FCC Considers New Rules for Streaming Video

Published December 11, 2015

Federal Communications Commission (FCC) regulators are considering whether to redefine Netflix and other “over-the-top” (OTT) Internet services as “multichannel video program distributors,” effectively treating video streaming services as though they are cable television companies.

‘More Options Than Ever’

FCC Commissioner Ajit Pai says the OTT rules seek to solve a nonexistent problem.

“Consumers today have more options than ever when it comes to the video marketplace, including everything from new over-the-top competitors,” Pai told Budget & Tax News.

Pai says government regulations can stifle product and services innovation.

“That kind of environment, where there is no market problem to solve and private companies are experimenting with different business models, … the last thing you want the government to do is effectively to freeze in or freeze out certain business plans by applying regulations that were modeled after the marketplace as it existed 20 years ago,” Pai said.

Backfiring Regulations

Scott Cleland, deputy U.S. coordinator for communications and information policy under President George H.W. Bush, says applying obsolete laws to modern businesses causes problems for consumers.

“We have totally obsolete U.S. cable and telecom law,” said Cleland. “Cable law from 1992 assumes a monopoly. So, the problem here is the FCC, in trying to apply obsolete law to today, is tempted … and does … pick winner and losers.”

Lying in the Bed They Made

Cleland says Netflix’s past support of government regulations is ironic.

“Netflix was a leading proponent of regulating broadband companies as utilities,” Cleland said. “And so they are being caught in the web they created: the heavy-handed web of heavy-handed regulation that they pushed.

“This is unintended consequences,” Cleland said. “Netflix imagined that it could get its competitors regulated to its advantage with no risk to itself, and what is happening here is, you know, … there is blowback on companies that are saying, ‘regulate them, but never regulate me.’ … It’s crony capitalism at its worst.”

Andrea Dillon ([email protected]) writes from Holly Springs, North Carolina.

Internet Info:

James Gattuso, “FCC: Over the Top on Internet TV,” The Heritage Foundation: https://heartland.org/policy-documents/fcc-over-top-internet-tv/