Fox, Disney, CBS, Time Warner, Viacom protest proposed FCC set-top box rules

FCC Chairman Tom Wheeler has proposed opening up the set-top box market to technology companies and app makers. Seven large media companies said Friday that the proposed rules would undermine the delivery of their content.
(Lauren Victoria Burke / Associated Press)

The nation’s largest media companies are banding together to protest proposed Federal Communications Commission rules designed to spur competition in the TV set-top box manufacturing market.

Walt Disney Co., CBS Corp., 21st Century Fox, A&E Television Networks, Time Warner Inc. , Scripps Networks Interactive and Viacom Inc. jointly filed comments with the FCC late Friday to lodge their opposition to the proposal.

The FCC, in February, voted three to two along party lines to begin crafting rules intended to open up the set-top-box manufacturing market with new technology standards so that third-party companies could develop devices and apps that could decode pay-TV signals.

The move was intended to loosen the grip of the pay-TV companies -- including Comcast, Time Warner Cable, Charter Communications and AT&T, which owns DirecTV -- on the set-top box market and development of TV navigational guides.


Consumers typically lease the set-top box from their pay-TV provider, and those fees can top $200 a year.

FCC Chairman Tom Wheeler, a Democrat, introduced the rules to try to give consumers more options.

But the media companies contend that the proposed FCC rules would have unintended consequences. Among other things, they say that Wheeler’s proposal, if adopted, could undermine the lucrative contracts the programmers have in place with the pay-TV companies.

Those contracts provide the financial foundation of the entertainment industry and subsidize the production of movies and TV shows.


Fox, Disney, CBS and the others are worried that the rules would enable new entrants to pick and choose what programming they made available to consumers.

The companies also worry that tech companies that entered the TV navigation market might serve up individual TV shows to consumers, such as “Empire,” “Paw Patrol” or “NCIS,” rather than an entire channel of programming. That would leave the TV industry vulnerable to the same fate as the music industry after consumers began buying individual songs rather than entire albums and CDs.

Earlier Friday, a coalition of Hollywood guilds and Motion Picture Assn. of America also filed comments in opposition to the proposed rules. President Obama a week ago voiced support for the plan unveiled by Wheeler, saying there hasn’t been much innovation and consumers are being forced to pay more than they should for set-top boxes.

However, many in the industry worry that the rules would go too far.


“The content companies are independent programmers with no economic stake in the revenues earned by distributors from leasing set-top boxes,” the seven media companies said in their filing with the FCC. 

“The content companies write not in defense of set-top boxes or leased equipment, but instead to highlight that the commission’s proposal is fundamentally flawed and therefore threatens to harm the video programming marketplace and consumers,” they said.

Friday was the deadline for comments in the matter.


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