NCTA: FCC Regs Lag Competitive Market

Pushes Back on Set-Top 'Dis-aggregation,' Must-Buy Tier

The National Cable & Telecommunications Association said the video marketplace has been competitive for many years and through many video competition reports, but the FCC's regulatory regime has yet to catch up with that fact.

Add the "booster rocket" of over-the-top options, the NCTA said, and "the role for regulators is not, as some urge, to extend the scope of new and existing regulations but to ensure regulatory parity by eliminating rules and requirements designed to address circumstances that no longer exist."

That assessment came in the NCTA's reply comments for the FCC's 2016 video competition report. The NCTA sought an FCC clarification that cable systems subject to effective competition are no longer required to carry all broadcast stations on the basic tier.

The NCTA said one thing the FCC should not do in the name of boosting one form of competition -- in the set-top-box market -- is "mandatory disaggregation." It argued that "massive consumer adoption" of apps is already driving access to MVPD content on retail devices, so there is no need to create a government-issue AllVid set-top "straightjacket."

The NCTA took aim at Google and others in the Consumer Video Choice Coalition, which has been pushing a government-backed AllVid solution as a gateway to video from various sources on-air and online.

"[The] CVCC claims that disaggregating MVPD service, stripping out the MVPD’s UI and replacing it with a third-party guide, is necessary for retail success," the NCTA said. "But as DSTAC reported: 'No evidence whatsoever has been presented ... to indicate that such a guide is the recipe for success of competitive navigation devices, or that customers want the device maker to block available MVPD services.”

Instead, the NCTA added, "such an approach would force pay TV providers to re-architect their networks, rip up their programming contracts, and be subjected to another costly and counterproductive technology straightjacket – the sort of thing usually decried by Silicon Valley innovators."

The NCTA took aim at commenters who supported the FCC's regulation of interconnections (Netflix) and giving OTT services MVPD status (FilmOn). It slammed the National Association of Broadcasters's call for a "careful examination" of consolidated cable as a "tiresome harangue."

The NCTA said cable operators should no longer be required to carry broadcast stations, particularly retrans stations, in the basic tier.

"None of cable’s competitors have such an obligation, and the requirement hampers cable’s ability to compete for customers who would prefer not to have to pay for such stations," the NCTA said.

Arguably the FCC has already effectively lifted that requirement. Earlier this year it reversed the presumption that cable operators were not subject to effective local-market competition, and the NCTA noted in the filing that the FCC has said the basic-tier requirement doesn't apply to systems facing effective competition.

"While all cable systems must continue to provide 'must-carry' stations to all subscribers, and while there certainly are other outdated regulations and requirements that should be reviewed and eliminated, the inclusion of all broadcast stations on a mandatory basic tier is one of those requirements that, at least where effective competition exists, has expired," the NCTA said.