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Time’s Running Out for the FCC on Set-Top Reform, Privacy and Zero-Rating

FCC Chairman Tom Wheeler’s public interest legacy hangs in the balance.

by Sam Gustin
Oct 18 2016, 3:30pm

FCC Chairman Tom Wheeler. Image: TechCrunch/Flickr

Dozens of leading public interest groups on Monday urged the Federal Communications Commission to swiftly approve new consumer protection policies aimed at promoting competition in the video marketplace, increasing online privacy, and ensuring internet openness.

In a letter to FCC Chairman Tom Wheeler and his colleagues, the groups asked the agency to take action on two of the most important issues facing US telecom regulators: Rules that would save consumers billions of dollars annually by breaking the cable industry's stranglehold on the video "set-top box" market, and tough new policies designed to protect consumers from broadband industry privacy abuses.

The public interest coalition is also urging the FCC to crack down on the controversial practice of "zero-rating," in which internet providers exempt certain online services from monthly data caps. Open internet groups say such schemes violate net neutrality, the principle that all content on the internet should be equally accessible, because they favor certain services by giving consumers an economic incentive to use them over rival offerings.

Time is of the essence, according to public interest advocates.

Time is of the essence, according to public interest advocates. "The longer these issues are delayed, the more difficult it will be for consumers to trust that they can reach the content and services of their choice," Chris Lewis, vice president at DC-based digital rights group Public Knowledge, said in a statement.

The FCC's Oct. 27 open meeting will be the last official rule-making session for the five-member agency before the Nov. 8 presidential election, which will also determine control of Congress. Regardless of who wins, the outcome of the election could jeopardize the FCC's ability to make progress on consumer issues, because it's often politically difficult to advance major policy initiatives during the "lame-duck" period before a new president and Congress are sworn in.

"Each of these issues has been discussed by policymakers for years, if not decades," the coalition wrote in the letter, which was signed by 76 groups including Public Knowledge, Free Press, the Electronic Frontier Foundation, and New America's Open Technology Institute. "Further delay would put internet users' privacy in jeopardy and undermine longstanding efforts to make internet, cable and satellite services more affordable and open."

Failure to make progress on these issues could undermine Wheeler's hard-fought legacy as a public interest champion, just months before he is expected to step down, as per FCC tradition, to honor the incoming president's prerogative to nominate his successor. But it won't be easy, because Wheeler faces vehement opposition to his agenda from corporate giants like Comcast, AT&T and Verizon, along with their political allies on Capitol Hill.

Wheeler has made reforming the $20 billion set-top box market a key priority. His plan would require cable operators to offer software "apps" allowing consumers to access content like ESPN or CNN on the device of their choice, including Android, iOS, and Amazon phones and tablets, without the need to spend an average of $231 annually to rent a clunky set-top box.

The nation's largest cable and content companies argue that Wheeler's plan would imperil their intellectual property rights and improperly insert the FCC into licensing negotiations between content studios, programmers, and video distributors. Public interest groups say that what these broadband giants really want is to maintain control over pay-TV video distribution, and their cable box rental "cash-cow," which pours billions of dollars into their corporate coffers each year.

Last month, Wheeler postponed a vote on the set-top box measure, in part because of fierce opposition from the cable industry and its political allies. Wheeler's Democratic colleague at the FCC, Jessica Rosenworcel, whose re-confirmation is currently being held up by the GOP-led Senate, has thus far refused to back his proposal, despite her previous enthusiasm for Wheeler's pro-consumer policies. (Her term is up at the end of 2016.)

These issues have been discussed by policymakers for years, if not decades.

Senate Republicans have shown little intention of reconfirming Rosenworcel for another five-year FCC term, regardless of how she votes on set-top box reform, despite the fact that her reconfirmation was part of the deal with the GOP that led to the approval of Republican FCC Commissioner Mike O'Rielly. Instead, Republicans appear to want to run out the clock on her tenure at the FCC, or at a minimum, hold her vote hostage in order to prevent Wheeler's set-top box reform plan from succeeding.

"The FCC should ignore lobbyist calls to protect their bottom lines, as they seek to shut down competition and profit from our private lives," Matt Wood, policy directory at DC-based public interest group Free Press, told Motherboard. "The commissioners must vote instead to restore the privacy rights of the most vulnerable people, and to improve the diversity of affordable video distribution options for viewers and content creators alike."

Public interest groups say that FCC action on zero-rating is particularly important as companies like AT&T, Verizon, and T-Mobile move ahead with mobile plans that exempt certain services from monthly data caps, favoring those offerings over rival services. Silicon Valley titan Facebook reportedly wants to partner with wireless carriers to offer US consumers access to its controversial "Free Basics" mobile service, in which users gain free access to a limited number of websites selected by social networking giant.

Facebook and other zero-rating advocates argue that the practice could help boost broadband adoption, but critics say such plans risk creating a "bastardized version of the internet" that disproportionately affects lower-income users who are more likely to use mobile devices to connect to the internet, and less willing to incur larger monthly fees by exceeding data limits. Open internet advocates say that because zero-rating plans undermine net neutrality, the FCC should send a strong signal of disapproval against such schemes.

A FCC spokesperson told Motherboard that the agency had received and was reviewing the coalition's letter.