In a speech on media policy issues, ranking House Energy & Commerce Committee member Frank Pallone (D-NJ) outlined the risks of the FCC’s pending rulemaking proposal to redefine over-the-top (OTT) online video service providers as multichannel video program distributors (MVPDs). Pallone stated: “until we all better understand the ultimate impact on consumers, the FCC should avoid adopting sweeping new regulation.”
Pallone presented his views last Friday through a remote connection to an audience gathered at the Duke University School of Law. With the goal of extending broadcast program access and carriage rights to OTT providers, the FCC has proposed amending the MVPD classification by eliminating requirements for “facilities-based” service. FCC Chairman Tom Wheeler is expected to schedule a final vote on the amended rule this fall. Although Wheeler has stated that such a move would enable “Internet-based linear programming services to develop as a competitor to cable and satellite,” Pallone told his audience that he has received no complaints from constituents about an absence of program choices online, as “consumers are beginning to have more programs to choose from, more ways to get them, and more options on prices.” While acknowledging that “some have urged the FCC to help prop up some video business models through additional regulation,” Pallone questioned whether such regulation is necessary since “consumer demand . . . has driven the market to create new business models and new ways to distribute programming.”
As such, Pallone advised the FCC against proceeding with its rulemaking proposal, emphasizing that, “when it comes to adopting new policies, we all must ask ourselves whether new policies actually make people better off.” Pointing to the technological advancements and innovations that continue to redefine the video marketplace, Pallone said, “we cannot know what business models consumers will prefer [and] we cannot know yet how to craft the proper consumer protections.” Cable, broadcast and OTT industry officials offered no comment.