ANA to FCC: Cable-Box Competition Is Bad for Advertisers

Group Says New Set-Top Boxes Would Allow Ad Alteration, Ad Blocking

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Saying it would allow blocking and alteration of advertising, the Association of National Advertisers has asked the Obama administration to drop a proposal that would open the door to cheaper competitors to cable company "set top" boxes that deliver video content.

The Federal Communications Commission new set-top rules would require cable companies to provide their video services to companies like Google and TiVo, who would then create their own hardware and software to deliver cable content.

But the ANA, in public comments filed with the FCC on Friday, said the new rules would make advertising vulnerable to blocking and to alterations by third parties and would not require the new content providers to honor advertising contracts.

"Right now we have contracts with cable operators and programmers that determine when an ad is going to run, how it's going to run and spell out the remedies if those agreements are not met. But the new rules would eliminate those protections," said Dan Jaffe, a lobbyist for the ANA. "It's an enormous problem."

Mr. Jaffe also said that advertisers would find it difficult, and more expensive, to verify if their ads ever ran or tell if an ad has run correctly.

"Their (legal) rights would be severely attenuated" because advertisers would not have contracts with the new content providers, Mr. Jaffe said.

The ANA said it is "not arguing for or against any particular technology or navigation device."

"Rather, we want to ensure that whatever technologies are used, a fair marketplace exists in which advertising interests are protected and where the financial underpinnings for content creation are not undermined," Mr. Jaffe said.

In its filed comments, the group argued that advertising plays "an important role in content creation, programming availability, and cost to consumers for such content" and that the rule change would "will jeopardize advertising's many contributions to the economic and other interests of the public."

Because the new rules would also hurt the ability of cable giants like Comcast and Time Warner Cable to continue to rent subscribers traditional cable boxes, the cable industry is also pushing back on the proposed new set-top rules.

Meanwhile, Google has argued the intent of changing the federal regulations is to "unleash competition in the retail navigation-device market" and drive down costs.

The FCC will continue to consider reaction to its proposal for another 30 days and is expected to make a final decision on whether or how to change the set top rules later this year.

Separately, the ANA has been pushing back against the FCC's proposed privacy regulations for internet service providers, asking it to take more time.

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