Wednesday, October 16, 2019

Online Video Offerings from INCOMPAS/DISH TV Bolster the Case Against Local Cable Rate Controls

On October 15, it was reported that INCOMPAS and DISH NETWORK have entered into a Retail Partner Program agreement to provide nationwide video service offerings, including video services comparable to cable multi-channel video programming distributor (MVPD) services. According to reports, INCOMPAS members will resell DISH TV's video services, making them available via broadband connections to INCOMPAS subscribers. This market development demonstrates the competitiveness of the video market and it bolsters the case against outdated local cable rate controls. 

My October 11 Perspectives from FSF Scholars paper, "FCC Action Would Finally Eliminate Local Cable Rate Regulation," explained why the Commission should adopt its proposed LEC "effective competition" order. Local rate regulation of basic cable tier services and equipment shouldn't exist in today's competitive video marketplace, which includes nationwide direct broadcast satellite (DBS) services and over-the-top (OTT) online video services. Based on the Commissions' "LEC test," the proposed order would eliminate local cable rate controls in the few geographic areas where they are still enforced. 

The Commission's proposed order is scheduled for a vote at its public meeting on October 25. The order is prompted by Charter Communications' petition requesting the Commission to find that AT&T TV NOW's nationwide offering of streaming video service via broadband Internet facilities is comparable to cable services and provides effective competition to cable systems in certain Massachusetts and Hawaii localities. My Perspectives paper sets forth some positive results that would obtain from the Commission's adoption of its proposal. 

The Commission's "LEC test" requirements aside, the INCOMPAS/DISH TV announcement goes to show that today's video marketplace offers consumers competitive choices. Legacy cable regulation based on early 1990s analog- and VCR-era market assumptions, including local cable rate regulation, provide no discernable benefit to consumers in 2019's video landscape. Local cable rate controls ought to be scrapped.