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Don’t Force-Fit Legacy Cable Rules to Online Video

4/06/2015 8:00 AM Eastern

The Federal Communications Commission is proposing to bring Internet-based streaming video services within the scope of its legacy cable regulations, and reply comments have just been filed. Specifically, the FCC seeks to redefine the legal meaning of the term multichannel video programming distributor” — MVPD — to include subscription-based online video distributors, or OVDs. According to the FCC, its proposed changes would take stock of new video competition from online services, such as Netflix or Amazon Prime Instant Video.

 

But the FCC’s new-wine-in-old-wineskins approach to video regulation raises profound law and policy issues. The text of the Communications Act appears to foreclose the agency making such a change. Extending regulations based on early 1990s assumptions about cable monopolies to the dynamic Internet is also dubious. And such a redefinition of terms raises serious First Amendment questions.

 

If anything, the FCC’s move should prompt Congress to act with greater urgency in bringing about the reforms that are truly needed. Congress should adopt a simplified marketbased framework for video services that treats competition, rather than regulation, as the norm.

 

The FCC proposes to redefine the Communications Act’s term for “multichannel video-programming distributor” — or MVPD — by including within its scope “services that make available for purchase, by subscribers or customers, multiple linear streams of video programming, regardless of the technology used to distribute the programming.”

 

In particular, the FCC proposes extending to OVDs the ostensible benefits of program access regulations enjoyed by MVPDs. Program access regulations limit the ability of MVPDs to withhold satellite programming from competing video distributors. They are intended to ensure that MVPDs that also own video programming make their programming available at wholesale for their rivals to sell at retail to subscribers. Program-access regulations thereby impose restrictions on free market entrepreneurship and decisions about protected speech content. The FCC suggests expanding such regulations will spur further video competition.

 

The FCC’s MVPD redefinition proposal should prompt Congress to comprehensively reform the outdated federal video services regulatory policy. Congress should regard competition rather than regulation as the norm, seek to treat all video providers equally and respect First Amendment freespeech strictures.

 

Seth Cooper is a senior fellow at the Free State Foundation, a Rockville, Md.-based nonpartisan think tank.

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