Pay-TV providers would have to make video programming available to the makers of third-party devices and software under a proposal by Federal Communications Commission Chairman Tom Wheeler.

The FCC is planning for a software-based, cardless replacement for CableCard. Without needing a physical card that plugs into a third-party set-top box, consumers would be able to get TV channels on tablets, smart TVs, or set-top boxes that they can buy from other companies instead of renting a box from a cable company.

"Consumers should be able to choose how they access the Multichannel Video Programming Distributor’s (MVPDs)—cable, satellite, or telco companies—video services to which they subscribe," the FCC's summary of the proposal said. "For example, consumers should be able to have the choice of accessing programming through the MVPD-provided interface on a pay-TV set-top box or app, or through devices such as a tablet or smart TV using a competitive app or software. MVPDs and competitors should be able to differentiate themselves and compete based on the experience they offer users, including the quality of the user interface and additional features like suggested content, integration with home entertainment systems, caller ID and future innovations."

The proposal summary says the goal is to "unlock the set-top box."

As we previously reported, Comcast and other pay-TV providers wanted a far more restrictive framework that would involve cable companies building their own apps for third-party devices. Consumer advocates and device makers pushed a proposal to give third parties access to TV content and information, allowing them to build their own user interfaces that could be better than ones cable providers offer.

While Wheeler's plan hasn't been fully detailed, it appears to reject the cable companies' proposal and give consumer advocates and device makers most of what they asked for.

Customers would still have to buy TV service from a cable, telco, or satellite firm. But just as mobile broadband customers can choose from many smartphones to use on a wireless network, pay-TV customers should be able to choose what device they watch TV on, an FCC official said in a phone call with reporters. FCC officials say the software-based successor to CableCard should be more successful in giving consumers a choice.

Few choices for cable TV customers

Under the CableCard system, 99 percent of customers still rent set-top boxes directly from their providers and pay an average of $231.82 a year in rental fees, US senators found in a survey of TV providers last year. Lack of competition in the set-top box market has resulted in prices rising much faster than they do in other hardware markets, an FCC official said.

Wheeler wants TV providers to give third parties access to three main categories of information and content: information about what programming is available to consumers, including channel listings and video-on-demand; information about what a device is allowed to do with that content, such as recording; and the video content itself.

This would allow device makers or app makers to make each customer's TV programming available in new interfaces with innovative menus and comprehensive search functions. It could also help consumers avoid expensive set-top box rental fees. Potentially, devices like the Apple TV or Chromecast could provide traditional pay-TV content alongside online streaming video.

The FCC is not mandating a specific standard that pay-TV operators would have to use to make video information and content available. Instead, TV operators would be able to use "any published, transparent format that conforms to specifications set by an independent, open standards body." FCC officials chose not to require a specific standard because they expect technology will evolve, they said.

An FCC official denied a cable lobby claim that MVPDs will have to build new devices capable of distributing TV content to third-party devices in customers' homes. Cable companies also argued that open access to pay-TV content would let builders of third-party devices "rearrange, exile, or drop channels and overlay ads and drop apps and interactive elements that are parts of MVPD service."

Wheeler's proposal requires copyright protection and distribution agreements to be honored regardless of which device content is viewed on. Any device or software that presents pay-TV content must also follow rules on emergency alerts, privacy, and children's advertising restrictions, the FCC said.

FCC officials pointed out that consumers who like their existing set-top boxes can keep them and that TV providers don't have to make any changes to their own offerings. "The proposal does not change a company's ability to package and price its programming to its subscribers," the FCC said. Similarly, content distribution deals between MVPDs and programmers would not be affected by this plan. "MVPDs retain their customers and will still get a monthly fee for the subscription service that the MVPD provides," the FCC said. "The only change the FCC is proposing is to allow consumers alternative means of accessing the content they pay for."

Customers shouldn’t be “captive to bloated rental fees forever”

The FCC could vote on Wheeler's proposal next month.

The consumer advocates' proposal was more specific than Wheeler's in terms of what technologies should be supported, Public Knowledge Senior Staff Attorney John Bergmayer told Ars. But Public Knowledge is generally happy with Wheeler's proposal.

"The other side doesn't even want to have the FCC look at this issue, since their current practices are so unpopular," Bergmayer said.

US Sen. Edward Markey (D-Mass.) is also pleased. "I commend Chairman Wheeler for his proposal to help ensure that consumers are not captive to bloated rental fees forever," a Markey statement said. "Consumer choice should fuel the video box market, not cable company control. In the 21st century, consumers should be able to choose their set-top box the same way they choose their mobile phone.”

Opponents think this will violate the First Amendment somehow

Wheeler's proposal will face opposition from cable companies and advocacy groups that are sympathetic to the industry. Free State Foundation President Randolph May argued that the set-top box market is already competitive and that the FCC proposal would violate the First Amendment.

"It's clear that government prescription of navigation device content, which is what the FCC will do as it determines acceptable presentation and menu formats and the like, violates the First Amendment free speech guarantee," May claimed. "This won't likely concern the Commission, but it should concern all those who care about keeping the government from dictating speech content and who respect the First Amendment."