Lobbying for an Unlevel Playing Field

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I pointed out last week that Sony is eager to foist new regulations on cable, satellite and telco TV providers — forcing them to make all of their programming and related data available over a common, IP-based interface — while Sony itself continues to enjoy the privilege of offering content exclusively through its own devices (see The Weird Double Standard of AllVid’s Boosters).

Another pro-AllVid party, consumer-interest group Public Knowledge, also is energetically pushing for a double standard.

In January, Public Knowledge staff attorney John Bergmayer wrote that the conditions attached to the Comcast/NBCU deal established a precedent that “online video distributors ought to be treated the same as rival cable or satellite program distributors (who, by law, are required to share their programming with each other, to ensure that content exclusives don’t entirely foreclose competition).”

That much seems reasonable: NBC should have to make programming available to, say, Netflix or Apple on terms similar to how it’s offered to DirecTV or AT&T, under the right set of circumstances (see Comcast/NBCU Celebrate Government Deal Approval).

But when it comes to AllVid, Public Knowledge wants to keep the old distinctions.

In a post last Friday Bergmayer averred that online video distributors like Netflix and Amazon should not be considered MVPDs for the purposes of an AllVid regulation.

Why, in this case, should MVPDs like cable and satellite TV providers be treated differently? Here’s the explanation from Bergmayer:

Cable companies built their empires by getting laws passed in communities around the nation that made it illegal to compete with them, and they run their wires over public property. Satellite TV companies are given exclusive licenses to parts of the airwaves — you need permission from the FCC to even think about competing with them. And both of them are given special privileges under the law — for example, broadcasters have to negotiate with them for ‘retransmission’ agreements. Internet-based video services — none of which offer the scope of programming offered by old-line pay TV systems yet — do not have these privileges. It is entirely justified to treat cable TV differently — which is why Congress passed a law that requires the FCC to enact something much like AllVid.

It’s not clear to me how setting up this unfair playing field to shackling “old-line pay TV” providers indefinitely to an AllVid requirement would help anyone except the Sonys, Apples and Boxees of the world. CE manufacturers would be able to tap into premium TV content and then “reskin” it with their own user interfaces and ads, without needing to strike their own distribution deals, getting a free ride on the coattails of the incumbent MVPDs.

Meanwhile, the market is changing rapidly.

Netflix, for example, already has 20 million subscribers. As Bergmayer even asserted in his earlier post, “for some consumers, online video is already a substitute for their TV subscriptions, and unless the current media giants have their way, as time goes by more and more viewers will find that they can get all the content they want online.”

So if forcing cable or satellite operators to open their video services via an FCC-mandated technical standard is in the public interest, why isn’t it also in the public interest to require Amazon, Apple or Netflix — which, as Bergmayer acknowledges, could someday become many consumers’ exclusive source for video — to do the same thing?

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