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Comcast, AT&T Fire Back As FCC Moves Ahead With Set-Top Box Proposal

Federal regulators Thursday moved forward with a proposal to make it easier for consumers to switch from set-top boxes leased monthly from pay-TV companies to new devices sold at retail by consumer electronics or Internet companies. Comcast ( CMCSA ), AT&T ( T ) and other pay-TV companies quickly criticized the Federal Communications Commission’s vote to begin making the new rules, calling it unneeded because of advances in Internet and app-based technology. Alphabet ’s ( GOOGL ) Google and Tivo ( TIVO ) are among companies that could gain from the FCC’s proposal. Roku, a maker of video streaming devices, has sided with cable TV industry partners amid the lobbying battle. FCC Chairman Tom Wheeler, an Obama administration appointee, said Thursday in a hearing that rising set-top box leasing fees have hurt consumers. The FCC, with a Democratic majority, voted 3-to-2 to begin a formal rule-making process. The agency aims to develop technical standards so that new hardware suppliers can provide access to programming sold by pay-TV companies. The FCC says that its set-top box initiative is not a threat to copyright protections, although pay-TV providers pay content companies for programming. Republican FCC member Michael O’Rielly said that it would take three years for new products to appear, because pay-TV companies would have two years to comply with any new technical standards for sharing programming. He added that technology innovation would render the FCC’s rules “obsolete” in the meantime. Comcast, in a blog post, said: “A new government technology mandate makes little sense when the apps-based marketplace solution … is driving additional retail availability of third-party devices without any of the privacy, diversity, intellectual property, legal authority or other substantial concerns raised by the FCC chairman’s mandate.” Comcast has stepped up deployment of Internet-ready X1 set-top boxes. The FCC proposal has pressured shares of  Arris International ( ARRS ), a supplier of set-top boxes to the cable industry; they were down 13% in afternoon trading on the stock market today , following the vote, but pay-TV stocks saw no big moves. AT&T, in a statement, said: “While consumers are embracing an apps-based approach that offers a variety of content on more than 450 devices, the FCC has chosen to go down a path that threatens the very competition that has led to a vibrant marketplace. As this proceeding continues, we hope these concerns are given the weight they deserve and the commission allows consumers and not Google to continue to drive the market.” By selling set-top box type devices, Google could target the TV advertising market, raising privacy issues, according to critics. Wheeler’s proposal could also impact Charter Communications ( CHTR ), Time Warner Cable ( TWC ) and  Verizon Communications ( VZ ), as well as satellite TV broadcasters DirecTV and Dish Network ( DISH ).

Verizon Edges AT&T As Top Telecom Brand; Comcast Xfinity In Top 10

Verizon Communications ( VZ ) once again had the top-ranked global telecom brand among service providers, though cable firm Comcast ’s ( CMCSA ) Xfinity service cracked the top 10 for the first time, according to U.K.-based research firm Brand Finance. Among telecom network gear makers, China’s Huawei overtook Cisco Systems ( CSCO ) for the top spot worldwide, Brand Finance said. Verizon’s brand is ranked No. 6 globally among all technology companies, behind Apple ( AAPL ), Alphabet ‘s ( GOOGL ) Google, Samsung, Amazon.com ( AMZN ) and Microsoft ( MSFT ). In the U.S., Verizon edged out AT&T ( T ) in branding power. Wireless service providers are among the biggest advertisers. AT&T, which acquired satellite TV broadcaster DirecTV in July, has so far kept the DirecTV brand in its marketing. Comcast’s Xfinity ranked No. 10 globally in the Brand Finance report. Analysts credit Comcast’s Xfinity service platform with improving video subscriber results, owing to video-on-demand and cloud DVR features. Verizon has ramped up marketing for its new Go90 mobile video service, including live concerts and billboards, but Verizon’s own brand doesn’t appear in its Go90 commercials. The mobile video service can be downloaded as a mobile app by non-Verizon subscribers, though some features and perks are available only to Verizon customers. “Verizon’s most important milestone after the last year was the completion of its acquisition of AOL , a deal which significantly bolsters Verizon’s potential content offering. It is also reinforcing its established mobile dominance by pioneering the use of 5G,” said the Brand Finance report. The top 10 global telecom service brands also include: China Mobile ( CHL ), Deutsche Telekom ( DTEGY ), Vodafone Group ( VOD ), Softbank ( SFTBY ), Orange, BT and Japan’s NTT ( NTT ).

Roku Sides With Cable TV Partners In FCC Set-Top Box Brouhaha

FCC Chairman Tom Wheeler’s proposal to open up the TV set-top market does not have the support of one of the biggest video streaming set-top makers, Roku, which has partnered with cable TV firms. “We have not been advocating for a rule making in this area at this time,” Tricia Mifsud, a Roku spokeswoman, told IBD. “While we are known for selling streaming players, it is only one area of our business. Customers also access our platform through smart TVs and streaming players that operators deploy.” Comcast ( CMCSA ), Charter Communications ( CHTR ) and Time Warner Cable ( TWC ) are among cable TV firms that could be affected by Wheeler’s proposal. AT&T ( T ), which provides U-verse pay-TV service, also has protested Wheeler’s set-top box rules. The Federal Communications Commission is expected to vote on whether to move forward with the set-top box initiative on Thursday. The agency could adopt new rules by year-end. Alphabet ’s ( GOOGL ) Google has drawn the wrath of cable TV firms in the wake of the Wheeler’s proposal because it may target the TV advertising market.   Tivo ( TIVO ) is another company that could take advantage of new set-top box rules, analysts say. Wheeler aims to make it easier for consumers to switch from set-top boxes rented from cable TV companies to devices sold by consumer electronics or Internet companies. The FCC says making programming bundles sold by pay-TV companies accessible from a wider range of devices is not a threat to copyright protections . Roku recently raised $45.5 million in a funding round and appears to have shelved plans for an initial public offering. Critics say the FCC’s proposal is not needed because of technology and marketing shifts already underway.   Time Warner Cable in New York City is testing a cable service that doesn’t require a set-top box. Its slimmed-down programming package is available through a broadband connection and Roku’s streaming device. “In addition to Time Warner Cable, we also have a similar arrangement with Charter where they are buying streaming players to offer in a bundle,” added Roku’s Mifsud. “Overseas, we have partnerships with Sky in several countries and Telstra where we have licensed use of our platform and they have deployed their streaming video services to co-branded streaming players.” Amazon.com ( AMZN ), Roku and others sell Internet sticks, or dongles, that provide access to Web video. Some cable firms still do not provide access to Netflix ( NFLX ), or YouTube apps on their Internet-ready set-top boxes.