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Net Neutrality Ruling – A Slippery Path to Internet Video Regulation?

Yesterday's FCC meeting on Net Neutrality was entertaining, given it was truly one of the more partisan events at that agency in a long time. The key question at the end of the meeting was whether the new rules will lead to market stability or uncertainty and litigation. There are some hopeful signs, such as this post from the American Cable Association (ACA), praising the balance of the approach, while suggesting the open docket regarding Title II regulation of broadband providers be closed.  On the other hand, Verizon believes that the FCC is overreaching in their statutory authority with regards to the proposed rules; .

Underpinning the FCC’s argument as to why they can regulate is section 706 of the 1996 Communications Act which, “directs the FCC to ‘encourage the deployment on a reasonable and timely basis’ of 'advanced telecommunications capability’ to all Americans.” They go on to say that in July 2010 the FCC concluded that the deployment of broadband is not reasonable and timely, triggering section 706(b); the basis for their ruling.

They rely on Title II for protecting VoIP services, Title III for ensuring open Internet in wireless and Title VI for promoting competition in video services. Title VI is the power Congress gave the FCC to regulate and ensure competition among cable television providers (now known as Multichannel Video Program Distributors – MVPDs).
My question for the lawyers out there in the Viodi View audience is:

Could the justification of Title VI as a way to protect internet video providers from being discriminated against by MVPDs also be used as a basis for regulating those very same internet video providers?

That is, could the FCC use Title VI to mandate that internet video providers support things such as must-carry, closed captioning, obscenity, advertising limits, etc.?1 I may not be the only one thinking that this is a possibility, as I have noticed an uptick in views of an article, that I wrote a couple of years ago, on proposed legislation that would have had regulated Internet Video; of course the interest in my other article may have to do more with the image of Charlotte Ross.  

If I am right, advocates for unregulated internet video may have gotten more than they wanted.  

What do you think?

1Interestingly, at the same meeting regarding Net Neutrality, the FCC did approve a plan for a Next Generation EAS that moves beyond the phone and embraces broadband and wireless. 

Author Ken Pyle, Managing Editor

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7 responses to “Net Neutrality Ruling – A Slippery Path to Internet Video Regulation?”

  1. Paul Feldman Avatar
    Paul Feldman

    Hi Ken.  Interesting question.  The FCC has in recent years expanded their view of their authority under Title VI  (specifically Section 628) in order to regulate MDU exclusivity agreements and to limit the impact of the terrestrial exemption to program access.  The latter is currently subject to court appeal.   However, while nothing is imposssible,  I think that it is unlikely that the FCC would attempt to regulate OTT video as a cable system, including requiring must-carry.   It would be challenging for the FCC to try to fit an OTT provider into the statutory definition of "cable system," especially in light of court precedent that such systems must provide video in a manner similar to that provided in 1984 (when the Cable Act was enacted).  But, this issue may be litigated anyways, in connection with the OTT providers who are claiming to be cable operators in order to get the mandatory cable copyright license.
    Paul Feldman
    Fletcher, Heald & Hildreth

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  2. Ken Pyle Avatar
    Ken Pyle

    Paul, thanks for your insight.  I agree that it is probably a long-shot that OTT would be regulated with this as a justification, although the politics could get very interesting, depending upon what was being regulated.  
    The obvious case of regulating OTT video providers that are claiming to be cable-like providers, such as IVI, didn't occur to me when I thought of the above question.  Even though I mention must-carry, my thought was that the rules would be used selectively (e.g. applying TV ratings to programming on the Internet, etc.).  On the other hand, maybe most of the rules that really matter to a video producer/distributor would come from the FTC and not the FCC. 

    Reply
  3. Alan Weissberger Avatar
    Alan Weissberger

    Ken, Thanks for following my suggestion to post something original – that other pundits have overlooked.   Your key question for attorney's is spot on: "FCC use Title VI to mandate that internet video providers support things such as must-carry, closed captioning, obscenity, advertising limits, etc.?1"

    I have been watching quite a bit of Internet video sporting events lately.  There is a lot of advertising on the free Internet channels, but not on the paid channels, e.g. NBA League Pass Broadband. 

    I'd like to see the FCC place limits on advertising of all Internet video, but I don't think they have the guts to do so.  This latest FCC net neutrality decision was supposedly a compromise, but judging from the blogs I've read, it hasn't satisfied anyone.  IMHO, the FCC needs to take a stand and stick to it.  Not waver or fudge, e.g. they imply the wireless Internet is and open playground thanks to Android.  But Android is totally controlled by Google.  More honesty and pragmatism from FCC is urgently needed at this time!

    Reply
  4. Ken Pyle, Managing Editor Avatar
    Ken Pyle, Managing Editor

    [Editor's Note: here is an excerpt from an email sent to me by a Washington inside who requested his comments be added anonymously to this string.]

    Personally I think as video goes more IP/OTT, more regulations will inevitably follow, one way or the other. 
    Another personal thought, which many in the industry disagree with (or feel that I’m over-reaching on) is how 706 can help justify retrans consent.

    Here’s the logic (such as it is):

    The FCC now says that broadband deployment is not reasonable or timely (according to the latest 706 Report).
    Whether one agrees with that assessment or not, that finding gives the FCC the authority to take steps to encourage investment and deployment under 706.

    The biggest driver of broadband adoption is bundling it with video.  Among the biggest barriers to new MVPDs entering the market (and providing the video competition called for by the ’92 Cable Act) is retransmission consent.

    SO – even if the FCC is correct that it doesn’t have the authority under the '92 Cable Act to thoroughly revamp retrans consent (I think they clearly have the authority) – they could do it under 706 in order to encourage deployment and investment in broadband."

    Reply
  5. Ken Pyle, Managing Editor Avatar
    Ken Pyle, Managing Editor

    Interesting article from the Jamadots newsletter suggesting that 1 in 5 Americans would like the FCC to regulate the Internet the way they currently regulate TV.  

    Reply
  6. Ken Pyle Avatar
    Ken Pyle

    From the 12/13/11 Morning Bridge,

    “French ministries of culture, industry and digital say new television regulations will need to be developed as access to unregulated internet content increases.”

    Another pointer towards a world of regulated content over the Internet.

    Reply

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