Some MVPD AllVid Fears ‘Overwrought,’ Public Knowledge’s Sohn Says

Public Knowledge President Gigi Sohn fired back at Chessen’s comments in particular, saying the cable programming and distribution industry’s fears of content disintermediation are “overwrought.” She asked other panelists how AllVid is any different from what TiVo does now, “except you'd have a lot of devices instead of only one device.” The forthcoming proposed rules are “in some ways CableCARD on steroids,” which won’t change contract privity -- the chain of contracts between the content owner and viewer -- as some cable companies fear, Sohn said. “This would provide a way to continue to have a secure chain” of contracts, she said.

That a consumer can’t visit a Best Buy store and get a competitive video device is “a shame,” said CEA Senior Vice President Michael Petricone. “By and large the cable box kind of looks like it did 10 years ago,” and with AllVid some cable subscribers may keep leasing video devices from their operator, while others will buy them, he said. “Because the navigation device market has been essentially frozen, it’s been hard for consumers” to take advantage of newer video services, because “the innovation drives the new consumer uses,” he said. Sohn, aligned with the CE industry on seeking AllVid rules, said the status quo doesn’t fly under Section 629 of the Telecom Act.

"We keep losing sight that there is a statute here,” so “doing nothing is not an option,” Sohn said. There’s no device for sale now “that can fully take the place of a cable set-top box,” she said. Section 629 talks about giving consumers access to what’s offered by cable, Chessen said. He and Fuller said a slew of deals show online video is making its way onto the screens of MVPD-connected sets.

"It’s not like government can just mandate content be online” and over-the-top, and there needs to be a business case for doing that in a profitable way, Chessen said on the subject of video migrating from traditional sources to the Internet. Such content has complemented DirecTV’s services, rather than competing with it, Fuller said. “I don’t think we've yet seen people cord-cutting and replacing DirecTV all-out with online video,” which may speak to the older age of the company’s subscribers, since younger viewers are more willing to seek out video content online, rather than watching only traditional video, she said. Since DBS doesn’t “have a two-way pipe like cable does” to customers’ homes, the company sends some video over broadband, Fuller said: “We've sort of incorporated some of what’s over-the-top into our services as well."

Innovation can “come at a cost,” so it shouldn’t take place just by CE companies on the “back-end” of DBS service, Fuller said. That would hurt the service provider’s technical advances, she said. “It’s not being against innovation or choice, but making sure customers get innovation and choice from all ends,” Fuller said. “Our biggest concern is that the FCC doesn’t come in and pick one mandate and one winner and one loser.” Satellite is unique in that it has no facilities on the ground, so the set-top is to DBS as the headend is to cable, meaning program guides, interactive features and other newer services all get “developed in the set-top,” she said.

AllVid is “only one way” for CE companies who want access to cable and satellite content to integrate it into their devices, without giving access back to MVPDs “so that we can put out a device into the marketplace that would integrate” it, Chessen said. “We are a retail business. What the AllVid proposal essentially wants to do is to turn us into a wholesale business” providing a “data stream” for CE to “slice and dice and create their own offering, which would no longer be the cable offering as it was presented,” he said. “The Time Warners, Comcasts, DirecTV would no longer have that relationship with the customer.”