At its Open Meeting on Thursday, the FCC voted along party lines to require facilities-based video distributors – that is, cable and direct broadcast satellite (DBS) providers, but not upstart competitors that stream their content over the public Internet – to present an "all-in" price on their customer bills and in advertising materials. Republican Commissioners Brendan Carr and Nathan Simington issued Dissenting Statements exposing the agency's general lack of statutory authority to impose such obligations.
The Commission's pending proceeding exclusively targeting cable and DBS billing practices, in which Free State Foundation President Randolph J. May and I filed comments and reply comments, similarly singles out traditional multichannel video programming distributors (MVPDs) for additional regulatory burdens wholly lacking statutory authority even as they struggle to compete with streaming services like Netflix, Hulu, YouTube, Amazon Prime Video, and Disney Plus, among many others.
Commissioner Simington in his Dissenting Statement emphasizes this concern, writing that:
[W]e are yet again adding additional regulatory burden and complexity on an industry that is shedding customers by the millions. Traditional linear video is on the way out, but we don't have to shoo them away like the last guest who hasn't gotten the hint that the party's over. For every mote of regulatory complexity we add to legacy providers, unregulated online video providers become more nimble by comparison.
Commissioner Simington also finds fault with each source of statutory authority relied upon by the majority in the as-yet-unreleased Order. Notably, he calls out the fact that (1) the FCC's limited power pursuant to Section 632 to impose customer service requirements not only presupposes the existence of a provider-customer relationship (and thus does not extend to promotional materials targeting potential customers) but also is constrained heavily by the Television Viewer Protection Act of 2019, and (2) Section 335(a) – incidentally, the same DBS-specific provision relied upon in the billing practices NPRM referenced above – "relates essentially to the provision of political programming."
In his Dissenting Statement, Commissioner Carr similarly questions the agency's statutory authority to act, conceding that "[o]nly in the case of cable billing does that authority arguably exist." And where Commissioner Simington characterized the majority's misguided reliance upon Section 4(i) ancillary authority as "[t]he authority of the gunslinger," Comissioner Carr describes it as a "Hail Mary [that] falls incomplete."
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