The Future of TV Coalition Protecting consumer choice, not special interests, in video

Protecting consumer choice, not special interests, in video

Alfred Liggins   •   The Tennessean   •   December 3, 2015

For decades, the political left and right have been deadlocked in an intractable debate about the proper role of government regulation in our economy.  From the environment to health  care to Wall Street, the debate about how and when government should regulate private industry is at the fulcrum of American civics.

But if there is one view that has united both sides of this divide, it is the idea that where competitive markets are functioning well, government regulators should keep their hands off.

This is what makes so odd the effort by some special interests to regulate the television industry despite the fact that nearly everyone agrees that the video market is competitive and, if anything, producing more content than consumers can keep up with.

New services such as Roku, Apple TV, Amazon Fire, and Google Chromecast have all hit the marketplace delivering all kinds of app-driven content to consumers.  Programmers are now using apps to stream news, entertainment and sports directly to consumers, and new offerings like SlingTV are empowering cord-cutters.

Satellite and cable companies are using new technologies like TV Everywhere to stream to consumers on an anywhere, anytime basis.  There are literally 460 million devices in consumers’ hands today that can navigate all these technologies and services.

So if the market is working, why are companies like TiVo and a few Internet giants demanding the FCC pass new regulations —sometimes called “AllVid” regulations — for the television industry?  Because these proposed rules would allow them to poach the programming rights negotiated by pay TV companies and others.

The demand for new regulations is not about improving the market at all.  It’s pure regulatory arbitrage — a sweetheart deal that would allow these companies to lift the programming rights and distribution deals negotiated by others, disregard and upend many of their central terms, and repackage them so they can make a profit selling the underlying television content to consumers.

The tech giants argue — with a straight face — that this tech mandate is needed to create choice and competition in how consumers get and navigate their various packages of television programming.

Simply put, that argument is out of touch with reality.

The idea that we need government rules to bring competition to a thriving television marketplace is like saying we need a law to get more people to use a smartphone.

And, like most sweetheart deals, it’s the public with the most to lose if the special interests win.

American viewers have an insatiable appetite for high quality, entertaining, and thought provoking content. Producing such shows depends on the economic symbiosis between creators and distributors.

The proposed AllVid mandate would undermine that partnership, as distributors will be forced to reconsider what they pay for programs that can be siphoned off, repackaged and resold, drying up the revenue needed to underwrite quality shows.

And the revenue impact is only part of the story. Television programmers depend on the integrity of licensing and distribution deals to produce their shows. These arrangements — including critical terms such as channel placement, advertising, scheduling, and more – are the lifeblood of the video marketplace today.

But a government mandate that enables AllVid special interests to pick and choose which of these terms to follow would do severe damage to the programming ecosystem, and in particular, niche and minority-focused networks.

Take one small example. When our network, TV One, is placed near similar channels or other popular programming, it increases the odds that channel surfing viewers will come across our network and give it a try. That’s critical for a niche network like ours, and distribution agreements are vigorously negotiated around such benefits.

But the AllVid mandate would allow the Internet insiders to ignore these and other terms – a new form of digital “redlining” that could bury diversity programming in the farthest reaches of the program guide.

Allowing AllVid special interests to raid the programming ecosystem in this way could cause the “Golden Age of TV” that everyone celebrates today to collapse – and smaller, independent and diverse networks will likely be the first ones left behind.

AllVid rules were already considered and abandoned by the Obama FCC in 2010 because they are so obviously unfair and destructive.  It is impossible to imagine the government considering such an approach in any other industry.

It would be like forcing Amazon to make all its books, products, movies, and music available for free for any other website or competitor to resell – all in the name of creating competition where it obviously already exists.

We as a society face many challenges where the government can be a positive force for change. But the thriving video market is hardly one area that needs fixing.

Alfred Liggins is the CEO of TV One.

See the original article at: The Tennessean