Hollywood Raises Red Flag Over FCC's Plan for TV Set-Top Boxes

  • Studios see potential for piracy, copyright violations
  • Policy shift would make it easier for black market operators

Hollywood is raising concerns about a U.S. government proposal that would make it easier for pay-TV customers to buy their own set-top boxes, saying it would facilitate piracy.

The Federal Communications Commission voted in February to begin drafting rules that will open cable and satellite providers’ devices to competition. That would be great news for tech companies devising new ways to deliver entertainment to your living room -- and spell trouble for cable companies, which get billions of dollars from renting out the boxes that connect to TVs.

Movie makers are siding with the cable companies. The Motion Picture Association of America, the studios’ trade and lobbying group, outlined the industry’s objections in a statement Friday, saying the FCC’s proposal amounts to “taking the intellectual property of the content industry and giving it to some members of the technology industry” or “making it easier for pirate site operators to build a black market business.” The organization expressed concerns over set-top boxes that could search the Internet for video, serving up results displaying pirated programs alongside authorized content.

“We must oppose any regulation that would import the piracy problem from the Internet search world into the pay-TV world by mixing pirated content with authorized content, causing further harm to content creators and the creative economy,” the MPAA said.

According to the MPAA, the FCC proposal requires pay-TV providers to transmit to third-party device manufacturers and Internet application developers all the content that pay-TV providers license from programmers, without requiring those third parties to seek consent from the programmers or to compensate them.

“The text of the proposal falls short, treading into copyright issues over which the FCC has no authority,” the MPAA said.

Virtually all pay-TV subscribers rent their set top boxes from cable or satellite companies. The average household pays more than $200 a year in rental fees, generating almost $20 billion in revenue, according to U.S. Senators Edward J. Markey, a Massachusetts Democrat, and Democrat Richard Blumenthal of Connecticut.

Some movie studios are owned by corporations that also have large stakes in the cable industry. Universal Pictures is part of Comcast Corp., the biggest U.S. cable provider.

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