Showing posts with label Broadcast TV. Show all posts
Showing posts with label Broadcast TV. Show all posts

Wednesday, March 11, 2026

Consumer Choice in Sports Proves that Video Competition Abounds

On February 25, the FCC's Media Bureau released a public notice seeking comment on "current and emerging trends in the distribution of live sports programming." With a particular focus on football, the item longs for a bygone era – and, what's more, views it through rose-colored glasses. Indeed, it seems to presuppose a time when football fans had free access to every game played. In other words, gridiron glory days that never existed.

Setting to the side, at least for the moment, the significant legal authority questions posed by the notice, I submit that, rather than a basis for concern, the current state of live sports carriage demonstrates that video programming distribution is highly competitive; that consumers derive substantial benefits, including expanded viewing options, as a result; and that any impact on legacy business models is an inevitable and necessary consequence of the welcome transition to a broader marketplace defined by abundant choice.

As the notice recalls, "[f]or decades, Americans have enjoyed turning on their television sets and quickly finding the games they wanted to watch for free on an over-the-air broadcast." Let us not forget, however, that a primary driver of that simplicity was a lack of choice. Consumers typically had access, via broadcast network affiliated local television stations, to a half dozen (give or take) NFL games on Sunday as well as Monday Night Football.

Until the launch of the NFL Sunday Ticket subscription service in 1994, that essentially was the whole picture.

Today, however, consumers can choose from a healthy roster of viewing options. That includes, of course, local broadcasters, which continue to offer a comparable number of games and can be received in a wide range of ways: for free using an over-the-air antenna; by subscribing to a traditional, facilities-based multichannel video programming distribution (MVPD) platform (that is, cable, direct broadcast satellite , and telco TV); and, more recently, with a subscription to a virtual MVPD such as YouTube TV, which also is the current home of the NFL Sunday Ticket.

In addition, the existence of numerous, competing video distribution platforms – including cable channels like ESPN (which has carried Monday Night Football games for the past two decades) and streaming services such as Amazon Prime (Thursday Night Football), Peacock (Sunday Night Football), and Netflix (Christmas Day) – creates additional opportunities for consumers to view games. Thursday Night Football games on Amazon Prime, as one example, represent an additive option. Similarly, NFL Sunday Ticket and NFL Red Zone provide diehard pigskin fans new couch-based opportunities that did not exist in the halcyon days of old.

This brings me to an important point. Commenters frequently make apples-to-oranges comparisons between the single-digit game schedules offered when local broadcasters were the only game in town and what it might cost today to view every game – nearly 300 in total, including the playoffs.

The notice itself, citing a CBS News article, states that "[i]n 2025, NFL games aired on 10 different services, which, according to some estimates, could cost a consumer over $1,500 to watch all games." That article in turn references a USA Today story for a total of $651 (although the latter in fact calculates a price somewhere between $811 and $833, figures seemingly inflated by double charges for ESPN, which already is included in the YouTube TV base plan); the $1,500 figure comes from an unsourced X post that appears to overstate the price of NFL Sunday Ticket + YouTube TV and similarly double charges for ESPN. Aside from the unrealistic assumption that more than a very few people – or perhaps anyone at all – would want to watch every single game or be able to do so, it's clear that the price figures cited are likely inflated. 

*    *    *

As I have documented in a multiyear series of Perspectives from FSF Scholars and posts to the Free State Foundation blog – including one just a few weeks ago – consumers are migrating steadily away from the "Big Bundle" traditionally offered by traditional MVPDs to a self-selected collection of streaming options. In that highly competitive environment, numerous distributors are choosing to offer live sporting events, in addition to the original and licensed content that they carry, to win and retain customers. That competition-fueled decisionmaking benefits consumers through lower costs and greater choice. It therefore should be celebrated, even as it unavoidably disrupts existing revenue models.

Wednesday, February 26, 2025

TMT with Mike O'Rielly - Ep 18: The Next Broadcast TV Standard

Episode 18 of "TMT with Mike O'Rielly," a videocast featuring former FCC Commissioner and Adjunct Senior Fellow at the Free State Foundation Michael O'Rielly, was released on February 21. In this episode, titled "The Creation & Status of the Next Broadcast Television Standard," Mr. O'Rielly has a conversation with guest Madeleine Noland, President, ATSC – The Broadcast Standards Association. 

Their conversation covers the ongoing transition from ATSC 1.0 to the next-gen broadcast TV standard of ATSC 3.0. Mr. O'Rielly and Ms. Noland touch on topics such as ATSC 3.0 capabilities, including picture enhancements, ATSC 3.0-capable devices (TVs and converter boxes), current coverage status, as well as channel sharing arrangements to enable simulcasts. 

Tuesday, October 22, 2024

Webinar Panel Weighs FCC's Proposed AI Political Ad Regulation

On October 7, Free State Foundation President Randolph May moderated a webinar, "The FCC's Proposal to Regulate Political Ads Using Artificial Intelligence." Video of the webinar is now available online. The Federalist Society-hosted webinar featured a panel discussion on the Commission's proposed rulemaking that would require radio and TV broadcasters as well as cable and direct broadcast satellite (DBS) operators to include a disclaimer on all political candidate and political issue ads that contain content generated using artificial intelligence (AI). The proposed rulemaking also would require notice filings in online political files regarding ad usage of AI, and impose obligations on broadcasters (and cable and DBS operators) to act when informed by "credible third parties" that the ads being transmitted contain AI-generate content. 

The FCC's novel regulation of political ads with AI-generated content raises important questions about the scope of the agency's authority and the policy merits of the proposal. Those topics are ably tackled by the webinar panel, consisting of FCC Commissioner Brendan Carr, Public Knowledge President Christopher Lewis, as well as Prof. Bradley Smith, a former FEC Chairman. To learn more, check out the webinar video. 


On September 19, the Free State Foundation filed initial comments in the FCC's novel AI political ad regulation proceeding. And FSF filed reply comments on October 7. text

Friday, October 11, 2024

PRESS RELEASE: FSF Continues to Oppose the FCC's Proposal to Regulate Political Ads Using AI

Free State Foundation President Randolph May and Director of Policy Studies Seth Cooper submitted reply comments today to the FCC continuing to oppose the agency’s proposal to require broadcasters, cable, and satellite operators to include a disclaimer in all political ads using AI. Below are the first two paragraphs from the Free State Foundation reply comments:

"In these reply comments, we emphasize two primary points. First, even comments filed by parties sympathetic to the proposed rulemaking acknowledge that the Notice’s definitions of terms are ambiguous and easily misunderstood. The key definition of 'AI-generated content,' on which the whole proposal depends, is especially problematic because it seemingly is so vague and overly broad that it would require a disclaimer for virtually all political ads.

 

Second, commenters rightly recognize that the Commission’s proposal to rely on a 'credible third party' to trigger FCC action for an alleged failure to comply with its rules is susceptible to political manipulation, or at least the appearance of it. It is naïve to suggest that, during heated political campaigns, and in today’s charged political environment, that there will be agreement regarding the true independence, dispassionate judgement, and expertise of ‘credible' third parties. Any proposal to rely on such supposed credible third parties almost certainly would not find widespread public acceptance.”

Thursday, September 19, 2024

Media Advisory - FSF Files Comments on FCC's Propose Rules for AI Generated Content in Political Ads

Media Advisory

September 19, 2024

Contact: info@freestatefoundation.org


Free State Foundation President Randolph May and Seth Cooper, Director of Policy Studies and Senior Fellow, submitted comments today in the Federal Communications Commission’s proceeding proposing to require radio and TV broadcasters as well as cable and direct broadcast satellite (DBS) operators to include a disclaimer on all political ads that contain content generated by artificial intelligence (AI). These comments demonstrate that the Commission lacks statutory authority to adopt its proposed regulation of the content of political ads using AI and that, in any event, it would constitute unsound policy to do so.


The complete set of the Free State Foundation comments, with footnotes, is here.

 

Immediately below are the "Introduction and Summary" to the comments, without the footnotes.


Introduction and Summary

These comments are submitted in response to the Commission’s Notice proposing to require radio and TV broadcasters as well as cable and direct broadcast satellite (DBS) operators to include a disclaimer on all political ads that contain content generated by artificial intelligence (AI). They also would be required to include a notice in their online political files disclosing the ad’s use of AI. The Commission’s rush to adopt a novel AI political ad regulation is a misguided power grab – a combination of bad law and bad policy. The Commission should not adopt the proposed rule.

 

The agency lacks statutory authority for its proposed regulation of the content of political ads using AI. The Notice of Proposed Rulemaking cites Section 303(r) and other provisions of Title III of the Communications Act regarding the agency’s power to make rules and regulations necessary to carry out the Act’s provisions in the “public interest.” But the Commission has no traditional regulatory authority over the content of political ads on broadcast radio or TV, and none of those provisions cited in the Notice contain language that reasonably may be interpreted to authorize disclaimer and disclosure mandates for political ads featuring AI-generated content.


Moreover, the FCC’s proposal is likely to run afoul of the Major Questions Doctrine (MQD) as articulated in West Virginia v. EPA (2022) because it involves a question of “vast economic and political significance.” Proposing for the first time to regulate the use of AI in connection with political advertisements appears to be a paradigmatic case meeting the MQD criteria. As such, and because Congress has not clearly granted the FCC authority to adopt the rule it proposes, it’s very unlikely to survive judicial review.

 

By contrast, the Federal Elections Commission (FEC) is given much more explicit statutory authority to regulate significant aspects of political campaign ads under the Federal Election Campaign Act. This includes the FEC’s “exclusive jurisdiction with respect to the civil enforcement” of the Act. To date, however, the FEC has never determined it has jurisdiction to regulate political ads with AI-generated content under its “materially deceptive” statute – and the FEC may lack such authority. If the FEC lacks authority to regulate political ads with AI-generated content, then a fortiori the FCC certainly lacks similar authority under Communications Act provisions regarding broadcast, cable, and satellite services. 



Even if the FCC had the requisite legal authority, the proposal constitutes bad policy because it would apply to ads with AI-generated content that are not materially deceptive, likely causing many viewers to distrust the ads solely or primarily because of the boilerplate disclaimer or simply to “tune out” the disclaimers. Also, it would apply only to ads that are broadcast or transmitted by FCC-regulated services – and not by Internet outlets that garner an increasing share of political ads. Requiring disclaimers on ads shown by broadcast, cable, and satellite services when those same ads may be posted online to wider audiences without disclaimers will add to the confusion, especially since materially deceptive ads are more likely to appear online. Moreover, broadcasters (and cable and DBS operators) do not have inside knowledge about how given political ads were created; yet under the proposed regulation, apparently they would shoulder the burden of having to discern when generative AI was used. By focusing on broadcasters of political ads rather than the creators, the proposed regulation deviates from a more reasonable focus on ad creators that is taken in many nascent state laws regulating the use of AI in elections.

 

Additionally, the proposal would put the Commission in the untenable position of making judgments about “credible third parties” who raise complaints about ads, a matter in which the agency has no expertise. Government should not assume any role in designating third parties as “credible” or not credible for purposes of deciding whether political ads should be disclaimed, disclosed, or taken down. If it were to do so, it would inevitably, and justifiably, invite suspicion that its decisions are politically motivated. The proposed overly broad definition of “AI-generated content” likely would result in broadcast, cable, and satellite services requiring disclaimers for all or nearly all political ads as a regulatory risk aversion measure, rendering such disclaimers unhelpful, if not meaningless.

A PDF of the complete set of Free State Foundation comments, with footnotes, is here.

Wednesday, September 01, 2021

Court Rejects Copyright Infringement Immunity Defense in Locast Case

On August 31, a U.S. District Court rejected the affirmative defense that the Locast service that retransmits over-the-air broadcast TV signals to viewers via Internet livestreaming is exempt from liability for copyright infringement. Section 111(a)(5) of the Copyright Act exempts from liability secondary transmissions or displays by a government body or other nonprofit organization "without any purpose of direct or indirect commercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service." The Locast service is offered by a non-profit entity, and it offers free access to streams of broadcast channel content, subject to a fifteen-second commercial every fifteen minutes. Users who donate $5 or more per month or who claim financial hardship can receive uninterrupted access. 

In ABC, Inc. v. Goodfriend, the U.S. District Court for the Southern District of New York concluded that Locast was not offered without charges other than those necessary to defray the actual reasonable costs for its service. The District Court characterized the user donations as "charges" for avoiding interrupted service. It also found that Locast generated far more money in 2020 from those user charges than was necessary to defray its service costs. Additionally, the District Court rejected the idea that reinvesting money to expand service fit within the statutory exemption since Congress could have expressly allowed for costs of expanding service – but it chose not to. 

The District Court's order addressed only the legal question about the affirmative defense based on Section 111(a)(5), so it did not directly address infringement liability or any other issues. Thus, the case is not over at the District Court. And as of this blog post, there is no word yet as to whether the order will be appealed. 

Friday, June 25, 2021

Nielsen: Viewership of Streaming Video Has Surpassed That of Broadcast Television

In a June 11 Perspectives from FSF Scholars, "Streaming Continues to Redefine the Video Landscape: It's Past Time to Eliminate Legacy Regulations," I made the case that the video distribution power center has shifted from traditional, facilities-based providers to those that lead in the online space.

Both streaming platforms, such as Roku and Amazon Fire TV, and streaming services, led by Netflix and Amazon Prime but including Disney+, Hulu, HBO Max, Paramount+, and numerous others, enjoy user totals that far exceed those of traditional, facilities-based multichannel video programming distributors (MVPDs).

As a consequence, outdated rules premised upon marketplace assumptions that in 2021 absolutely do not apply only impede competition.

Just-released data from Nielsen underscores the degree to which streaming is revolutionizing how consumers access video: more people now view streamed content than watch broadcast television.

This, without question, is a watershed moment.

For more from Free State Foundation scholars on the pressing need to deregulate further the video distribution marketplace, please click here, here, here, and here.

Thursday, April 01, 2021

MEDIA ADVISORY: FSF's Seth Cooper Reacts to Supreme Court's Decision on Media Ownership Rules

The following statement may be attributed to the Free State Foundation's Director of Policy Studies and Senior Fellow Seth Cooper regarding the U.S. Supreme Court's decision in FCC v. Prometheus Radio Project:

Today's unanimous decision by the Supreme Court rightly upholds the FCC's sensible decision to reform media ownership rules that date back to the 1970s. In an era of broadcast, cable, satellite, and Internet-enabled media abundance, government-imposed ownership restrictions on select legacy media outlets are arbitrary and they effectively restrict speech in tension with the First Amendment. As the Court found, the Commission's 2017 decision to remove some of its old media ownership rules was a reasonable exercise of the agency's statutory duty to periodically review and update those rules to fit with current marketplace conditions. Thankfully, Court's decision puts an end to the years-long analysis paralysis over media ownership regulation in the lower court.  

Wednesday, December 23, 2020

FCC Adopts Order to Promote "Next Gen TV" and "Broadcast Internet Services"

At its December 10 public meeting, the FCC adopted a report and order that modifies agency rules "to foster the efficient and robust use of broadcast spectrum capacity for the provision of "broadcast Internet services" enabled by ASCT 3.0 or "Next Gen TV" technology. Among other things, the Commission's order clarifies that noncommercial educational television stations (NCEs) are free to provide ancillary and supplementary services like broadcast Internet services. I previously mentioned the now-adopted order in a May 2020 blog post. 

The Commission's vote on the order was unanimous in the result, as there appears to be plenty of upside and no downside to the order. In his concurring statement on the order, Commissioner Brendan Carr highlighted some of the potential benefits of broadcast Internet services:

 

For 5G, it could help augment coverage or add capacity by shifting data off cellular networks. As we look to push increasingly more data to the edge of the network, for both fixed and mobile services, broadcast spectrum could provide one way of moving all that data in an efficient and cost-effective manner. 

 

Free State Foundation Senior Fellow Andrew Long described the benefits of Next Gen TV for video consumers in his Perspectives from FSF Scholars paper, "Multicasts, ATSC 3.0 Turn Broadcasting Into a Multichannel Platform." 

Thursday, May 21, 2020

FCC Proposing to Keep "Broadcast Internet" Services Free From Legacy Regulations

On May 18, FCC Commissioner Brendan Carr delivered a keynote address as part of the National Association of Broadcasters' event on "Broadcast Internet: The Future of ATSC 3.0" Commissioner Carr discussed the potential for ATSC 3.0 technology to deliver 25 Mbps "broadcast Internet" services, including IoT, smart agriculture, and telemedicine services. At its public meeting on June 9, the FCC will consider a proposed rulemaking that would ensure that the intriguing innovative and competitive potentialities of ATSC 3.0 and broadcast Internet services remain free from legacy broadcast regulations. Also check out the Commissioner announcement of the upcoming vote. 

Monday, May 18, 2020

Audio of Conversation on the FCC, Broadcast Journalism, and the First Amendment

Audio is now available for Free State Foundation President Randolph J. May's Federalist Society teleforum conversation with FCC General Counsel Thomas M. Johnson, Jr. on broadcast journalism and the First Amendment. In the teleforum, they discuss the agency's response to the emergency petition filed by Free Press that sought to investigate and censor broadcasters covering presidential press conferences and offering commentary on COVID-19. Tune in to hear an insightful exchange regarding First Amerndment principles and the FCC's approach to free speech issues. The audio is available for streaming and for download at the Federalist Society's website.

Thursday, July 25, 2019

Modern TV Act Would Remove Old Rules, Bring Video Policy Up to Date

The Modern Television Act of 2019 is promising new legislation that would bring federal video policy into greater alignment with 21st century market realities. Introduced in the U.S. House of Representatives on July 25 by Reps. Steve Scalise and Anna Eshoo, the Modern TV Act would repeal or at least reduce a number of old legacy broadcast TV and cable regulations that were based on a now-obsolete picture of the video market. The Modern TV Act is a bipartisan compromise measure that the 116th Congress ought to take up in earnest this year.

Among its provisions, the Modern TV Act would eliminate distant signal importation prohibitions, syndicated exclusivity rules, network non-duplication rules, authority to regulate local cable rates under Section 623, and cable leased access rules. Most of those rules involve dealings between market participants that own video programming and video service providers that distribute programming to retail subscribers. Once those rules are eliminated, video programmers and video service providers can, in most instances, simply negotiate contracts to address which programming receives carriage in which local TV markets. The Modern TV Act also would eliminate, or at least largely eliminate, cable and satellite compulsory licenses for carrying copyrighted video programming, thereby allowing parties to negotiate copyright royalties.

The Modern TV Act moves firmly in the direction of establishing a federal video policy that matches the competitive conditions of today's innovative video marketplace. For several years, Free State Foundation scholars have called attention to the fact that legacy regulations of broadcast, cable, and direct broadcast satellite (DBS) TV services are based largely on early 1990s, or even earlier, assumptions about the analog and VCR-era video market. But those regulations are now hopelessly out of touch with today's marketplace. 

The days are long gone when the video service choices of most Americans were largely limited to over-the-air (OTA) broadcast TV or a single cable operator. Today, most Americans can choose between a cable provider and two DBS providers, while many also have access to a former "telco" video services provider. Unlike the days when cable operators had a 91% market share among pay-TV services, at year's-end 2017, cable served 55.2% of multi-channel video programming distributor (MVPD) subscribers, DBS served nearly 33.5%, and "telco MVPDs" serviced 11.3%. Meanwhile, in 2018 antenna use for OTA broadcast TV reached its highest level since 2005, with 31% of U.S. households having an antenna on at least one TV. Online video distributor (OVD) services have also dramatically transformed the video market. In early 2019, Netflix had over 60 million U.S. subscribers to its streaming video service, while Amazon Prime and Hulu had 101 million and 28 million. Widespread adoption of OVD services has been recognized as an important cause of annual MVPD subscriber losses going back to 2013. Total MVPD subscriptions were down to 94 million at year's-end 2017, and sharp declines have been reported for 2018 and 2019.

Legacy regulations geared toward last century's outdated technologies and less competitive, pre-Internet market conditions confer no benefit on consumers today. Instead, their continuation saddles broadcast, cable, and DBS TV service providers with burdensome compliance costs as well as restrictions that can inhibit their ability to compete with each other and with online competitors. 

Furthermore, as Free State Foundation President Randolph May and I have explained in numerous writings, many legacy video regulations, including leased access rules, amount to forced access mandates. Requiring video service providers to carry video programming not of their own choosing violates their First Amendment free speech rights. The Modern TV Act's proposed repeal of leased access rules would better respect the free speech rights of cable providers. 

To help bring federal video policy up to date, the 116th Congress should give prompt consideration to the Modern TV Act.

Wednesday, January 18, 2017

Broader Spectrum Licenses Could Increase Auction Revenues

On January 17, 2017, Scott Wallston, President of the Technology Policy Institute, published a blog entitled “Don’t Be Disappointed by the FCC’s Incentive Auction.” Mr. Wallston discusses why the success of the 2015 AWS-3 auction created unrealistic expectations for the broadcast incentive auction. He states that licenses restrict how bidders can use spectrum, therefore wireless-only spectrum will produce higher market values than TV broadcasting-only spectrum. Mr. Wallston commends the FCC for going forward with the incentive auction, but says if licenses allowed for a broader use of spectrum, we may see higher auction revenues. 

Tuesday, August 06, 2013

Department of Commerce Green Paper Highlights Copyright Imperatives


On July 31 the U.S. Department of Commerce released "Copyright Policy, Creativity, and Innovation in the Digital Economy." It's a so-called Green Paper, prepared by the Commerce Department's Internet Policy Task Force to further discussion on copyright policy. To that end, the Green Paper set out a number of specific copyright policy issues for future rounds of discussion.
The Internet Policy Task Force's Green Paper presented a handful of quick takeaways. Namely, it touted the critical economic role of copyright and reaffirmed the institutional legitimacy of copyright. The Green Paper also endorsed the basic principles of copyright law, while nonetheless recognizing the need for new solutions to challenges posed by technological changes. In particular, the Green Paper expressed disapproval of the advantage that broadcast TV enjoys over competing technologies under current copyright performance rights' laws. And it questioned the compulsory licensing regime's disparate treatment of different technological platforms.   
At the outset, the Internet Policy Task Force's Green Paper offered an important assessment of the role of copyright in our economy:
The industries that rely on copyright are today an integral part of the U.S. economy, accounting for millions of jobs and contributing billions of dollars to the G.D.P. Moreover, the creative content they produce contributes to the development of the broader Internet economy, spurring the creation and adoption of innovative distribution technologies. Not only do these industries make important economic contributions, they are at the core of our cultural expression and heritage.
The Green Paper also defended the institution of copyright from assaults on its legitimacy:
Effective and balanced copyright protection need not be antithetical to the free flow of information, nor need encouraging the free flow of information undermine copyright. In fact, as the Supreme Court has recognized, "the Framers intended copyright itself to be the engine of free expression."
The Green Paper similarly reaffirmed the basic soundness of legally-protected rights in creative works: "The Task Force believes that the core principles of U.S. copyright law remain fundamentally sound." With those foundations in place, the Green Paper identified more concrete areas where changing technologies make new law and policy solutions necessary.
The market for digital transmission of sound recordings is one of the specific areas of copyright policy where the Green Paper weighed in. As it pointed out, "questions have been raised as to different obligations for different types of services using sound recordings, and disparities in rate-setting standards for those digital services that are subject to the statutory license."
The Green Paper elaborated:
Of particular concern in the context of the growing digital audio market is the fact that there is still no public performance right when sound recordings are used by over-the-air FCC-licensed broadcasters. As a result, over- the-air broadcasters enjoy a competitive advantage over emerging digital services. 
For over thirty years, the Administration and Copyright Office have made repeated calls to create a public performance right for the broadcasting of sound recordings. Apart from the inability to obtain compensation in the United States, this omission has had a real impact on the balance of payments from abroad. While broad public performance rights are enjoyed by owners of sound recordings in most other countries, U.S. sound recording owners and performers have been unable to collect remuneration for the broadcasting of their works in those countries, due to the lack of reciprocal protection here.
Relatedly, the Internet Task Force voiced its support for Congress "[a]ssessing the appropriateness of different rate-setting standards for the public performance of sound recordings by different types of digital music services." The Green Paper doesn't offer any particular policy solutions on this matter. It merely suggests a broad focus on "the interests of all involved parties." And it expressly declined to address "the scope of statutory licenses for cable and satellite retransmissions." But the Green Paper's identification of the problematic nature of disparate treatment of competing technologies and services is important enough.
Under the federal Copyright Act, when a music performance copyright's holder and providers of music services can't agree on royalty terms for performances, the statute imposes a compulsory licensing and royalty rate-setting scheme. Not only that, our current compulsory licensing system subjects different types of services to different rate standards. For example, webcasting services are subjected to a different copyright royalty rate standard than cable and satellite services. And as mentioned above, broadcast TV does not need to reach agreement with music copyright holders or pay any royalties for public performances– i.e., for playing music on over-the-air radio broadcasts. 
The Internet Policy Task Force should get credit for reaffirming the importance of copyright protection and for raising copyright issues that require new solutions. The Green Paper made good points about the problems inherent in a copyright licensing and rate-setting scheme that gives preferential treatment to certain technologies and services. Those points need to be taken up in future discussions of copyright policy reform. As I've written about previously, the ultimate task for Congress is "Putting Music Copyright Policy on a Free Market Footing."

Wednesday, July 31, 2013

FSF Seminar Panelists Supply Insights Regarding New FCC Chairman


On July 30, the Senate Commerce, Science and Transportation Committee voted to approve the nomination of Tom Wheeler to be Chairman of the FCC. The nomination was the subject of a June 18 hearing, which came just a few days after the Free State Foundation's "If I Were the FCC Chairman" lunch seminar. Of course, Mr. Wheeler's name figured into the FSF seminar panelists' discussion of what they would do if they happened to be the new FCC Chairman.
The FSF seminar panelists offered some distinct yet insightful perspectives on understanding the dynamics of technological change, policy imperatives for the new FCC Chairman, and the characteristics that Mr. Wheeler might bring to the agency. Their views are worth considering as the nomination process proceeds to the full Senate.
On the seminar panel were Gail MacKinnon, Executive Vice President and Chief Government Relations Officer, Time Warner Cable; Craig Silliman, Senior Vice President for Public Policy & Government Affairs, Verizon Communications; and Gigi B. Sohn, President & CEO, Public Knowledge. Their exchange, taken from an edited transcript of the event, follows below.
FSF President Randolph May, moderator for the seminar panel, prefaced the ensuing discussion by pointing to his May 9 Washington Times op-ed:
MAY:  I wrote this piece called "A Historian for the FCC."  It basically looked at Tom Wheeler's avocation as a historian.  As you know, one of his books focused on the role the telegraph played in winning the Civil War.  And essentially I was making a point that I hope he would look at history and realize we're a long way from the telegraph and some other things…. So one of the questions I'm going to ask these panelists later, probably, would be to put on their historian's hat and, with that in mind, think about the way that they would frame their administration if they were the chairman.

A bit later on, the panel turned to the subject of the FCC Chairman nominee:
MAY:  I want the panelists briefly to describe what character traits they think a new chairman should have, what's important for success for the new chairman in terms of the way he operates the Commission and the character traits he brings to that.

[W]e know that Tom Wheeler's a historian.  That's something that's been an important part of his life.  Is there anything in terms of the way that you think he should, as a historian, think about the job and that you would share with us?

The seminar panelists' responses:
MACKINNON:  Being a historian is a real asset, because as one senior entertainment executive once said to me, "It's the history you don't know that will kill you."   Tom Wheeler's been around for a long time.  He is somebody who knows how business works and he's a very thoughtful, deliberative human being.  I don't know him, personally, but what I've been told is he's open-minded and collaborative.  Those are very essential characteristics for somebody who is coming over and presiding over the industry, looking at industry on a daily basis.

SILLIMAN:  It would be presumptuous for me to speculate on how people think about the job and how Tom Wheeler will do.  But the scope of history is an interesting question for our industry that has a couple of angles. 

One is that communications technologies throughout the scope of history have served an empowering, enabling role, for people to spread and disseminate ideas, to open up their horizons to people beyond their direct physical proximity.  That spread of ideas has unleashed a whole round of human innovation, freedom, and other empowerment.  It's tremendously exciting.
                       
The second lesson would be people sitting around ten years before Gutenberg came up with the printing press, or ten years before the development of the telegraph. People could no more foresee the technological changes that would be wrought and the societal changes that would be wrought ten years hence than we can here today.
                       
We often feel, and rightfully so, that we are at the cutting edge of technology.  And we are.  But we also have to remember that the cutting edge is constantly moving out ahead of us.  We are six years into the smartphone revolution.  15 to 18 years ago, if you were an early adopter and you had dial-up Internet and maybe an analog cell phone, the idea that we could foresee 10 years, 15 years out what may be coming would be the ultimate hubris.  I don't think we can foresee years out now.
                       
I think that's tremendously exciting, because we are going to see huge breakthroughs in the areas of energy management, education, healthcare.  A lot more things are going to be enabled by these communications technologies.  But in the policy realm what I would take from the sweep of history is: don't ever assume that standing in the static point, where we are today, that we can see out over the horizon 5, 10 years in an environment that has been characterized by this pace of technological change, either from the straight technology perspective, or the larger societal benefits perspective. When you're looking at these issues, don't make the mistake of locking yourself into today's vision of today's technology.  Make sure you have a framework that will evolve at the same rate as technology.

SOHN:  The FCC chair has got to be a leader, and he has to have an agenda.  Within the first 30 days, he needs to get up there and say, "This is what I want to do and this is why."  I've even said this to Tom Wheeler….
                       
He also needs to pick good people; people that really know the agency, not his best friends from college or the Supreme Court, or wherever else; people that care about this stuff and people that know how to run the agency.  As far as a historian is concerned, he needs to look at the history of broadcasting.  He needs to look at the history of cable and see the consolidation that's taken place.
                       
Broadcasting was first proposed to be a common carrier service, believe it or not.  And Congress decided to do this public interest obligation thing, which hasn't worked out all that well.  Cable also started out not that vertically integrated in the 1984 Cable Act.  They were allowed to own the programming on their systems.  Both of those were huge policy mistakes.  And the chair needs to learn that the Internet cannot become the same thing.
                       
The Internet is the most empowering technology we've ever seen.  But if it falls under the control of just a few hands or some really bad countries, it's not going to be that.  I started out 20-some-odd years ago trying to make broadcasters and cablecasters obey their public interest obligations.  Having completely totally failed at that, I look to the Internet as being the solution to the problem of top-down command-and-control media.  And it's got to stay that way.

For my part, I think it imperative the FCC Chairman actively takes a free market-oriented approach to communications policy. It's no secret that the communications industry is critical to our nation's prosperity. "One-sixth of the American economy can be directly linked to the industries the FCC regulates," according to Acting FCC Chairwoman Mignon Clyburn. And due to the ability of information technologies to offer new capabilities, enhance productivity, and increase efficiency, most of the remaining five-sixths of the economy can be indirectly linked to the communications industry. In light of the innovative and competitive conditions that now prevail concerning communications services, a market-based approach can better enable additional waves of creative and competitive breakthroughs than last-century's monopoly-era regulatory approach.
A free market-oriented approach to communications policy, in short form, includes the following: (1) recognition that today's rapidly-changing digital communications market has replaced the last-century, analog-era monopolistic assumptions upon which most of the FCC's regulatory apparatus is based; (2) seriousness in pursuing elimination of outdated regulations that can no longer be justified and that threaten to reduce or block further innovation and investment; (3) strong preference for technologically neutral policymaking that eschews silo treatment of different industry segments and recognizes the reality of intermodal competition between platforms; and (4) heavy presumption against new regulatory controls over dynamic products and services unless clear evidence of market failure and consumer harm can be demonstrated.  
With his broad background in communications policy as well as the history of technology, Mr. Wheeler has all the intellectual tools and experience necessary to pursue a free-market approach as FCC Chairman. Of course, effectively implementing such an approach – amidst disputes over how to design spectrum license auctions, appellate litigation over network neutrality regulations, the ongoing IP transition, and questions over the future of forbearance and legacy regulations – involves successfully addressing many practical challenges.
In any event, the viewpoints offered by the three panelists at FSF's "If I Were Chairman" seminar – all of whom are nationally prominent in the communications policy realm and known for their expertise regarding the FCC – were thought-provoking and stimulating. Worth keeping in mind as Mr. Wheeler's nomination moves toward a final vote by the Senate.