WASHINGTON D.C. — Should the FCC regulate emerging online television distributors the same way it regulates cable and other multichannel video programming distributors (MVPDs)? No, say the Competitive Enterprise Institute (CEI), the International Center for Law and Economics (ICLE), and TechFreedom in comments filed this week regarding the FCC’s proposal to regulate certain online video distributors (OVDs) like Sky Angel and FilmOn X as MVPDs.

“Tom Wheeler is at it again,” said Ryan Radia, Associate Director of Technology Studies at CEI, “trying to ‘tailor’ the outdated Communications Act to do something Congress never intended. Congress clearly meant for MVPD rules to promote facilities-based competition in the video delivery market. Imposing those rules on OVDs would do nothing to enhance broadband competition — but would undermine competition in the thriving OVD market.”

“There’s just no need for the FCC to regulate OVDs, nor is there any credible defense of the rule change in the FCC’s proposal,” said Geoffrey Manne, ICLE’s Executive Director. “Imposing new regulatory burdens on the burgeoning online video marketplace would stifle or distort what is otherwise a vibrant and highly competitive industry,” Manne added.  “The existing regime, while imperfect, will allow continued experimentation and innovation in the OVD market going forward — a market completely devoid of any players with the kind of market power that deserves regulatory scrutiny,” added Ben Sperry, ICLE Associate Director.

“MVPDs receive some benefits, such as certain program access rights, but also have some notable burdens, such as syndicated exclusivity and program carriage obligations,” said Tom Struble, TechFreedom Legal Fellow. “The current rules, which regulate as MVPDs only video providers that own or control the final transmission path to consumers, offer bright-line clarity.”

“If OVDs need special protections going forward—above and beyond the antitrust laws—it’s Congress’s responsibility to intervene as part of its ongoing effort to update the Communications Act,” concluded Radia. “But if the Commission persists in trying to rewrite Congress’s definition of MVPDs, it should cover only those video providers that are eligible for compulsory content licensing under the Copyright Act.” This proposal, while perhaps novel, is the only workable scheme for OVD regulation that fairly gives effect to what Congress’s intended in both the Communications and Copyright Acts.”

Radia, Manne, Struble, and Sperry are available for comment at media@techfreedom.org.

Find/share this release on Facebook or Twitter, and see our other work on related issues, including:

  • The Future of Video Marketplace Regulation, Congressional Testimony by Geoffrey Manne
  • The Future of Media: Is Government Regulation In Today’s Media Landscape “Over-The-Top”?, Panel Discussion with Ryan Radia
  • Amicus Brief of CEI and ICLE, in ABC, Inc., et al. v. Aereo, Inc., U.S. Supreme Court
  • How the Court’s “Looks-Like-Cable-TV” Test in Aereo Protects the Cloud, Blog Post by Geoffrey Manne, Ben Sperry & Ryan Radia
  • Why the Supreme Court’s Aereo Decision Protects Creators Without Endangering the Cloud, Blog Post by Geoffrey Manne, Ben Sperry & Ryan Radia

About CEI:

The Competitive Enterprise Institute is a nonprofit public interest organization dedicated to the principles of limited constitutional government and free enterprise.

About ICLE:

The International Center for Law & Economics is a non-profit, non-partisan research center aimed at fostering rigorous policy analysis and evidence-based regulation.

About TechFreedom:

TechFreedom is a non-profit, non-partisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.