The U.S. Copyright Office criticized a Democratic plan to open up the market for cable boxes to third-party content providers such as Google and Amazon, saying the plan "could interfere with copyright owners' rights to license their works."
The office noted that the owners of video content currently have the ability to work out contractual arrangements with cable providers. But it said the rule proposed by Democrats on the Federal Communications Commission could weaken those rights and potentially make those owners vulnerable to "forms of exploitation" that could include piracy.
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"It seems that a broad array of the third-party devices and services that would be enabled by the proposed rule would essentially be given access to a valuable bundle of copyrighted works, and could repackage and retransmit those works for a profit, without having to comply with agreed contractual terms," the office said in its finding.
Analysts added that the plan could allow providers to add even more advertising to the video content that would come under their control. "The proposed rule would appear to allow [third-party devices and applications] to add additional advertising as part of the programming stream, e.g., advertising spots before or after an on-demand video or banner advertising next to or overlaid on top of a program, without any requirement that resulting advertising revenue be shared with either the [cable company] or the content creator."
Democrats on the FCC proposed opening the set-top box market over objections from Republicans. Yet even the Democratic author of the proposal, FCC Commissioner Jessica Rosenworcel, has expressed skepticism in recent days and said in June that the plan has "real flaws."
The analysis issued by the Copyright Office was a response to a June request from a bipartisan group of lawmakers, including Rep. Marsha Blackburn, R-Tenn. In a Thursday statement, Blackburn said the decision served as evidence that the proposal should fall by the wayside.
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"The Copyright Office's written analysis makes clear that the FCC's set-top proposal conflicts with established copyright law and policy and would negatively impact content owners and consumers," Blackburn said. "It should now be clear that any steps to promote set-top competition, whether by regulators or the private sector, and whether relying on alternative devices or applications, must not compel transmission of copyright protected content without programmers' consent."
Other lawmakers who requested the analysis included Rep. Doug Collins, R-Ga., Rep. G.K. Butterfield, D-N.C., and Rep. Ted Deutch, D-Fla.
Republican FCC Commissioner Ajit Pai, who has been critical of the plan, similarly called on commission Chairman Tom Wheeler to change course following the analysis. "It is long past time for the FCC's leadership to walk away from its deeply flawed set-top box scheme," Pai wrote, saying the commission instead should "focus on ways to ditch the set-top box and embrace the video marketplace of the future."
The issue is expected to next arise at the agency's September meeting.