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Roku’s stance speaks volumes about problems with FCC’s set-top box proposal

The Federal Communications Commission’s (FCC) plan to mandate technology standards for TV set-top boxes in the name of creating more retail competition is being opposed by an unlikely source: set-top box maker Roku.

On the face of it, the FCC’s scheme is designed to help companies like Roku. The mandate would deconstruct the video streams coming into your living room’s traditional set-top box so they could be repackaged and served to you by any company with an interest in building a set-top box.

{mosads}Roku already makes a device that streams video to televisions. The FCC’s proposal would give Roku, already an established player in the market, access to a whole new source of video programming – the consumer pay-TV packages forced open by the FCC regulation. That would seem like a powerful supplement to Roku’s current line-up of streaming video from sites like Netflix, Hulu and Crackle as well as content that lives on apps from networks like ESPN, CNN and Fox. If the FCC proposal went into effect Roku could directly stream live feeds from every broadcast and cable network.

Despite this supposed opportunity, Roku submitted a filing with the FCC opposing the scheme. In an op-ed in The Wall Street Journal Roku CEO Anthony Wood said, “This might seem like a great deal for consumers and companies like mine, but once you start peeling back the layers, the picture changes.” In its FCC filing, Roku stated, “rather than accelerate the pace and change of innovation, the FCC’s proposed rules could actually inhibit the transition from traditional programming delivery models to OTT services.”

For innovators, that’s not really a surprise; one-size-fits-all federal technology mandates always lock old ways of thinking in place and generate friction that slows new developments down.  In a business like consumer video where change is already happening at a blistering pace, that’s deadly.  One can only imagine how much the ways we find and watch video will advance and evolve in the two plus years the FCC optimistically expects it will take to implement a final rule.

And Roku is right: consumers will face even greater harm should this rule pass. “When issues arise with respect to performance or a consumer’s experience, there is far less likelihood of rapid and satisfactory resolution for consumers,” the company warned the FCC. That’s a fairly ominous rub.  If your new FCC-mandated TV box doesn’t work, whom do you call?  Your TV provider, the box maker, or the FCC?  It’s a recipe for confusion and frustration waiting to happen.  

Fundamentally, the FCC is trying to fix a market that isn’t broken. Products like Roku, AppleTV and Amazon’s Fire TV have already “unlocked” the video market and consumers have more choices and options than they know what to do with.

More than ever people are watching TV away from their living rooms which has forced the MVPDs to adjust by creating apps like the ones we are starting to see on Roku. The FCC’s new plan would erect new roadblocks in the way of this innovation, stunt competition, and ultimately hurt customers.

The FCC should stop trying to “help” where it clearly isn’t wanted or needed.


Mike Montgomery is executive director of CALinnovates, a tech advocacy coalition


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