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Will Transparency Prevail on FCC’s “Set-Top-Box” Plan

09/28/2016

By Karen Kerrigan-

UPDATE:  The FCC pulled the set-top-box vote from the September 29  agenda.  NOW they need to make the plan public so entrepreneurs, small businesses and impacted stakeholders can provide comment on it.  Small businesses, and all Americans deserve a transparent and responsive regulatory process.  The public should be allowed to provide input on the regulatory proposal.

Please weigh in today on Twitter: @FCC must lead by being transparent and inclusive on #settopbox rules. #UnlockthePlan NOW! 

On September 29, the Federal Communications Commission (FCC) plans to vote on a controversial “set-top-box” plan. A wide variety of groups, including SBE Council, have voiced strong opposition to this messy, unusual, and unneeded regulatory intrusion.

Facing bipartisan condemnation from Capitol Hill, concern from the U.S. Copyright Office, and a poorly received appearance at a Senate hearing just last week, FCC Chairman Tom Wheeler embarked on a quick rewrite of his plan to bring more “competition” to an industry that already offers abundant and innovative choices for consumers. No one outside of the FCC has seen this hastily concocted rewrite, yet commissioners are scheduled to vote on the plan on September 29!

See the Future of TV Coalition’s recent blog post: More Questions Than Answers as Final Vote Nears on Chairman Wheeler’s Still Secret Plan.

Alarmed about the secretive rewrite and rush to vote on the plan, 64 House Democrats wrote to FCC Chairman Wheeler on September 22, urging that he open the process and allow for public comment. Still, the vote will go on and the plan remains under lock and key.

The Least Transparent Federal Agency?

Yes, it is ironic that an agency charged with federal “communications” policy is one of the least transparent in Washington. Unfortunately, this is how the FCC rolls under Chairman Tom Wheeler’s leadership. As you may recall, the commission voted on the massive “open Internet” plan without allowing the public to view or comment on that controversial proposal either.

As background on the “set-top-box” effort, the FCC decided to step in to the competitive video marketplace with a plan to mandate that pay TV providers and content providers offer their products and services to any box maker. But there are serious problems with this proposal, as I pointed out in comments to the FCC back in April 2016. And as noted above, the U.S. Copyright Office expressed concerns, as did the SBA Office of Advocacy regarding the impact on small businesses in the industry.

Unfortunately, the FCC provided no meaningful opportunity for small businesses to provide input prior to the release of the originally proposed plan (and, of course, on the new plan.)

With respect to its initial foray, as noted by the SBA Office of Advocacy in comments, “The FCC has not adequately attempted to quantify or describe the economic impact of its proposed rules on small entities,” which means FCC regulators ignored their legal responsibilities under the Regulatory Flexibility Act. The Act requires federal agencies to review their regulations for impact on small businesses and consider less burdensome alternatives.

Will Common Sense and Respect for Transparency Prevail?

So the FCC will soon vote on an undisclosed version of a plan that could have widespread and negative implications for entrepreneurs, innovators and small businesses in this important U.S. industry.

To be clear, the set-top box proposal is an unwarranted regulatory intrusion that offers no real benefit to consumers. This curious proposal undermines innovative activity, investment and IP rights. Entrepreneurs would lose control over how their content is presented, resulting in diminished placement, exposure and revenues.

Let’s hope a majority of FCC Commissioners understands this vast impact, as well as the need for regulators to be more transparent, inclusive and thoughtful in the rulemaking process.

Related Resources from SBE Council:

FCC Goes from Bad to Bad on “Revised” Set-Top-Box Proposal

FCC Proposal Undermines Intellectual Property Rights

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council