SANTA MONICA, CA – The Federal Communications Commission’s plan to open the set-top box market to competition offers savings to consumers, but should not be enacted unless a Pandora’s box of privacy issues are resolved with robust privacy protection regulations, Consumer Watchdog said in comments just filed with the agency.

“There are great potential consumer benefits in unlocking the set-top box market, but only if the Pandora’s box of privacy concerns is shut with the enactment and enforcement of robust privacy regulations,” said John M. Simpson, the public interest group’s Privacy Project Director.

Read Consumer Watchdog’s comments here:

“For too long pay-TV services, also known as multichannel video programing distributors (MVPDs) such as Comcast and DirectTV, have largely required that set-top box navigational devices subscribers use to access their programming must be rented from them,” Simpson said in his comments to the FCC.  “Because MVPDs generally exercise near monopoly power in their respective markets, this requirement has kept set-top box prices artificially high and hurt consumers.”

Just as the FCC’s 1968 Carterfone decision broke AT&T’s stranglehold on telephone equipment and spurred innovation, competition and lower prices, all to the benefit of consumers, Consumer Watchdog expects the Commission’s new set-top box rules will spark innovation and lower prices.

Consumer privacy protection, however, will require strong action. Current law prohibits cable and satellite TV providers from using information about the viewing habits of a subscriber without the subscriber’s permission.  Current advertising practices by the providers, however, indicate that cable and satellite TV providers may be actively circumventing the rules.

“Consumer Watchdog calls on the Commission to immediately investigate the MVPDs’ practices and take necessary enforcement actions where warranted,” Simpson said. “The strictly enforced rules applying to satellite and cable TV providers must also be applied to third-party set-top box manufacturers.”

Consumer Watchdog said the set-top box rules should:

-- Leave it to the consumer to decide whether set-top box data such as viewing history is gathered and shared.  

-- Only be allowed when explicit, informed opt-in written consent is given.

-- Require third-party set-top box providers to explain clearly how they will use the data, with whom it will be shared and for what purposes.  

-- Not allow set-top box use to be contingent upon acceptance of sharing of viewing data.
Consumer Watchdog also said third-party navigation device manufacturers must publicly pledge to honor privacy rules that apply to cable and satellite TV providers.  This would mean the Federal Trade Commission could also enforce any privacy violations.

“The FCC would also have jurisdiction and presumably the Video Privacy Protection act would protect the privacy of a consumer’s viewing history,” Simpson said. “When it comes to protecting consumers, the more cops on the beat, the better.”


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