Watching Hollywood and Big Cable lobby against the FCC’s proposal to promote competition in the set-top box market, you might think their lawyers have taken a hint from their screenwriters: don’t let facts get in the way of a good story.
It’s not surprising; the facts for the cable industry are nearly as inconvenient as their abysmal consumer satisfaction scores. Senators Markey and Blumenthal found that the average consumer spends over $230 annually to rent their cable box from cable companies. That’s a toll of nearly $1,000 every four years, just to watch content you already paid for. Even though component prices for set-top box parts have been falling, the boxes themselves have been getting more expensive.
The MPAA, for example, told regulators that competitive device makers would lead to “exploitation and manipulation of content” without permission, and the cable industry’s trade association argued that they needed to limit consumers’ device choices because device manufacturers weren’t licensed to handle TV content.
Under this interpretation of copyright law, every device capable of displaying copyrighted content would have to sign a licensing agreement with every copyright holder, and consumers wouldn’t have rights to record shows, skip commercials, or customize the way their channels are displayed on their TVs. Courts have repeatedly ruled that consumers have all these rights already. But as long as cable companies monopolize the set-top box, they can impair consumers’ ability to exercise those rights. It is clear that neither you nor your TV maker need a copyright license for you to turn on the television, although Hollywood and Big Cable would certainly like to compel that.
According to the cable industry’s interpretation of copyright law, TV makers, smartphone manufacturers, and computer companies are “exploiting” the copyrighted works of others right now.
Existing copyright law already gives copyright owners a wide range of legal tools to enforce their rights if someone infringes their copyrighted work. Furthermore, as the FCC also notes, the competitive set-top boxes will have to be equipped to enable digital rights management, which protects the content from infringement. Ultimately, whether the content is viewed on the set-top box of an incumbent cable provider or a competitive device, the laws are all the same. The only difference is that in a competitive world, the laws of economics apply, too.
If cable companies’ boxes have to compete for customers, features will improve and prices will fall. This is what happened after the FCC said in the 1960s that anyone could attach a competitive telephone to their telephone line. That’s why your smartphone seems like it comes from the future, but your cable box is like something out of the past.
Set-top box competition would also mean that content creators would no longer have to go through Big Cable to get access to the box attached to your television. Instead, new and innovative video services could be seamlessly integrated with your current cable feed. The Internet has democratized content production, giving countless creators a platform to reach audiences, without having to rely on traditional gatekeepers. Film, television, and online video entertainment industries all continue to see record growth and profits, and consumers have more choice than ever. Since 2009, the number of scripted programs has nearly doubled.
Unfortunately for content creators and consumers, the set-top box ensures that cable providers remain a gatekeeper between consumers and this amazing wealth of new content. Competitive boxes would remove Big Cable from this prime gatekeeping position, and it is cable providers’ desire to protect that lucrative tollbooth to the television — not piracy fears — that is driving this copyright misinformation script.
Ed Black is President & CEO of Computer & Communications Industry Association.