barriers to enforcement, including no obvious means to monitor third parties and the fact that much of the legal landscape around the issue "remains uncharted." Then there is the potential prohibitive expense of federal court actions that could take years, the office said.

On the receiving end of the Copyright Office letter were Reps. Marsha Blackwell (R-Tenn.), G.K. Butterfield (D-N.C.), Doug Collins (R-Ga.), and Ted Deutch (D-Fla.) sent a letter to the office Friday (July 15).

At an FCC oversight hearing in the House Communications Subcommittee, Blackburn and others expressed concerns about the proposal and Blackburn said she had talked to the Copyright Office and that it had issues with the impact of the FCC proposal on content. At the hearing, FCC Commissioner Jessica Rosenworcel also she had talked to the office and confirmed it had concerns.

Rosenworcel has said the initial proposal, which she voted for but had reservations about, is flawed and a different approach is needed.

Butterfield, chairman of the Congressional Black Caucus, joined Rep. Yvette Clarke (D-N.J.), its first vice chair, back in May to call on the FCC to pause its set-top box proposal until the Congressional Research Service and Government Accountability Office complete studies of the impact of the proposal on diverse and minority media.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.