Internet TV Impacts How Lawmakers, Media Industry Perceive Current Broadcast Regulations, Say Media Experts
The advent of online content is causing the media industry and policymakers to assess whether there is a need for regulation in that space, some media professionals said Friday on Capitol Hill at an event hosted by the Congressional Internet Caucus Advisory Committee. So far, programming through the Internet is flourishing amid discussions around proposed and existing regulations like the FCC program access rules and the Video Privacy Protection Act, they said.
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There’s a problem “that’s developing in this country because we have very heavily regulated markets converging with very unregulated markets,” said Adam Thierer, a technology research fellow at George Mason University. Every time there’s an innovation or new opportunity that develops in mass media, it’s viewed as a threat that needs to be controlled or regulated, he said. “Washington has been trying to put its thumb on both sides of the scale when it comes to television marketplace regulation.” The Internet likely will be encumbered with current regulations, “unless we clean up the mess from the past,” he said. Comprehensive reform in media and copyright are needed, Thierer added: “If this does not happen, we are not going to be able to create a firewall between new media … and the old world because they are converging very, very rapidly.”
Some regulations, like program access rules, have helped the market, said John Bergmayer, a Public Knowledge senior staff attorney. “It’s very unlikely that we'd have Dish or DirecTV without program access rules.” AMC’s Mad Men is primarily funded by cable subscription fees, he said. Cable allows it to be available on Netflix “because it’s more of a complement,” he said. Netflix may compete with a cable on-demand service, but not with cable’s core offering, he added.
Proceedings on Capitol Hill, like the reassessment of the Cable Act, support the notion that the current media marketplace is very different from the 1990s marketplace, said Howard Symons, a Mintz Levin communications attorney. “The danger is that there will be a strong incentive to create parity by regulating up.” At hearings this summer, “that view has been expressly put forward,” he said. But “there are interests that say regulate up instead of deregulate down,” he said.
The video marketplace has some rules that should be washed away, like ones designed to protect local broadcasting from competition from cable, Bergmayer said. But “some of those regulations are specifically designed to promote competition and they have worked,” he added.
Symons cautioned against comparing the current online video marketplace with the broadcast industry of the 1990s: The industry should avoid arguing that “the ‘90s are the same as the teens. … Just as the satellite industry needed program access to flourish in the ‘90s, we're told that the online business needs program access to flourish in the 21st century.” Netflix has more subscribers than any multichannel video programming distributor, he said. Online platforms have already begun developing their own programming, “so you can already see the beginnings of real competition in the absence of these rules,” he added.
Andrew Schwartzman, a media policy attorney, cautioned against keeping MVPDs out of a regulatory regime. In 1992, cable was on the verge of becoming a monopoly, he said. “Now cable is on the verge of becoming a monopoly in the wired space again,” he said. “Because they can’t offer Internet, the satellite services are also topped out and are starting to lose customers and cable is picking up customers and bundling services.” The notion that “we can just wipe everything off just isn’t practical,” he said. “You have to deal with this package of rights and stakeholder interest and try to figure out what’s best for the public. … Wiping away everything is going to ratify the increasingly powerful interests’ stakes and allow them to move towards monopoly.” Customers don’t prefer bundling, Schwartzman said. “We can move towards a la carte availability so you don’t have to buy 112 channels in order to get the NFL Red Zone programming."
With the availability of online content, customers don’t want pay-per-view, said Richard Bennett, a broadband and Internet research fellow at the Information Technology & Innovation Foundation. They're happy with paying a monthly fee to Netflix or DirecTV “and then choosing from whatever inventory they offer,” he said. As a normal means of watching TV, “you don’t want to be feeding the meter every 60 minutes for another hour’s worth of programming,” he said. The cable industry is in a golden age, he said. “There’s more original programming being created now for distribution over cable systems than has ever happened before.”