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Critics warn feds will choke off online TV

Opponents of new regulations from the Federal Communications Commission are warning that the agency will inadvertently ruin the future of TV.

In comments filed to the FCC this week, industry and advocacy groups warned that the plan would unnecessarily interfere with the free market and stunt the growth of a nascent service.

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“[C]ompetition in the video marketplace is already flourishing,” the National Cable and Telecommunications Association wrote. “[I]ntervening in the marketplace to provide special benefits to an entire new class of providers of video programming while imposing special obligations on certain program networks has the effect of ... promoting some competitors over others without regard to their ability to best and most efficiently meet consumer demand.” 

The Consumer Electronics Association echoed the sentiment, and urged the FCC to “refrain from regulation and let online video technologies and business models more fully develop and compete.” 

Last year, the FCC proposed new regulations that would expand its definition of cable and satellite TV services to also include new types of online video that go beyond services like Netflix or Hulu. 

The regulations would allow companies that want to offer multiple live, online streaming channels to buy rights to programming just like traditional cable companies already do.

Supporters say that could open the door to the next generation of online television, such as Sling TV and similar services, and pay dividends for consumers.

The advocacy group Public Knowledge said that the “pro-competitive” move “will help drive down prices and increase choices for all customers, including those of traditional [cable and satellite companies], while ensuring continued accessibility.”

At the same time, the rule change could also lead to new requirements for online video companies, which some have worried might stunt their growth.

“Subjecting certain [online video distributors] to the regulatory privileges and obligations of [cable companies] is not only unnecessary given today’s thriving Internet video market, but also likely to distort competition among various [online video distributor] business models,” wrote the Competitive Enterprise Institute, the International Center for Law and Economics, and TechFreedom, which all favor limited federal regulation. 

Critics got a bit of a boost from DirecTV, which is a satellite TV company but has also recently launched a Web streaming service of its own.

The FCC “should not apply legacy regulation to new services in an emerging and dynamic market at this time, even if the commission believes that regulation might help such services,” it said.