The top Democrat on the House Energy and Commerce Committee said Friday that the Federal Communications Commission should not impose “sweeping” regulations on the streaming video services that are rapidly changing the ways that Americans watch television and movies.
“The online video market is still burgeoning, so right now we can’t know what business models consumers will prefer and we can’t know yet how to craft the proper consumer protections,” said Rep. Frank Pallone Jr. (D-N.J.), the committee's ranking member, while speaking via telephone to the audience at a Duke University School of Law forum.
“In the case of defining online video providers as cable companies, I don’t think we can say yes,” he said. “Until we all better understand the ultimate impact on consumers, the FCC should avoid adopting sweeping new regulation.”
Policymakers have started to grapple with online video services as they supplant traditional broadcasters as the destinations where some Americans go when they want to watch television shows and other video content.
Last year, the FCC approved a notice of proposed rulemaking that suggested classifying some online video services similarly to cable companies. Supporters, such as FCC Chairman Tom Wheeler, say it would level the playing field between traditional broadcasters and online services and give the latter better access to television programming.
The change could support a service such as now-defunct startup Aereo, which aimed to let consumers watch and record broadcast television over the Internet through an antenna. The company folded in part because it could not get access to programming from television networks.
“By facilitating access to such content, we expect Internet-based linear programming services to develop as a competitor to cable and satellite,” said Wheeler in a statement when the commission passed the rulemaking notice. “Consumers should have more opportunities to buy the channels they want instead of having to pay for channels they don’t want.”
Opponents argue that it is far too soon to regulate the growing online video business and that applying old regulations to a new market is ill-advised.
Pallone also argued that lawmakers should examine the National Football League’s antitrust exemption that allows the teams that comprise the league to negotiate their programming rights as a bloc.
“So I believe we have an obligation [to examine] what effect the NFL’s antitrust exemption is having on consumers and fans in today’s market,” he said. “We should also understand whether the league is operating as a monopoly in their dealings with other distributors.”
Pallone has taken on the NFL for its opposition to legalizing sports betting in his home state of New Jersey. His interest in that issue is also partially behind his recent inquiry into the ties that the NFL and other leagues have to daily fantasy sports sites DraftKings and FanDuel.
In his speech Friday, he noted that lawmakers and regulators will have to deal with a market that changes quickly.
Not only are services such as Netflix and Hulu becoming destinations for viewers all over the world, but users are increasingly viewing more video on their mobile devices. Meanwhile, old players — such as cable companies and broadcasters — are rolling out their own offerings to cater to Americans who no longer feel they need a traditional television package.
Pallone said that in considering the video landscape, he would urge the Energy and Commerce Committee to focus on the effect on customers.
“With many of the issues we deal with, it’s very easy to lose sight of the reason we’re here,” he said. “We get caught up in battles between companies and industries, we get asked to level the playing field for our industry, but we forget our main goal is to make sure that consumers are protected and must always strive to view all of our actions through the eyes of the consumer.”