Opening Up the Set-Top Box

With yesterday's announcement of an agreement between Comcast and Netflix to make the leading SVOD service available on the largest cable operator's set-top boxes, we are starting to see the regulatory "sausage get made".

Ma Bell would rent you a Princess phone

As you may recall, in late January FCC Chairman Tom Wheeler announced a plan to open up the cable set-top box marketplace, drawing an analogy to an earlier time when the FCC opened up consumers' ability to use their own phones on Ma Bell's telephone network. It is not a terrible analogy, although the actual proposal may not have been the most well thought through idea with National Cable Telecommunications Association CEO Michael Powell, himself a former FCC Chairman, leading the chorus of boos and the cable industry responded by saying the proposal was ridiculous or worse. 

No, it doesn't make sense that a third party can reconfigure a "cable TV package" for which it has not negotiated without the permission of the programmers (who own the channels) or the distributor (which licenses them and delivers them to consumers). Also a third party shouldn't be able to insert its own ads into such programming either. As I said, it wasn't the most well thought through idea.

Wheeler's own comments at the NCTA's annual convention in May suggested that he was willing to negotiate, as long as the cable industry didn't think "no" was going to work as its final answer.

In early June, the cable industry put together its own proposal to address the issues raised by the FCC - "Ditch the Box". While that didn't make everybody happy, it was clearly a step towards what Wheeler had laid out as goals.

With Comcast's agreement with Netflix, the cable industry is providing an example that it can and will work with over-the-top programming sources. Would Comcast had done this without the threat of Wheeler's proposal? Maybe not.

Having seen deeply stupid cable regulatory schemes in the past, from this observer's view, it looks like there is something to be said for this process this time.  Let's see how this plays out.

Update (8 July 2016): It looks like the FCC is receptive to some parts of the cable operators' proposal. The process is moving along.