There is a consensus that regulators should welcome new technology and foster innovation rather than favoring one technology or business model over others. The FCC is at risk of violating this principle as it considers mandating NextGen TV for broadcasters. Doing so would stymie the ongoing competition between different standards in return for adopting an unproven and costly approach.
As former FCC Commissioner Michael O’Reilly recently argued in a Perspectives from FSF Scholars, there is no need for the FCC to mandate a standard now. Although NextGen TV promises several features, including better picture quality, interactive content, and targeted advertising, it is not clear that it is delivering them yet. Mandating NextGen TV now may commit the Commission to the high costs and slow adoption rates characteristic of an unproven technology.
Meanwhile, the market for innovation is working. Companies are experimenting with different distribution technologies including streaming, 5G, and NextGen TV. Some broadcasters are voluntarily adopting it in a constant search for better distribution systems, showing that success is possible. What broadcasters need to do now is to capture users by providing an enhanced viewer experience.
A mandate would also impose significant cost on others. Providers of cable and satellite service would have to purchase new equipment. Consumers would need either new televisions or an antenna capable of converting the new over-the-air signal to the old one. The Commission would have to require TV manufacturers to adopt the new standard. This is true even though the vast majority of viewers don’t rely on over-the-air signals.
Another basic principle is that regulations should not favor one technology over others, or one set of competitors over another. Yet mandating NextGen TV would advantage broadcasters over cable and satellite providers. Rather than having to compete for viewers, the Commission would basically deliver captive viewers to broadcasters.
The benefits of future technologies are often difficult to envision. But the constant demand for improving consumer experiences is a very strong motivator. As the regulator of one of the economy’s most innovative sectors, the Commission should encourage this process rather than short circuit it.
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