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House Sets July 12 Set-Top Talks

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.”