Commenters responding to an FCC public notice on the status of competition in the U.S. video market cited rising program costs in urging the FCC to promote competition through reform of the retransmission consent regime. Filed with the FCC last Friday, the comments will form the basis of the FCC’s upcoming seventeenth report to Congress on video competition. Declaring that the goal of the report is “to enhance our analysis of competitive conditions, better understand the implications for the American consumer, and provide a solid foundation for Commission policy,” the FCC said it would utilize an analytical framework that examines online video distributors (OVDs) alongside broadcast television stations and multichannel video program distributors (MVPDs), which include cable companies and providers of direct broadcast satellite services.
Pointing to the growth of online video services, which “has spawned a huge and ever-expanding array of new entrants into the video marketplace,” the National Cable & Telecommunications Association (NCTA) told the FCC that “competition . . . is more vibrant than ever.” NCTA also argued that “the amount, quality and diversity of programming available to consumers—and the diverse ways in which MVPDs, program networks and others are making such programming available to consumers—is greater than ever.”
The American Cable Association (ACA) lamented that increased program costs and other factors “are contributing to small cable operators closing systems and departing from markets” as evidenced by FCC figures which show a decline in the number of U.S. cable operators between the 15th and 16th annual competition reports. Echoing concerns raised by the ACA, rural broadband association NTCA called on the FCC to rein in program costs by (1) prohibiting program vendors “from requiring rural MVPDs to pay for undesired programming to gain access to desired programming,” (2) allowing small and mid-size MVPDs “to request the same prices and conditions from any of the other existing retransmission consent agreements that a broadcast station has entered into with other MPVDs,” and (3) bar mandatory broadband tying “where rural MVPDs must pay per-subscriber fees for non-video broadband customers.”
NTCA further urged the FCC to “monitor the market for ‘over the top’ web-based video services to ensure that exclusive arrangements do not prevent rural MVPDs and broadband providers from gaining access to certain web-based video content.” Verizon added that the FCC “should ensure that its program access rules remain available and useful” as “competitive video providers, including over the top video distributors, need reasonable access to must-have programming to field meaningful alternatives for consumers.” Citing the ability of consumers to watch broadcast, MVPD, and online video programs “over a broad range of devices,” Verizon also told the FCC that “technology mandates . . . are simply no longer needed.” The National Association of Broadcasters, meanwhile, advised the agency to “take immediate steps to update its ownership and attribution rules and permit broadcasters to realize economies of scale and scope,” given that “broadcasters compete head-to-head with the increasingly consolidated pay TV industry and growing numbers of [OVDs] for viewers, advertising dollars and investment capital.”