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The Other Reclassification: FCC Action on MVPDs Could Increase Online Video Competition

You may be forgiven if, given all the attention given to the FCC’s decision to classify broadband as “telecommunications” under Title II of the Communications Act, you missed that the FCC was also considering another “reclassification,” of a sort. Specifically, the FCC is considering allowing online services to operate as “multichannel video programming distributors,” an action that could benefit consumers and competition by opening up the video marketplace to new entrants, and paving the way for online services to offer the same kinds of channels that are available today only through traditional pay-TV services like cable and satellite. Yesterday, Public Knowledge filed comments supporting the FCC’s proposed action, which could increase consumer choice while bringing down prices without subjecting most kinds of online video services to additional regulation.

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More Reports of Technology Giants Interested in Internet TV Show That the Problem Isn’t Technology

Technology isn’t holding back Internet TV—the structure of the media industry is.


Rumors of Intel’s and Apple’s interest in launching some kind of online cable service have been circulating for months. Years, even. It’s clear that major tech companies have the technology ready, and they’ve been making phone calls and taking meetings. People talk, reports get written. Now, we can add Google to the mix. As the Wall Street Journal first reported, it’s interested in launching some kind of online TV service, too—one that is intended to actually substitute for a traditional pay TV subscription by having current, popular shows from both cable and broadcast channels, and not just supplement it with on-demand access to a back catalog or user-generated content.

So with all these rumors, and all these giant tech companies involved, why haven’t we actually seen a service get launched? The technology’s ready. Other countries already have online cable TV–Sweden’s Magine, a company that outright says “We’re meaning to replace your cable network,” is expanding internationally. Why doesn’t the US?

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More Confirmation That Incumbents Restrict Online Video

New comments by Time Warner Cable CEO back up what we already knew—incumbent companies are holding back video innovation.


It’s puzzling to many observers why so many programmers don’t make their content more widely available online. It seems like programmers are leaving money on the table. Shows that are available online are talked about more, watched more, and pirated less. Viewers are demanding easier access to shows that is not tethered to their home and does not require a cable subscription, yet the market is not delivering it. Why is this?

There are two big reasons. The giant content companies have a symbiotic relationship with cable. They sell programming exclusively to cable (and satellite) and charge a lot for it. This forces cable companies to raise their bills but, since they’re the only source of programming people want, they’re able to. There’s nowhere to switch to. Only now, as cable bills are reaching unsustainable levels and cable companies are seeing that online video has the technological potential to become a competitor to cable, are some cable companies finally objecting publicly.

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Retransmission Consent: Yep, Still Broken

Our country’s absolutely ridiculous “retransmission consent” system continues to distort the video marketplace. This is the set of arcane rules that give local broadcasters (and not copyright holders) the right to decide whether cable systems (and IPTV and satellite providers) can carry their programming. A system that should be about connecting creators to viewers instead empowers middlemen who collect money from both sides. It’s not that distributors and other kinds of middlemen have no place–far from it. But they should add value, and be compensated accordingly.

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Congress Considers Updating 20-year-old Rules, Witnesses Squabble

Congressional Committee hearings have the tendency to come across as a bit dry at times [read, a lot of the time].  Members of Congress attempt humor that falls flat, drop references to their local sports team, and respectfully disagree with their colleagues about legislation or Constitutional interpretation.   The witnesses provide testimony from the perspective of their organizations/industries, take subtle jabs at the opposing position, and answer Members’ questions, or listen to Members use the majority of their question time to make drawn out positions statements.

However, yesterday’s Senate Commerce hearing on “The Cable Act at 20” was different.  It became so feisty at one point that I expected popcorn and soft drinks to go along with the entertainment. 

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