Suite 800 1919 Pennsylvania Ave. NW Washington, D.C. 20006-3401
Paul Glist 202-973-4220 202-973-4475 fax [email protected]
August 19, 2016
Ms. Marlene H. Dortch Secretary, Federal Communications Commission 445 12th Street S.W. Washington, DC 20554
Re: Expanding Consumers’ Video Navigation Choices, MB Docket No. 16-42, Commercial Availability of Navigation Devices, CS Docket No. 97-80
Dear Ms. Dortch:
The National Cable & Telecommunications Association (NCTA) hereby submits this response to recent ex parte notices filed in the above-captioned proceedings by critics who would rather that MVPD services and programmer content not be protected by MVPD apps and licenses but instead be more readily exposed to their own commercial exploitation and monetization.1
The ex partes misstate and then profess to critique the HTML5 apps approach proposed by diverse independent programmers and multichannel video programming distributors (MVPDs) on June 15, 2016 as an alternative means for making MVPD services available to
1 Such ex partes have been submitted by Public Knowledge, the Computer & Communications Industry Association (CCIA), INCOMPAS, Hauppauge Computer Works, Amazon, the Electronic Frontier Foundation and TiVo. See Letter from John Bergmayer, Public Knowledge, to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (July 20, 2016) (“Public Knowledge July 20, 2016 Ex Parte”); Letter from John Bergmayer, Public Knowledge, to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (July 29, 2016) (“Public Knowledge July 29, 2016 Ex Parte”); Letter from John A. Howes, Jr., Computer & Communications Industry Association (CCIA), to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (July 28, 2016) (“CCIA July 28 Ex Parte”); Letter from Christopher L. Shipley, INCOMPAS, to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 2, 2016) (“INCOMPAS August 2, 2016 Ex Parte”); Letter from Robert S. Schwartz, Hauppauge Computer Works, Inc., to Marlene H. Dortch, FCC, MB Docket. No. 15-64, CS Docket No. 97-80 (August 3, 2016) (“Hauppauge August 3, 2016 Ex Parte”); Letter from Gerard J. Waldron, Amazon.com, to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (July, 15 2016) (“Amazon July 15, 2016 Ex Parte”); Letter from Gerard J. Waldron, Amazon.com, to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 4, 2016) (“Amazon August 4, 2016 Ex Parte”); Letter from Ernesto Falcon, Electronic Frontier Foundation (EFF), to Marlene H. Dortch, MB Docket No. 16-42, CS Docket No. 97-80 (August 2, 2016) (“EFF August 2, 2016 Ex Parte”); Letter from Devendra T. Kumar, TiVo Inc., to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 8, 2016) (“TiVo August 8, 2016 Ex Parte”). CCIA’s August 18, 2016 ex parte submitting its “Unlock the Box” paper reiterates the same misstatements and erroneous claims as these earlier ex partes. This response also addresses an ex parte recently submitted by Roku. Letter from Trey Hanbury, Roku, Inc., to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 5, 2016) (“Roku August 5, 2016 Ex Parte”). Ms. Marlene H. Dortch August 19, 2016 Page 2
retail navigation devices.2 These critics continue to propose complex technology regulations designed to meet their goal of converting copyrighted content into open-source programming for their own commercial use and monetization. Their recommendations would undermine copyright as thoroughly explained by the U.S. Copyright Office,3 violate consumer video privacy, and impose staggering costs on consumers, networks, program diversity, and innovation.4
Programmers have explained that the MVPD services that include their licensed content must be protected by MVPD apps and MVPD licenses. As CBS explained, using MVPD apps “would help ensure that our valuable content and services remain inside of, and under the control of, MVPDs with whom we have a direct contractual relationship for the distribution of our product.” 5 Likewise, Fox seeks to “ensure that all of Fox’s and other programmers’ valuable content would remain inside of, and under the control of, apps developed exclusively by multichannel video programming distributors (MVPDs) with whom programmers have a direct contractual relationship.”6 Both explained that any retail device must execute a license under the control of the MVPD and drafted exclusively by MVPDs and programmers. As CBS puts it, “it is critical that any license that a third party need execute to host an app be one that has been drafted exclusively by MVPDs and programmers, as it is our services and content that is being licensed.”7 It further explained its “support for the approach that provides that programming at all times remain inside of an MVPD-controlled app and that honors the sanctity of our contracts and content rights.”8 Fox explained that “a rule construct in which programming at all times remains inside of an MVPD-controlled app … was the only way of ensuring that the security of content is not jeopardized.”9 CBS explained that this apps-based approach “would also mean that third-party
2 Letter from Vme TV, Revolt TV, TV One, AT&T-DIRECTV, Comcast, and NCTA to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (June 16, 2016). 3 Letter from Maria A. Pallante, United States Register of Copyrights and Director, United States Copyright Office, to Rep. Marsha Blackburn, Vice Chairman, Rep. G.K. Butterfield, Energy and Commerce Committee, and Rep. Doug Collins and Rep. Ted Deutch (August 3, 2016), available at http://blackburn.house.gov/uploadedfiles/co_set- top_letter.pdf (“Copyright Office August 3, 2016 Letter to Congress”). 4 See NCTA Comments at 41-59, 75-118, 129-141; NCTA Reply Comments at 9-20, 49-50; NCTA Rebuttal Comments at 6-29. 5 Letter from Anne Lucey, CBS Corporation, to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 12, 2016) at 1 (“CBS August 12, 2016 Ex Parte”). 6 See Letter from Jared S. Sher, Senior Vice President and Associate General Counsel, 21st Century Fox, Inc., to Marlene H. Dortch, Secretary, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 8, 2016) at 1 (“Fox August 8, 2016 Ex Parte”). 7 CBS August 12, 2016 Ex Parte at 2. 8 CBS August 12, 2016 Ex Parte at 2. 9 Fox August 8, 2016 Ex Parte at 1.
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devices and platforms would have to honor and abide by all the terms and conditions set forth in programmers’ agreements with MVPDs.”10
The HTML5 apps solution provides a straightforward, practical and achievable means for providing consumers with choices in navigation devices while protecting the rights of copyright owners, the privacy rights of consumers, and the ability of all participants to innovate. The HTML5 apps-based proposal – if adopted by the Commission – would impose an industry-wide obligation on all large MVPDs to use the W3C’s open international standard HTML5 platform to develop and deploy video “apps” on smart TVs, video devices and other customer-owned navigation devices. It would allow customers to search for video content from both multichannel and online streaming services through their retail devices’ integrated search interfaces in ways that are consistent with program licensing agreements between content providers and MVPDs. It would allow any retail device manufacturer that includes HTML5 to receive the multichannel services offered and provided by all of the largest MVPDs, even if the device did not support the MVPD native apps currently in wide use on popular platforms such as Android, iOS and Roku. In its NPRM, the Commission sought to go beyond native apps. Rather than requiring manufacturers to “build a single device that is compatible with all of the approaches” used by different native apps, it sought a solution that would allow a manufacturer to build to a common standard that would “allow consumers to use the same device with different MVPDs throughout the country.”11 The HTML5 app solution meets that goal by offering a common-denominator app enabling any manufacturer to build a nationally portable device that can receive service from all of the large MVPDs, while continuing to support the market for business-to-business agreements and native apps.
Because the HTML5 apps solution is based on actual technology directions and the most recent global open standards, the largest MVPDs are able to offer a commitment to bring it to market within two years. And because the HTML5 proposal is sensitive to the needs of smaller operators facing different technical, operating, and financial circumstances, the proposal would include at least the same exemption for operators with fewer than one million subs that TiVo proposed for smaller operators.12
10 CBS August 12, 2016 Ex Parte at 1. Time Warner, Inc. has likewise opposed any “framework [that] would require MVPDs to disassemble their service into flows of data to third parties, thereby effectively creating a compulsory license to third parties that would create a significant risk that the terms on which the content was licensed to MVPDs would not be protected.” Letter from Kyle Dixon, Time Warner, Inc., to Marlene H. Dortch, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (June 30, 2016). 11 NPRM at ¶¶31, 48. 12 The exemption would moot the concerns expressed by ACA, ITTA and NTCA and permit them to devote their limited resources to other pressing needs without any adverse impact on development of a retail market for navigation devices. Even with this exemption, the HTML5 proposal would be a dramatic increase in consumer choice, covering 94% of the market, far above the less than 50% of MVPD customers who are able to purchase CableCARD retail devices today.
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I. THE CRITICS MISREPRESENT A STRAIGHTFORWARD, PRACTICAL AND ACHIEVABLE MEANS TO PROVIDE CHOICE WHILE PROTECTING COPYRIGHT, PRIVACY, AND INNOVATION
In their zeal to resist any approach that does not disaggregate the MVPD service, each of the critics has misrepresented the HTML5 apps-based approach as complex and unworkable. They exhibit or feign complete misunderstanding of what the HTML5 apps proposal offers.
A. HTML5 is Widely Endorsed
Hauppauge, for example, asserts that the HTML5 proposal is “prohibitively complex” and an “engineering nightmare.”13 INCOMPAS claims that no devices support HTML5.14 In reality, the HTML5 app solution is simple. It is based upon a straightforward implementation of actual global open standards for commercial video widely embraced by TV standards bodies (including as part of ATSC 3.0), manufacturers and service providers.15 PCs, gaming consoles, and mobile devices have been quickly adopting HTML5. Most smart TVs and devices with modern browsers or browser elements support HTML5. Indeed, Google has announced that HTML5 will be the default standard for its Chrome browsers.16
Further endorsement of the HTML5 approach was evident at the 2016 Consumer Electronics Show (CES). At CES 2016, the Consumer Technology Association (formerly CEA), device manufacturers, distributors, content providers and security companies from across the worldwide video ecosystem jointly launched the Web Application Video Ecosystem (WAVE). WAVE is using HTML5 with streaming media standards to assure “a playback environment that is consistent, reliable, and high performance, on TVs, phones, tablets, media players, gaming systems, [and] laptops.”17 This is why the HTML5 apps proposal is achievable within the two- year commitment period offered by the MVPD proponents, unlike the ever-changing unbundling proposals which would take years to develop if they could be implemented at all.18 An early cable adopter, Comcast, has announced the availability of an HTML5 app as part of the Xfinity TV Partner program and is now developing the app for deployment on Samsung Smart TVs.
13 Hauppauge August 3, 2016 Ex Parte at 6. 14 Hauppauge August 3, 2016 Ex Parte at 3; INCOMPAS August 2, 2016 Ex Parte at 4. 15 NCTA & AT&T Response to Questions About Open Standards HTML5 Apps-Based Approach (July 21, 2016) at 3-8 (“NCTA & AT&T Response to Questions”). 16 Emil Protalinski, Google targets HTML5 default for Chrome instead of Flash in Q4 2016, VENTUREBEAT (May 15, 2016), http://venturebeat.com/2016/05/15/google-targets-html5-default-for-chrome-instead-of-flash-in-q4-2016/. 17 Troy Dreir, CES ‘16: The GIVE Project Aims to Push HTML5 Video Forward, STREAMING MEDIA (Jan. 7, 2016), http://www.streamingmedia.com/Articles/Editorial/Featured-Articles/CES-16-The-GIVE-Project-Aims-to- PushHTML5-Video-Forward-108444.aspx. 18 See NCTA Rebuttal Comments at 29-32; Ralph W. Brown, A Technical Analysis of the Multiple “Competitive Navigation” Proposals, attached to NCTA Reply Comments as Appendix A (“Brown, Technical Analysis”).
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B. HTML5 Has Evolved Since its Early Days Cited by Critics
The critics seek to portray HTML5 apps as “not ideal” and inferior to native apps by recalling ancient history from four or five years ago – well before W3C extended the standards for commercial video and before it was widely adopted for streaming media. They claim that Netflix and Facebook “abandoned” HTML5 back then.19 In 2013, browsers did not support HTML5, so Netflix had tried to pack a full WebKit browser into its app. Facebook had a similar experience and, like MVPDs and many other app developers, focused on writing native apps for popular platforms like iOS and Android. But that is indeed ancient history.
HTML5 has hardly been abandoned: through cooperative global effort from stakeholders including Netflix and Facebook, it has been upgraded to resolve those concerns. The Media Source Extensions (MSE), Encrypted Media Extensions (EME), and other standards that MVPDs have described were created and optimized for smart TV and other content streaming device platforms. HTML5, EME, MSE and WebCrypto are being deployed across the Web today by multiple vendors on hundreds of millions of devices, including mobile, PCs, TVs, set- tops and game machines. HTML5 is supported today by all major browsers (both on PCs and embedded devices) including Apple Safari, Google Chrome, Microsoft Edge, Mozilla Firefox and Opera. All major web browsers are implementing MSE, EME, and WebCrypto to support video content. Netflix is the co-author of the EME, MSE and Web Crypto HTML5 specs,20 is participating in HTML5 API Task Force of WAVE, and has been leading the industry switch to HTML5 video on the desktop as soon as HTML5 browsers have become available on the desktop.21 Facebook and others across the globe are now embracing HTML5 as modern browsers have evolved.22
19 See INCOMPAS August 2, 2016 Ex Parte at 4; Public Knowledge July 29, 2016 Ex Parte at 1. 20 See Anthony Park & Mark Watson, HTML5 Video at Netflix, THE NETFLIX TECH BLOG (Apr. 15, 2013), http://techblog.netflix.com/2013/04/html5-video-at-netflix.html. Mark Watson of Netflix is an editor on the W3C EME specification. See Encrypted Media Extensions W3C Candidate Recommendation 05 July 16, W3C (Jul. 5, 2015), https://www.w3.org/TR/encrypted-media/. 21 See, e.g., Anthony Park & Mark Watson, HTML5 Video at Netflix, THE NETFLIX TECH BLOG (Apr. 15, 2013), http://techblog.netflix.com/2013/04/html5-video-at-netflix.html (discussing “progress we've made towards our goal of moving to HTML5 video”); Anthony Park & Mark Watson, HTML5 Video in Safari on OS X Yosemite, THE NETFLIX TECH BLOG (Jun. 3, 2014), http://techblog.netflix.com/2014/06/html5-video-in-safari-on-os-x- yosemite.html (explaining that, “[w]ith the OS X Yosemite Beta on a modern Mac, you can visit Netflix.com today in Safari and watch your favorite movies and TV shows using HTML5 video without the need to install any plugins”); Matt Trunnell, HTML5 Video Is Now Supported in Firefox, THE NETFLIX TECH BLOG (Dec. 17, 2015), http://techblog.netflix.com/2015/12/html5-video-is-now-supported-in-firefox.html (announcing the availability of Netflix’s HTML5 video player in Firefox and explaining that “our HTML5 player support now extends to the latest versions of all major browsers, including Firefox, IE, Edge, Safari, and Chrome”). 22 If Roku is exhibiting fear that HTML5 apps will be successful, this should be recognized as further endorsement of the strength of the apps proposal, not as a deficiency.
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C. Consumers Have Widely Adopted Apps for Receiving Services
Hauppauge incorrectly contends that retail devices that host apps “would not be acceptable to consumers.”23 On the contrary, apps are enormously popular with, and familiar to, consumers. Millions of consumers use video and other apps every day on their smartphones, Rokus and other devices. MVPD apps are available on more than 460 million devices already purchased by consumers, and year-over-year viewing via MVPD apps more than doubled in 2015, with 40% of MVPD subscribers using “apps” to view their subscription content.24
D. HTML5 Apps Support Full-Resolution Video
INCOMPAS questions whether the HTML 5 apps would “provide content at the same quality level or resolution as that provided to a leased navigation device.”25 There is no reason for such doubt. One of the key features of the EME extension is to adapt the bitrate to the resolution capability of the receiving device. The MVPD apps would deliver the best resolution a device is technically capable of supporting, 26 including standard definition, high definition, 4K (UHD), and high-dynamic range (HDR) imaging.27
E. HTML5 Apps Fully Support Integrated Search
Critics make a number of unfounded criticisms of the integrated search elements of the HTML5 proposal. 28 The proposal includes an unprecedented commitment by MVPDs to support integrated search of MVPD and OVD content on retail devices.29 The HTML5 apps proposal enables device manufacturers to use their search algorithms to retrieve search results from MVPDs. Device manufacturers could design search, for example, by title, actor, genre and more, limited only by the imagination of the device manufacturer, its willingness to license commercially-available metadata, and its investment in its own search algorithms. Contrary to critics’ claims, CableCARD today does not provide this commercial metadata to retail devices.30
23 Hauppauge August 3, 2016 Ex Parte at 2. 24 NCTA Comments at 12. 25 INCOMPAS August 2 Ex Parte at 3. 26 This includes meeting content protection requirements specific to that resolution of content. 27 HTML5 also supports a hardware root of trust required for UHD. See NCTA & AT&T Response to Questions at 8. Amazon is incorrect in claiming otherwise. See Amazon August 4, 2016 Ex Parte at 2. 28 E.g., INCOMPAS August 2, 2016 Ex Parte at 2; Hauppauge August 3, 2016 Ex Parte at 2. 29 Proponents of the HTML5 apps-based approach do not believe that integrated search is required by Section 629, but have nonetheless offered a commitment that would be supportive of integrated search that includes MVPD content. For this reason alone, TiVo is wrong in asserting that the HTML5 apps solution is “functionally the same proprietary app proposal presented as part of the DSTAC process …, with the only meaningful difference being that large MVPDs would be required to provide apps rather than simply doing so on a voluntary basis.” See TiVo August 8, 2016 Ex Parte at 2. 30 E.g., CCIA July 28, 2016 Ex Parte at 2-3; Hauppauge August 3, 2016 Ex Parte at 2-3; INCOMPAS August 2, 2016 Ex Parte at 2. As reported in DSTAC, “Under the applicable MOU, license and FCC rules, UDCPs only
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Commercial providers like Gracenote, Rovi, IMDB, Rotten Tomatoes and others license the use of such metadata to MVPDs and to device manufacturers.
MVPDs have committed to support integrated search under the HTML5 apps approach. There is no uniform, standard set of metadata or program ID that all MVPDs (or commercial data providers) follow; nor are MVPDs able to provide such programming metadata to device manufacturers, because MVPDs themselves have only limited licenses to use the data.31 Each MVPD would instead provide a way to link between the device search and each MVPD’s video content. Contrary to the spurious claims by critics,32 MVPDs have repeatedly explained that they will support integrated search for both VOD and linear.33 In one approach, an MVPD could respond to a search request for a specific program with the program name and a clickable link (or URL) that would appear in a device’s search box. In another approach, the device manufacturer would directly search its own licensed content metadata and combine it with the channel numbers and channel IDs provided by the MVPD. For example, a device could have extensive information on title, actor and genre from commercial sources. It could support a direct search for “Breaking Bad” or for “Bryan Cranston,” which it would translate into “Breaking Bad” and other titles. It could then retrieve results from MVPD linear and VOD assets, as well as from the Netflix, Amazon and Hulu apps if those providers agree to integrated search. And the search results will include a link: the NCTA/AT&T detailed description specifically said that a link would be provided and that the consumer could click and go to a landing page in the MVPD app that presents the options offered by the app for the corresponding video asset consistent with programming agreements.34
Search returns would link to a landing page inside the MVPD’s app that offers consumers different VOD and SVOD options. There are similar options even for today’s linear channels: the consumer may have the options to tune to a show in progress, to start over from the beginning, to look back at prior episodes, or to review when it is showing at future times. Consumers benefit from seeing these choices. These choices cannot be expressed through a
receive a virtual channel map and channel name, and only from cable operators.” DSTAC WG4 Report at 160. UDCPs license metadata like program name and air time from the same providers that MVPDs do. Likewise, while Rokus provide one way to operate integrated search, Roku does not require “all” or “most” of the MVPD’s catalog information as claimed by INCOMPAS. INCOMPAS August 2, 2016 Ex Parte at 2. The majority of the Roku schema fields are optional. See Roku Search, ROKU, https://sdkdocs.roku.com/display/sdkdoc/Roku+Search. 31 See NCTA Comments at 53-54; NCTA Reply Comments at 39-40; Gracenote Comments at 13 (“Gracenote licenses its metadata service to MVPDs, online video providers, digital media outlets, and third-party device manufacturers directly.”) 32TiVo August 8, 2016 Ex Parte at 5. 33 NCTA & AT&T Response to Questions at 18-20. 34 NCTA & AT&T Response to Questions at 19-20.
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standardized interface,35 but the landing page can present the options that each MVPD has available.
Proponents of information flows nonetheless call for direct tuning into naked streams, and deride the use of a “landing page” as “sub-par.”36 However, using landing pages inside apps may be required to meet programming agreements and is commonplace today. A programming agreement, for example, may require prominent display of the network brand for a particular program before the program commences, or pre-roll of a promotional video before the main video begins. Netflix, Amazon and other OVD apps use landing pages today. YouTube chose to remove the API that once permitted DIRECTV and other third parties to deep link to and play YouTube content outside of the YouTube experience. In June, 2016, Instagram shut down the public APIs that allowed its photo streams to be presented through third-party apps and user interfaces. Roku accommodates landing pages into its search feature, explaining that “[e]ach item, when selected by the user, will ‘deep link’ into the content provider VOD channel. The link could be to a content provider movie details screen, TV season episode list screen, or TV episode details screen, or other screen, depending on the content selected, the content provider, and whether the user has installed the content provider VOD channel.”37 The proposal to provide content flows of naked streams in progress removes all such screens, removes the MVPD’s UI that is part of MVPD and cable service, and would deny consumers their many choices. It would also defeat important requirements relating to the presentation of content that are central to the copyright licenses content owners grant to MVPDs.
Critics contend that consumers would be “frustrated” if they were presented with search results for content for which they do not have a subscription or “entitlement,” and that MVPDs should turn over customer entitlement data to device manufacturers.38 But search results should not be limited to previously purchased content. By definition, transactional VOD is not yet entitled, but it must show up to present consumers with the choice to buy the VOD. Purchase and promotion alternatives for VOD and linear content vary with MVPD and then-current marketing. The consumer may have the choice to rent, buy, preview for free, or receive a discount based on previous purchases with that MVPD. Similar choices abound with linear channels and the SVOD that is often paired with a linear subscription. Even if the subscriber has not subscribed to that channel or tier, the MVPD may be offering a free preview; upgrading to SVOD may be a better choice than buying each title by the one; or the subscriber may be eligible for an upgrade discount based on other transactions they have had with the MVPD. Using the interactivity enabled through the app (but not supported by the information flow approach), the
35 There is no uniform or fixed MVPD entitlement language that could communicate all variations to a device. Trying to standardize the delivery of entitlements would require significant changes to MVPDs’ networks and freeze innovation. NCTA Reply Comments at 110; Sidney Skjei, A Technical Analysis of the FCC’s Navigation Device Proposal, attached to NCTA Comments as Appendix B, at 31 (“Skjei, Technical White Paper”). 36 Public Knowledge July 29, 2016 Ex Parte at 2. 37 Roku Search, ROKU, https://sdkdocs.roku.com/display/sdkdoc/Roku+Search. 38 See TiVo August 8, 2016 Ex Parte at 5; CCIA July 28, 2016 Ex Parte at 3; Amazon August 4, 2016 Ex Parte at 2; Hauppauge August 3, 2016 Ex Parte at 3-4.
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consumer could take an opportunity to upgrade on-screen with a click. Cable services today show channels in guides that require additional subscriptions, such as premium movie channels or sports nets. This is not a “frustrating” experience – it is everyday operation of search and apps and commonplace for search of online content today. 39 It would be more frustrating for the customer to be denied access to offers to which they would normally be entitled. A consumer would have the same experience if her universal search reported an online video source to which she did not yet subscribe; or if she were a subscriber to the “basic” level of any online service that also reports content available with an upgrade to a higher level of service.40 None of them are suppressing offers or warning consumers away from upgrading.
As discussed above, there are multiple ways to implement integrated search, and integrated search is developing now, organically in the market. The two-year development period will allow the market to explore the various alternatives to determine the preferred approach.
F. HTML5 Apps Do Not Replace Native Apps
Hauppauge suggests that MVPDs intend to serve only HTML5 platforms or replace their iOS or Android apps with HTML5.41 That is incorrect. HTML5 proponents have made clear that the HTML5 app would provide device makers with a “common denominator” app option for their platforms, not supplant native apps in the marketplace One of the explicit purposes of the HTML5 app proposal is to support the availability of apps through HTML5 despite the many variations in device OS and hardware.42 Ironically, some of the unbundling proponents now argue that the Commission should not rely on HTML5 apps because the very native apps which they have disparaged in Congress and in DSTAC are now somehow “ideal.”43 Nothing in the proposal restricts MVPDs to only HTML5 apps or restricts any devices to HTML5. In fact, the HTML5 proposal explicitly contemplates the continued use of other native apps and welcomes other B2B arrangements.44 The proposal does not replace iOS, Android or Roku apps, or preclude the development of other apps for new platforms. Indeed, Comcast, which recently
39 Roku, for example, shows results for apps, regardless of whether the user is a subscriber of that service. See https://sdkdocs.roku.com/display/sdkdoc/Roku+Search. 40 For example, Sling TV offers “Orange” as basic and “Blue” as the upgrade. Sony Vue offers “Slim” as basic and Core and Elite as tiers. Amazon offers some video “included with your Prime membership,” but simultaneously offers more titles to rent or buy, plus add-on subscriptions for movies and TV. Netflix sells Basic for one screen in SD, Standard for two screens in HD, and Premium for 4 screens in HD and UHD, all at graduated prices. Google has developed YouTube Red as a premium tier above YouTube. 41 Hauppauge August 3, 2016 Ex Parte at 3 (“The NCTA proposal seems built on assumptions that all App Alternative implementations would occur on a common platform such as iOS or Android, yet neither of these platforms directly supports HTML5 apps that are not embedded within a native app.”). 42 NCTA & AT&T Response to Questions at 4. 43 INCOMPAS August 2, 2016 Ex Parte at 4. INCOMPAS even “encouraged the Commission to require MVPDs to adopt and develop native apps.” INCOMPAS August 2, 2016 Ex Parte at 4. 44 NCTA & AT&T Response to Questions at 30-31.
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announced its HTML5 apps-based Xfinity TV Partner Program, also announced an agreement with Roku to develop an app specifically designed for Roku TVs and streaming players, which do not support HTML5. INCOMPAS is therefore completely mistaken in claiming that “older devices—which may lack compatibility with updated HTML5 standards—may suffer a significant drop-off in performance and cause pay-TV consumers serious disruption.”45 There is no cause for concern that HTML5 will displace native apps or any other approaches. Business- to-business deals, native apps, and CableCARD support would all continue. The launch of HTML5 apps does nothing to eliminate native apps.46
G. HTML5 Apps Do Not Require a Manufacturer to Offer an Apps Store
Hauppauge complains that the HTML proposal would not be available without an app store, which it says its current CableCARD devices do not have.47 MVPDs contemplate use of an app store as a delivery vehicle because that is the method used by Smart TVs, Android Markets, Google Play, Apple iTunes, and popular platforms today, and such app stores offer a convenience to consumers. But the proposal does not require a manufacturer to offer an apps store. If a device does not support an apps store, the manufacturer can point the user to an MVPD’s link (or URL), or equip the device with a list or interface to navigate to the appropriate MVPD HTML5 apps.
H. HTML5 Supports App Updates
INCOMPAS claims to find fault with a standard and beneficial feature of apps: that the service provider may update the app in order to reflect new features, new network configurations, and to fix bugs, all of which ultimately benefit consumers.48 Although INCOMPAS warns against updates, Amazon Prime, Netflix and every other site regularly updates its app and users remain able to browse and enjoy the updated sites. HTML5 EME would likewise be used in the same way before and after an MVPD updated its app to reflect new features, new offerings, or new network configurations. INCOMPAS has identified no incompatibility problems with the ordinary operation of HTML5.
45 INCOMPAS August 2, 2016 Ex Parte at 4. 46 As for Roku’s suggestion that authentication of TVE apps should be streamlined, some MVPDs and programmers are currently involved in CTAM, an industry consortium which has established at least one approach that can support automatic authentication for Programmer TVE apps when those apps are used at the customer’s premise. CTAM, Industry Collaborative Announces Universal TV Everywhere Sign-In Solution, https://www.ctam.com/About/news/Pages/Universal-TV-Everywhere-Sign-In-Solution.aspx. Other operators may pursue other approaches to the same end. 47 Hauppauge August 3, 2016 Ex Parte at 3 (“The App Alternative also seems not to anticipate implementations on specialized platforms (such as Hauppauge’s current CableCARD TV receivers) for which no “app store” framework exists.”). 48 INCOMPAS August 2, 2016 Ex Parte at 4 (“While HTML5 app updates are controlled by the app developer (here, MVPDs), control over updates to native apps is held by the user, who can make the ultimate determination about the impact an update might cause to her consumer electronics.”)
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I. HTML5 Apps Do Not Create Technical Conflicts At Home
Hauppauge and INCOMPAS also invent home technology problems out of thin air. Hauppauge takes the case of a consumer who subscribes to video from one provider and ISP service from another, and says that delivering managed IP cable channels “would be beyond the capability of almost all consumers and would be challenging even for engineers trained in this area.”49 INCOMPAS imagines that one modem in the house connecting to an ISP and a second modem in the house receiving the managed IP channels would create an insurmountable problem.50 There is nothing in the proposal that would even imply this complexity. The ISP is the only provider presenting a WAN for Internet access. The cable modem is only the provider of access to the cable video service and does not provide Internet access. There are no insurmountable technical support problems that the critics imagine.51 Cable ISPs routinely load firmware into leased and retail residential modems today. It is a security requirement in DOCSIS. They can use the same process to configure a modem under the HTML5 proposal.
Hauppauge also claims to be concerned about the viability of the HTML5 app solution for a “cabin in the woods” that lacks Internet connectivity.52 If the cabin receives video from a cable operator but not Internet service, the cable HTML5 app on the retail device would still provide the MVPD service to the cabin over managed IP channels, not over the Internet.53 The retail device would operate like any other unconnected CE device today.
Nor is there cause for the critics’ supposed concern over continuing technical support from MVPDs for HTML5 apps used by third party devices.54 The HTML5 apps-based proposal commits to a five-year initial term, which should moot concerns. In fact, such concerns are ill founded regardless of that explicit commitment.55
J. HTML5 Apps Provide a Full Set-Top Box Substitute
The critics manufacture concerns that the app will not provide the same programming as a set-top box56 because we have said that MVPDs can only provide the programming pursuant to
49 Hauppauge August 3, 2016 Ex Parte at 7. 50 INCOMPAS August 2, 2016 Ex Parte at 3-4. 51 Hauppauge August 3, 2016 Ex Parte at 7; CCIA July 28, 2016 Ex Parte at 3-4. 52 Hauppauge August 3, 2016 Ex Parte at 7. 53 NCTA & AT&T Response to Questions at 13-14. 54 CCIA Comments at 11-13. 55 Few sunsets have occurred as a normal part of apps. In 2015, Microsoft terminated support for the Media Center PC, for which the CableCARD OCUR was designed. In 2015, Google sunset YouTube apps on older devices. A few MVPD non-HTML5 apps have also sunset, but MVPDs have demonstrated a commitment to expanding the reach of apps that appeal to a significant number of their customers, and new platforms rise, like HTML5. See DSTAC Final Report at 283, 297 (DSTAC WG4 at 148, 162); NCTA Reply Comments at 53-54, n. 167. 56 See, e.g., TiVo August 8, 2016 Ex Parte at 3; CCIA July 28, 2016 Ex Parte at 2-3; INCOMPAS August 2, 2016 Ex Parte at 3.
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the rights they have from programmers. But MVPDs have repeatedly committed that the apps would include the full suite of the MVPD’s linear and on-demand programming the MVPD has the rights to include, as well as the MVPD’s interface and guide.57 When we say in our proposal that we will provide content to the extent we have the rights to do so from programmers, that reflects MVPD’s respect for the content licensing process, and is not a hedge to shortchange the HTML5 app. In fact, MVPDs have every incentive to provide their fullest and best service to all devices, rights permitting, to compete with other video services on those platforms.58 Moreover, the need for such rights is not unique to the HTML5 approach, but the HTML5 apps approach provides the best means for providing the requisite assurances and technological protection measures to secure those rights. Indeed, MVPD apps safeguard copyright, advertising, privacy, children’s programming, accessibility and other consumer protections that come with their MVPD subscriptions because they maintain an MVPD’s end-to-end control – as required by programmers59 – to present its service in the trusted application execution environment within the app that runs on the smart TV or other retail device.
The critics’ also feign worries that that “the user experience” in the HTML5 app might be “limited” or that the MVPD “will not keep the app up to date compared to their own devices.”60 Their sudden and unfounded concerns in this regard are ironic, at best, given that over the past 18 months they have been pressing for an unbundling that would strip out all copyright licensing requirements, interactivity, modern features, privacy and consumer protections from MVPD service. The critics are merely attempting to discredit any apps-based approach that would protect the integrity of the MVPD service.
K. Cost of Implementation
Public Knowledge and Hauppauge try to suggest that the HTML5 apps approach would be more expensive than the NPRM’s proposal, but these suggestions have no factual foundation. Having no facts of their own about costs, they have misconstrued a statement by ACA describing its understanding of the resources that large MVPDs would be committing to HTML5 apps. In response, ACA has clarified that its statement was addressing the commitment of the large MVPDs to apps, and that it “is incorrect to suggest that ACA’s comments regarding the ‘App’ proposal either support adoption of the Commission’s proposal, provide evidence that it is an overall better approach than the ‘App’ proposal for MVPDs, or that ACA was commenting in any respect on apps-based approaches generally.”61
57 NCTA Rebuttal Comments at 34. 58 NCTA Comments at 11-14, 16-17; NCTA Reply Comments at 56-57. 59 See, e.g., Fox August 8, 2016 Ex Parte; CBS August 12, 2016 Ex Parte. 60 INCOMPAS August 2, 2016 Ex Parte at 3; CCIA July 28 Ex Parte at 2, 4. 61 See Letter from Thomas Cohen, Counsel for the American Cable Association, to Marlene H. Dortch, Secretary, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (August 12, 2016) at 2 (refuting suggestions that ACA’s comments on the “App” proposal “support adoption of the Commission’s proposal, provide evidence that it is an
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NCTA has previously outlined the staggering cost to consumers, networks, program diversity, privacy, and innovation of the information flow approach.62 The apps approach is a major undertaking to deliver consumer choice without these costs. And it explicitly supports an exemption for small operators, who would then have a cost of zero.
II. PROPOSALS TO REMOVE OR DILUTE THE APP AND REMOVE THE MVPD LICENSE SUFFER THE SAME DEFICIENCIES AS THE NPRM PROPOSAL
Some of the critics continue to urge the Commission to adopt their proposed alternative by removing or diluting the MVPD app and removing the MVPD license. They would have the Commission authorize competitors to create their own app.63 They insist on an independent user interface that bypasses any MVPD landing page and direct tunes to naked streams.64 They suggest that “digital certificates” from a central licensing authority could replace MVPD licensing.65 They seek access at no cost to third-party metadata licensed to MVPDs (and others) by commercial metadata suppliers.66 They seek access to individual entitlement data.67 And they call for direct FCC intervention in content licensing.68 All of these suggestions amount to the same proposal that unbundling proponents have long been pursuing, leading to the same problems with copyright, piracy, privacy, and more boxes in the home. Any attempt to combine aspect of these suggestions with the MVPD’s HTML5 app solution (or to “bolt on” the unbundling proposal to a purported “apps proposal”) would be fundamentally inconsistent with, and undermine the benefits of, the HTML5 solution.
A. Copyright and Technological Protection Measures
The critics of the HTML5 apps solution still refuse to respect the rights of copyright owners. Hauppauge insists that a device manufacturer not be “forc[ed]” to “conform to whatever is in every MVPD contract with every content provider.”69 Public Knowledge calls retail device evasion of copyright license requirements a “feature, not a drawback.”70 That is directly contrary
overall better approach than the ‘App’ proposal for MVPDs, or that ACA was commenting in any respect on apps- based approaches generally.”) (“ACA August 12, 2016 Ex Parte”). 62 See NCTA Comments at 41-59, 75-118, 129-141; NCTA Reply Comments at 9-20, 49-50; NCTA Rebuttal Comments at 6-29. 63 Public Knowledge July 29, 2016 Ex Parte at 3. 64See CCIA July 28, 2016 Ex Parte at 2-3; Hauppauge August 3, 2016 Ex Parte at 4; TiVo August 8, 2016 Ex Parte at 4; INCOMPAS August 2, 2016 Ex Parte at 2. 65 Hauppauge August 3, 2016 Ex Parte at 8-9. 66 TiVo August 8, 2016 Ex Parte at 5; Hauppauge August 3, 2016 Ex Parte at 3-4; CCIA July 28 Ex Parte at 3. 67 TiVo August 8, 2016 Ex Parte at 4; CCIA July 28, 2016 Ex Parte at 3; Amazon August 4, 2016 Ex Parte at 2; Hauppauge August 3, 2016 Ex Parte at 3-4. 68 Public Knowledge July 2, 2016 Ex Parte at 2. 69 Hauppauge August 3, 2016 Ex Parte at 2. 70 Public Knowledge July 20, 2016 Ex Parte at 2.
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to copyright law, as authoritatively explained by the Copyright Office. The Copyright Office has thoroughly explained that copyright owners have the exclusive right to license and profit from the commercial exploitation of their works, and how licensing is used to protect those rights.71 Senate Minority Leader Reid also explained the importance of licensing. “As we have seen in other contexts, relying on litigation as a sole remedy for copyright infringement creates an environment where piracy may flourish and the ensuing damage cannot be undone.”72 Whatever defenses fair use may provide in individual circumstances, it does not require owners to allow for unfettered unlicensed use of copyrighted material, nor does it require licensed distributors to adopt technologies that would invite such unfettered use.73
Rather than working within an apps and licensing framework that respects those licenses, the critics start by attacking the Copyright Office – which serves as the expert advisor to Congress and federal agencies and with which the Chairman specifically committed to consult.74 They claim the Copyright Office does not understand copyright and “doesn’t understand economics.”75 They end by treating Constitutionally-protected copyright not as the bedrock for the rich video ecosystem which consumers enjoy today but more as a nuisance and annoyance – specifically “a loud party, annoying the neighbors” that warrants intervention from an agency with no copyright jurisdiction to directly intervene in copyright licenses and to establish a zero- rate compulsory license.76 It is absurd to suggest that the creator and lawful owner of content would be deemed to “injure” a consumer by regulating whether and on what terms the content
71 Copyright Office August 3, 2016 Letter to Congress; Kyle Daley, FCC Heeding Copyright Office Concerns on Set-Top Box Plan, BLOOMBERG BNA (Aug. 4, 2016), http://www.bna.com/fcc-heeding-copyright-n73014445944/; John D. McKinnon, U.S. Copyright Office Criticizes FCC’s Plan on Set-Top Boxes, WALL ST. J. (Aug. 3, 2016), http://www.wsj.com/articles/u-s-copyright-office-criticizes-fccs-plan-on-set-top-boxes-1470260812. 72 Letter from Senator Harry Reid to the Honorable Tom Wheeler, Chairman, FCC (June 14, 2016). 73 Critics have also suggested that no recording is supported through HTML5 apps. In fact, the first implementations of the HTML5 app in the Xfinity Partner program supports consumers’ home recording from retail devices under the MVPD app and in the protected MVPD cloud. NCTA Reply Comments at 57. Programmers have explained that keeping programming inside of an MVPD-controlled app at all times is “the only way of ensuring that the security of content is not jeopardized.” See Fox August 8, 2016 Ex Parte at 1. Public Knowledge, CCIA and other parties are seeking to evade the protections provided by apps because they continue to insist that they are not and may not be bound by the agreed-upon terms for presentation and use of content contained in programmer- MVPD programming and licensing agreements, even though their copyright claims have been specifically rejected by the Copyright Office. Cloud recording protected by an MVPD’s HTML5 app safeguards these essential security and copyright licensing requirements. 74 17 U.S.C. § 701(b). Testimony of Tom Wheeler to House Energy & Commerce Committee, Communications Subcommittee Hearing on FCC Oversight, July 12, 2016 (exchange with Rep. Pallone). 75 Shiva Stella, Public Knowledge Responds to Copyright Office Attack on Set-top Box Competition, PUBLIC KNOWLEDGE (Aug 3. 2016), https://www.publicknowledge.org/press-release/public-knowledge-responds-to- copyright-office-attack-on-set-top-box-competition; Charles Duan, Public Knowledge, The Copyright Office Doesn’t Understand Economics, MORNING CONSULT (Aug. 10, 2016), https://morningconsult.com/opinions/copyright-office-doesnt-understand-economics/. 76 Id.
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may be distributed to the consumer.77 And even the staunchest critic concedes that only “elected representatives” in Congress may intervene in copyright – not the FCC.78
The critics do not even pretend to protect any copyright the MVPD has in its intellectual property in the “collective work” and “compilation” of its service as presented to customers.79 Comcast, for example, invested hundreds of millions of dollars, as well as significant time and other resources, to develop the X1 platform, which was awarded an Emmy for its user experience and visual design. With its next-generation cloud-based X1 platform, Comcast designed and created an interactive, state-of-the-art user interface that compiles, arranges, and integrates content, enhances customers’ viewing experience, and offers creative presentations such as a dedicated Kid Zone where kids can independently explore kid-friendly content. The “compilation” and user interface fully qualifies for copyright and other intellectual property protections.80 This is further supported by the fact that some other operators have licensed the X1 for use with their own MVPD services in the U.S. and Canada.
Charter, as a second example, has spent many millions of dollars and has committed a tremendous amount of operational resources over the past four years to build the Spectrum Guide. Spectrum Guide is a visually rich video content interface that is presented across all consumer screens – from traditional set top boxes, to retail devices such as Roku, laptops/desktops, iPhone, and Android based phones and tablets. Spectrum Guide is designed to arrange, integrate and present programming and other content such as unique sports viewing and scores and specialized kids viewing experiences. Spectrum Guide is written in multiple programming languages enabling presentation across these many device types and operating systems, while providing a consistent user experience in terms of content presentation and user experience. In addition, Spectrum Guide is designed to support cloud-based recording and to provide seamless access to additional video and audio content and applications regardless of source. The guide can provide users with real-time views of multiple live channels, reminders and personalized recommendations. It is just one more example of a “compilation” and user interface that fully qualifies for copyright and other intellectual property protections.
The critics’ proposals to access naked streams without the protection provided by the MVPD app presents the same copyright problems as “information flows” for a “third party app”
77 Critics like Public Knowledge misconstrue the scope and purpose of copyright law. By protecting the interests of creators in securing a fair return for their creative labor, copyright protections “stimulate artistic creativity for the general public good.” Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975). 78 See Charles Duan, Public Knowledge, The Copyright Office Doesn’t Understand Economics, MORNING CONSULT (Aug. 10, 2016), https://morningconsult.com/opinions/copyright-office-doesnt-understand-economics/ (“the people, through their elected representatives, enact laws to override that default contract position”); see also NCTA Comments at 167-68; Theodore B. Olson, Helgi C. Walker, and Jack N. Goodman, The FCC’s “Competitive Navigation” Mandate: A Legal Analysis of Statutory and Constitutional Limits on FCC Authority, Attached to NCTA Comments as Appendix A, at 41-55 (“Legal White Paper”). 79 INCOMPAS, for example, continues to insist that MVPD service be stripped of its own user interface. INCOMPAS August 2, 2016 Ex Parte at 2. 80 Copyright Office August 3, 2016 Letter at 14-15; Legal White Paper at 48-59; NCTA Rebuttal Comments at 6-10.
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that was part of the unbundling proposal included in the NPRM. Bypassing the app, as proposed by critics, would dismantle the technological protection measure that the Copyright Office has explained is protected under the DMCA.81 Hauppauge incorrectly claims that “products from independent competitors have not been a source of complaint with respect to ... the deletion or obfuscation of advertising.”82 On the contrary, TiVo is in fact deleting, obfuscating, and replacing advertising by overlaying its own advertising while the embedded advertising is being “paused,” and NCTA has vigorously complained.83 MVPD apps are essential for protecting the integrity of programming and advertising.
Nor does the use of DRM “lock out or stifle” new entrants, as claimed by EFF.84 Indeed, many new entrants use DRM to protect their own OTT services.85
B. Licensing
Critics also claim, incorrectly, that the HTML5 app licensing process would be unduly burdensome on device makers. Hauppauge asserts that the HTML5 proposal is “prohibitively complex” because it would supposedly require “exceptionally cumbersome” license negotiations with “potentially, every MVPD” and could entail “collisions” of conflicting MVPD requirements.86
At the outset, the apps proposal would only require MVPDs with one million or more video customers to create an HTML5 app for its service. Today, there are no more than eight MVPDs with over one million video subscribers (seven if the Commission adopts a two million
81 Copyright Office August 3, 2016 Letter at 14-15 (“We also observe that the approach of the Proposed Rule appears to be in tension with Congress’ judgment in enacting the Digital Millennium Copyright Act of 1988 (“DMCA”) to allow copyright owners to select and implement technological measures to secure their content on digital delivery platforms. … The Proposed Rule would inhibit the ability of MVPDs and content developers to develop, improve, and customize technological solutions to protect their content in the digital marketplace. It would do so in part by requiring MVPDs to give third-party actors access to copyrighted video content and associated data according to one or more security standards prescribed by an outside organization rather than through their preferred (and potentially more secure) protocols negotiated between copyright owners and the MVPDs.”) 82 See Hauppauge August 3, 2016 Ex Parte at 9. 83 NCTA Rebuttal Comments at 6 n. 5, 8. 84 EFF August 2, 2016 Ex Parte at 2. EFF claims that a covenant to remove DRMs from the protection of the DMCA is still being actively debated in W3C and that consensus is being sought. This is an inaccurate characterization. To be accurate, a proposal for such a covenant was proposed by EFF as an addition to the charter for the W3C EME Working Group when the WG’s charter was up for renewal. The same process that approved the original charter for the EME Working Group declined to add this covenant to the EME WG charter when it was recently renewed. 85 Randall Stewart et al., Protecting Netflix Viewing Privacy at Scale, THE NETFLIX TECH BLOG (Aug. 8, 2016 ) (“We have always relied on pre-encoded Digital Rights Management (DRM) to secure our video streams.”), http://techblog.netflix.com/2016/08/protecting-netflix-viewing-privacy-at.html. 86 Hauppauge August 3, 2016 Ex Parte at 6.
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subscriber threshold as recommended by ITTA87). For comparison, Roku has 3,400 “apps” or channels; clicking or accepting seven or eight additional licenses that already include hundreds of video sources is hardly a burden. Second, the HTML5 proposal has been streamlined and standardized as much as possible so that it will not be a burdensome licensing process. Each of the largest MVPD will offer a standard license so that there will be no need for individual negotiations.
Rather than “licensing collisions,” MVPDs expect a common core of license terms to be standardized across MVPDs, although there may be some differences among MVPDs. For example, one-way satellite systems may need certain additional terms to assure that geographic restrictions are respected, or a term may be required from an affiliation agreement that is specific to one MVPD. The licenses will be developed during the two year window. MVPDs and Programmers are involved in the development of terms for inclusion in these licenses, and the terms will include contractual rights to further ensure that the scope of rights granted by the programmers to the MVPD are respected.88 MVPDs could make these licenses available to manufacturers within the two-year window before launch.
Some critics suggest that there should be a centralized licensing body or “digital certificate” authority with authority to license all content from all MVPDs on all devices.89 This is unnecessary, given how frictionless MVPDs propose to make the licensing process. It is also unworkable. There is no such central body. Programmers do not pool their content and license from a single source: they negotiate them in bilateral agreements with MVPDs that are then baked into the individual MVPD app. There is no patent or security being licensed as there was with the DFAST technology in the CableCARD context. It is each individual MVPD that has assembled the service that contains programmers’ content, created the app, licenses the app, probably licenses its individual trademarks, and is enabling integrated search. As a result, it is essential to have privity of contract between the device manufacturer and the MVPD service provider.
The suggestion that “digital certificates” could replace MVPD licensing is just one more flavor of attempting to evade licensing responsibilities. It is a rehash of the debunked theory of self-certification, and no substitute for apps and a MVPD license. Hauppauge is proposing electronic certificates that attest only to a device manufacturer’s compliance with its paper promise to comply with applicable copyright, regulatory, and other requirements.90 But that paper promise does not assure copyright compliance, does not meet privacy requirements, and
87 See Letter from Michael J. Jacobs, Vice President, Regulatory Affairs, ITTA, to Marlene H. Dortch, Secretary, FCC, MB Docket No. 16-42, CS Docket No. 97-80 (July 14, 2016) at 2. 88 See CBS August 12, 2016 Ex Parte at 2 (“it is critical that any license that a third party need execute to host an app be one that has been drafted exclusively by MVPDs and programmers, as it is our services and content that is being licensed.”) 89 INCOMPAS August 2, 2016 Ex Parte at 5, Hauppauge August 3, 2016 Ex Parte at 6, 8-9, TiVo August 8, 2016 Ex Parte at 8. 90 Hauppauge August 3, 2016 Ex Parte at 9.
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does not provide consumers with the same privacy enforcement tools as does an MVPD app.91 There is simply no central device testing authority covering all technologies for all MVPDs.92
HTML5 apps licensed by MVPDs simplify the entire process: the app serves as a technological protection measure, as intended by the DMCA, and the MVPD and its specific content providers can backstop the app through their enforcement roles under the license. By contrast, there is nothing “enforceable” once the MVPD and its associated content providers are removed from their enforcement roles with respect to the MVPD’s service and its license arrangements. Digital certificates do not suffice.
This is not to say that there cannot be a method for a device manufacturer to license directly from programmers without an MVPD license: that method is the direct licensing that Sony Vue, Netflix, Amazon, Hulu, Sling TV, and other OVDs use today to obtain rights directly from each programmer.93
C. The HTML5 Apps Solution Combats Piracy, While an Unbundling Proposal Would Abet Piracy.
The HTML5 proposal includes an unprecedented commitment by MVPDs to support integrated search of MVPD content on retail devices, on condition that that device manufacturers not commingle the search results of MVPD content with pirate content. 94 As the Copyright Office has cautioned, “there already exists today a variety of third-party set-top box devices, mainly produced overseas, that are used to view pirated content delivered over the internet. A reasonable concern is that … this market might expand to encompass devices designed to exploit the more readily available MVPD programming streams without adhering to the prescribed security measures.”95 Likewise, CreativeFuture, a coalition of 450 companies and organizations and over 60,000 individuals employed in creating content, explained how any solution must not “allow technology and platform providers and pirate box manufacturers to import the piracy
91 NCTA Comments at 75-85; NCTA Reply Comments at 9-20; NCTA Rebuttal Comments at 16-17. 92 Hauppauge is not even proposing certification testing for each model, and waffles even on what little enforcement it envisions—suggesting a lengthy “notice and remediation” process that NCTA has previously explained would compromise meaningful enforcement. NCTA Reply Comments at 75. 93 In contrast to its general disregard of programmer interests, Public Knowledge argues that MVPDs should not use the HTML5 app to preclude programmer TV Everywhere apps or prevent programmers from licensing content directly to OVDs. Public Knowledge July 29, 2016 Ex Parte at 3 n. 10. MVPDs have been urging OVDs to engage in direct licensing rather than trying to steal programmers’ content for free. As NCTA and AT&T have previously said,”[t]he HTML5 app license is not intended to exclude other video programming provided by another licensed [i.e., non-pirate] distributor from the device or from integrated search.” NCTA & AT&T Response to Questions at 22. And the inclusion of HTML5 app would not justify discrimination in the inclusion of programmers’ TVE apps on the same device. 94 See NCTA & AT&T Response to Questions at 21; see also NCTA Comments at 100-103; NCTA Reply Comments at 30-31. 95 Copyright Office August 3, 2016 Letter to Congress at 16.
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problem into the pay-TV services environment for the first time, unrestricted and unprotected by licensing agreements or Commission rules.”96
Yet INCOMPAS and EFF seem unwilling to even attempt to protect against the expansion of pirate content to the TV ecosystem. EFF urges the Commission to not even try to limit searches to licensed content, saying that “[s]uch technology does not exist today and cannot be invented.”97 INCOMPAS suggests that any anti-piracy protections would eliminate all user- generated content and all content created by small programmers.98 Of course that is not the case. Small content producers can provide the content that they create and own. NCTA’s reference to “licensed” content is shorthand for “not pirated.” It is easy to envision a device manufacturer designing its integrated search to avoid sites and sources that primarily offer pirate content: they could include MVPD content only in the integrated search of other TV apps and trusted sources. The device manufacturer would not be precluded from also offering a full Internet browser, as long as it did not commingle MVPD with pirate content.
D. Privacy
Proponents of the “information flows” approach contend that entitlement data should be released to a third-party device if a consumer “opts-in” to that release.99 TiVo even seeks to require MVPDs to provide “information regarding past viewership.”100 Such entitlements and viewership information reveal personally identifiable information such as subscriptions to channels, previous viewing, and financial transactions. Programmers have specifically expressed “concern about entitlement data being released to third parties.”101 The HTML5 apps proposal keeps entitlements inside the app in order to protect privacy as required by law. While Public Knowledge implies that the private entitlement information “never leaves the device,”102 that is not what they are actually proposing. Proponents of unbundling never deny (and some explicitly admit103) their intention to mine private viewing information. Once entitlement data goes beyond
96 CreativeFuture Comments at 8. See also ; MPAA/SAG-AFTRA Comments at 26-28; MPAA/SAG-AFTRA Reply Comments at 30-31. 97 EFF August 2, 2016 Ex Parte at 3. 98 INCOMPAS August 2, 2016 Ex Parte at 2-3 (“The INCOMPAS Representatives agreed that pirated content should not be purposefully co-mingled with legitimate content sources, but as presented the app proposal would restrict access to lawful, popular, user-generated content on sites such as YouTube, Facebook, and Vimeo. Furthermore, non-MVPD affiliated programmers would benefit from a competitive navigation device market to share their content with a wider audience. The app proposal would foreclose the opportunity for many independent programmers to make their programming available via search features of third-party devices, and keep search results firmly within MVPDs’ control.”) 99 Public Knowledge July 29, 2016 Ex Parte at 3. 100 TiVo August 8, 2016 Ex Parte at 6. 101 CBS August 12, 2016 Ex Parte at 1. 102 Public Knowledge July 29, 2016 Ex Parte at 3. 103 TiVo admits to collecting and monetizing private viewing data, TiVo Reply Comments at 15-16, and even confirmed at the 2016 NAB Show that, under an information flow approach, third parties could add, delete or
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the app, it is exposed to attack by hackers or third party apps on the retail connected device, vastly increasing the attack surface on consumer privacy.104 And if privacy is compromised, proponents of an entitlement information flow do not even pretend that their proposal gives consumers the same rights and remedies as are required by Title VI and are provided by the HTML5 apps approach.105
This is not to say that consumers cannot share their information and preferences with a device manufacturer. Just as a device can run a recommendation engine based on search, it can ask consumers to populate an interest profile. Given such available alternatives, there is no reason to compel MVPDs to release personal entitlement data in violation of their obligations under Sections 631 and 338.
E. Innovation
Lest there be any doubt that the critics are still pursuing an unbundling approach that has long been discredited as a constraint on innovation, they even press for a hardware AllVid-like adapter in the home,106 when the HTML5 proposal is offering cloud delivery. The critics remain rooted in hardware, fixed protocols, and physical adaptors from the 1990’s when the market is moving to the new millennium’s cloud, apps and streaming. One respected analyst explained that “[c]onsumers are steadily evolving toward a new paradigm of video consumption based on app stores, device home screens (that show multiple apps), app home screens (that show featured content) ….”107 Another explains that “an app … is the only approach that works across all types of devices … and actually relates to the technology ecosystem as it is.”108 The HTML5 app approach will usher in the future for which “consumers have already voted with their feet.”109
substitute advertising. Monty Tayloe, Third-Party Set-Tops That Change or Remove Ads Not a Concern, TiVo CTO Says, COMMUNICATIONS DAILY (Apr. 20, 2016), subscription service (“Third-party set-top boxes having the capacity to strip out or overlay the advertising in a pay-TV content stream with new, different ads shouldn’t concern opponents of the FCC’s set-top box proposal because market forces will prevent abuse, TiVo Chief Technology Officer Joseph Weber said.”). None of the unbundling proponents would restrict TiVo and other companies from overlaying ads on top of programming when the consumer hits “pause” trying to skip the commercials and CVCC specifically seeks to perpetuate the practice. CVCC Reply Comments at 51, 65. The record is also replete with unrefuted privacy abuses by proponents of the NPRM’s unbundling proposal. NCTA Comments at 82-84. 104 Skjei, Technical White Paper at 40-41. 105 NCTA Reply Comments at 9-19; NCTA Rebuttal Comments at 16-17. Public Knowledge’s suggestion that Section 631(d) compels release of such personally identifiable information to a user’s retail device is wrong. See Public Knowledge July 29, 2016 Ex Parte at 3. Section 631(d) allows consumers to inspect and correct customer records at a location and time established by the MVPD; it is not a basis for exposing PII to device manufacturers. 106 Public Knowledge July 29, 2016 Ex Parte at 2 n. 5. 107 Tablets – not DVRs or Game Consoles – Will Be at Heart of Streaming TV Boxes, TDG Analyst Says, , COMMUNICATIONS DAILY (Sept. 24, 2015), subscription service. 108 Daniel Frankel, DSTAC, CableCard, Pay-TV Apps and the Future, FIERCECABLE (Oct. 5, 2015), http://www.fiercecable.com/special-report/dstac-cablecard-pay-tv-apps-and-future-cable-industry-s-20b-set-top- business (Espelien said: “The interface between services and devices is going to be an app. This is the only approach that works across all types of devices (not just living room STB which is only a part of overall video
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Still more telling is the failure of the critics to refute the many technological objections to their proposal. INCOMPAS says wishfully “The NCTA filing does not offer any technical concerns associated with the “bolt on”” approach.110 On the contrary, the record is filled with detailed technical critiques of the many versions of the unbundling proponents’ technical submissions, including suggestions that the “information flows” could be “bolted on” to the apps proposal.111 The record demonstrates that the unbundlers’ approaches would halt the diversity and rapid technological evolution of competing MVPD networks; that information flows and third party apps would introduce fixed interfaces as a “choke point” that would lock in network technologies and capabilities dictated by the interfaces; and that attempting to bolt on third party apps or replacement guides is not an apps-based approach, but would defeat the entire function of apps.112 In addition, it would create the same copyright, piracy, privacy, and consumer protection problems that have been exhaustively catalogued.113 These are not, as some contend, “policy” questions that may be separated from “technical” issues in the distribution of high value programming content and commercial video services.114 Rather, they are inseparable questions that must be addressed in tandem when working with MVPD distribution of high value programming content and commercial video services.
III. NO CHARGE FOR APPS
Critics claim there is a threat of MVPDs finding ways to charge consumers for the “free” apps to recover lost set-top box revenues through increased service charges.115 In this regard, they still pretend that all box revenue goes to the “bottom line” as profit. They still ignore all of the substantial costs involved in developing, purchasing, maintaining, and installing these boxes that can be eliminated through apps. They still ignore the price competition amongst MVPD and other video services.
The HTML5 apps proposal presents a way for consumers to eliminate the box. Under the HTML5 apps approach, cable operators have committed that with no set-top box, there is no set- top box rental, and there is no app charge—just the standard fees that apply to a consumer’s
consumption) and actually relates to the technology ecosystem as it is. Consumers have already voted with their feet in favor of this approach, so there is no point in trying to turn the clock back to the 1990s on this.”). 109 Id. 110 INCOMPAS August 2, 2016 Ex Parte at 4. 111 Skjei, Technical White Paper at 1-55; Brown, Technical Analysis at 3-17; AT&T Comments, Technical Declaration of Stephen P. Dulac; Comcast Comments, Declaration of Tony G. Werner; NCTA & AT&T Response to Questions at 26-28. 112 NCTA Comments at 106-118; NCTA & AT&T Response to Questions at 26-28. 113 NCTA Comments at 41-59, 75-118, 129-141; NCTA Reply Comments at 9-20, 49-50; NCTA Rebuttal Comments at 6-29; see also AT&T Comments at 28-57, 76-86; AT&T Reply Comments at 28-41, 51-54. 114 Public Knowledge July 28, 2016 Ex Parte at 3. 115 TiVo claims that “NCTA and AT&T are unclear as to whether apps will be available free of charge to consumers or whether programmers will be charged extra.” TiVo August 8, 2016 Ex Parte at 7.
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MVPD service. If manufacturers keep the app free, there is also no charge to manufacturers. 116 And MVPDs will not charge programmers for the HTML5 app.
IV. THE HTML5 PROPOSAL OFFERS CONSUMERS MORE, NOT LESS, THAN CABLECARD DEVICES
Critics claim that the apps approach is a “step backward” from CableCARD and “reversal of the status quo.”117 The apps approach in fact offers much more than CableCARD. It provides access to 94% of MVPD customers, instead of less than half; it offers access to VOD, interactive services, and new marketing offers like electronic sell through, instead of only one-way linear cable programming; it offers integrated search capability; it makes content accessible to other home devices; and a cable implementation already underway supports personal cloud recording.118
TiVo argues that, under the HTML5 apps approach, “competitive devices would lose functionality they have today and no longer be able to develop their own full-featured, innovative user interface.”119 But this is incorrect: as Roku and others have done, competitive device manufacturers would be free to develop and offer their own top-level user interface, their own integrated search, even their own program guides if they so choose.120 TiVo is likewise incorrect in asserting that retail devices with HTML5 MVPD apps would not be able to “enable fully-functional integrated search or a personalized recommendation engine that includes all of the MVPD and OVD content sources the consumer has access to.”121 As noted above, the device may manage recommendations from search results and user profiles using as many sources of content as the device has available.
If there are differences between the CableCARD approach and HTML5 apps approach, they reflect the substantial changes in a video marketplace that have occurred since the CableCARD was conceived nearly twenty years ago. CableCARD was designed only for the in-
116 Amazon appears intent on building an app store ecosystem from which it could nonetheless collect a tithe on MVPD services, urging the FCC to require MVPDs to “embrace the norms of the app store ecosystem.” Amazon August 4, 2016 Ex Parte at 2. The HTML5 app can only remain free if manufacturers keep it free. 117 TiVo August 8, 2016 Ex Parte at 2; CCIA July 28, 2016 Ex Parte at 2. 118 NCTA & AT&T Response to Questions at 17-18. 119 TiVo August 8, 2016 Ex Parte at 2. 120 See NCTA Comments at 27 (describing Roku’s interface); Skjei, Technical White Paper at 30. For example, a top-level menu can provide information that it has acquired from commercial sources in linear guide format about what is on in the MVPD app. For all of the reasons previously discussed, the consumer would access the programming itself through integrated search and the MVPD app. 121 TiVo August 8, 2016 Ex Parte at 3. TiVo further invokes Apple’s recent decision to develop its own guide, but nothing in the HTML5 apps proposal would prevent a retail device from offering a guide or running integrated search. It supports both.
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home decryption of one-way linear cable programming. 122 By agreement between the cable and consumer electronics industry, these CableCARD-enabled UDCP devices were intended to be transitional, with the eventual migration to apps-based solutions for interactive services.123 They emerged before a video-capable Internet, out-of-home viewing, “connected devices,” over-the- top video, cloud delivery, data mining, and TiVo’s insertion of Internet-delivered ads into the MVPD programming came into existence.
Programming rights were also simpler then. Today, programmers segment the market – they license some rights to OVDs and other rights to MVPDs; they make refined judgments about devices and device security. It is imperative that licensed distributors meet the requirements in their licensing agreements in order to secure the best content for their platforms. Accordingly, the HTML5 apps proposal employs the most modern technology and global standards for commercial video and provides critical protections for copyright, advertising, and privacy that are given short shrift by CableCARD-enabled UDCPs. Programmers have explained that keeping programming inside of an MVPD-controlled app at all times is “the only way of ensuring that the security of content is not jeopardized.”124 The HTML5 apps approach does just that and also reflects a modernized approach to an increasingly complex programming market.
MVPDs are not the only video providers that require disciplined presentation of their services through their apps. Netflix and YouTube specifically withdrew public APIs after third parties did not present their services with all the ads and features intact.125 Google explained that third parties should not be able to block ads on videos or allow users to download videos to devices that had not been authorized by the publisher.126 Consumers have voted through their purchases that they prefer app-based devices to CableCARD devices.127
122 See former rule 47 C.F.R. §15.123(d) (“Manufacturers and importers shall provide in appropriate post-sale material that describes the features and functionality of the product, such as the owner's guide, the following language: ‘This digital television is capable of receiving analog basic, digital basic and digital premium cable television programming by direct connection to a cable system providing such programming. A security card provided by your cable operator is required to view encrypted digital programming. Certain advanced and interactive digital cable services such as video-on-demand, a cable operator's enhanced program guide and data- enhanced television services may require the use of a set-top box. For more information call your local cable operator.’”). 123 NCTA Comments at 61. 124 See Fox August 8, 2016 Ex Parte at 1. 125 See NCTA Comments at 63-66, 117. 126 NCTA Comments at 117-18. 127 NCTA Comments at 25, 153.
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V. NO ADDITIONAL RULES ARE REQUIRED FOR CONTINUED SUPPORT OF CABLECARDS
Despite continued calls for retention or re-adoption of CableCARD support rules,128 no party details any actual ongoing problems with CableCARD support that would justify such resurrection of CableCARD support rules. TiVo applauds Comcast for “continued commitment to CableCARD provisioning and support” and for going well beyond any requirements from the vacated plug and play rules.129 Merger conditions cover Charter.130 Cablevision has utilized SmartCards and then downloadable security for its own set-top boxes for over a decade with no measurable reduction in support for CableCARDs for retail devices. There is no evidence whatsoever that MVPDs have been arbitrarily encoding content to disadvantage retail devices, which was the animating concern and basis for adopting encoding rules in the first place. With more than 55 million CableCARDs currently deployed in cable-provided devices,131 cable operators have strong business incentives to ensure that CableCARDs continue to function properly. As NCTA Comments documented, cable operators have continued to strongly support CableCARDs even after the supporting rules were vacated by EchoStar.
CONCLUSION
The record evidence is overwhelming that the only lawful and rational way to serve the fundamental goal of Section 629 is to adopt the alternative HTML5 apps-based approach proposed by diverse independent programmers and MVPDs.
Respectfully submitted,
/s/ Paul Glist
Paul Glist
128 CCIA July 28, 2016 Ex Parte at 4. 129 NCTA Comments, at 90-91 and Appendix D, Timeline of Cable Industry Support for CableCARDs at 5 (2014: “TiVo tells the FCC that ‘Comcast has again partnered with TiVo to work on a two-way non-CableCARD security solution that will enable retail devices to access the full Comcast lineup of linear and VOD programming, whether QAM- or IP-delivered.’” 2016: “Comcast working towards offering a self-service tool for CableCARD activation, an option to direct-ship CableCARDs for self-installation, and a single support line for all CableCARD activation, support and billing questions.”). 130 Applications of Charter Communications, Inc., Time Warner Cable Inc., and Advance/Newhouse Partnership For Consent to Assign or Transfer Control of Licenses and Authorizations, Memorandum Opinion and Order, MB Docket No. 15-149, FCC 16-59 at 223-226, Appendix B, VII (2016). 131 See Letter from Neal M. Goldberg, Vice President and General Counsel, NCTA to Marlene H. Dortch, Secretary, FCC, CS Docket No. 97-80 (April 27, 2016) (reporting that the “nine [largest incumbent cable] companies have more than 55,000,000 operator-supplied set-top boxes with CableCARDs currently deployed”).