Once more, we commend the Committee for undertaking its sustained review and update of the increasingly anachronistic Communications Act. As is the case with the other areas that Free State Foundation scholars have addressed in prior Responses, updating the Communications Act on video policy is especially timely. Since Congress passed the Cable Acts of 1984 and 1992 and the Telecommunications Act of 1996, the video service market has been marked by rapid technological changes and increased competitive activity, which undermines the case for direct regulation.
As the next section of this Response amply demonstrates, breakthrough innovation backed by heavy entrepreneurial investment has for the last twenty-five years drastically transformed the video market. These same forces will continue to reshape its landscape going forward. Convergence toward digital and Internet Protocol-based services and cross-platform competition from competing delivery technologies now offer consumers video capabilities and content choices hardly imaginable when Congress last spoke on video policy in the 1990s. The legacy video regulatory apparatus rested on an excessive concern with perceived scarcity, monopolistic power, lack of distribution outlets, and minimal consumer choice. Legacy video regulations based on those outdated concerns now impose disparate regulatory treatments on competing services, which threaten to stifle future innovation. In short, video policy must be reformed to reflect the demonstrably changed market conditions detailed in the body of this Response.
Historically, constitutional permissibility of several aspects of legacy video regulations rested on upon claims of scarcity and monopoly-like conditions in the market. Given the magnitude of the continuous ongoing technological and competitive changes, the case for exempting video services, with minor exceptions, from the standard First Amendment protections given to other forms of speech has evaporated. Standard rule of law norms now impose on Congress an obligation to adopt a new approach to video services that satisfies these First Amendment constraints.
Replacement of the legacy video services regime should be part and parcel of a new Digital Age Communications Act. A new policy framework for video services should rely on the same fundamental principles applicable to other digital services. Bringing video into a single, unified framework for digital services furthers the goals of policy simplicity and harmony.
The Communications Act's ubiquitous public interest standard, under which so much of video regulation takes place, is unfit for a digital age market characterized by cross-platform video competition. That standard is under-protective of free speech involving video content and other editorial decisions by video service providers. The FCC's open-ended authority to regulate "in the public interest" should be largely curtailed.
Transition of video to digital and IP-based platforms has rendered the current silo statutory structure obsolete and inequitable. And most of the distinct prescriptive rules for various types of video services are unsuited to competitive conditions in today's converged digital market for video services. Thus, for example, basic tier cable channel requirements, basic tier cable rate regulations, program carriage mandates, and must-carry and retransmission consent rules should be eliminated, albeit with reasonable transition periods to allow time for adjusting existing arrangements and protecting reliance interests. Regulation of video services would occur through case-by-case adjudications under the same competition-based standard that we articulated in our First White Paper Response. Thus, except in limited circumstances involving public safety, emergency notifications, or the like, regulation of video services, like other services, would be dependent on findings of consumer harm and market power.
Further, the FCC's existing authority over cable subscriber privacy and over DBS subscriber privacy should be transferred to the Federal Trade Commission. Consolidating consumer privacy for video services and other digital services within the FTC's jurisdiction would establish a consistent set of rules for data privacy policy, enforced by a single agency.
This clean-slate approach to video policy is consonant with the dynamic and competitive video services market that now exists and it is consistent as well with First Amendment objectives. To advance both consumer welfare and rule of law norms, consistent with our recommendations regarding other communications services, Congress should integrate video services into a generally applicable framework that presumes regulation is unnecessary absent evidence of consumer harm and market failure.
A PDF of the complete Response, with footnotes, is here.
Randolph J. May, President of the Free State Foundation, is a former FCC Associate General Counsel and a former Chairman of the American Bar Association's Section of Administrative Law and Regulatory Practice. Mr. May is a public member of the Administrative Conference of the United States, and a Fellow at the National Academy of Public Administration.
Mr. May is a nationally recognized expert in communications law, Internet law and policy, and administrative law and regulatory practice. He is the author of more than 150 scholarly articles and essays on communications law and policy, administrative law, and constitutional law. Most recently, Mr. May is the editor of the new book, "Communications Law and Policy in the Digital Age: The Next Five Years." He is the author of A Call for a Radical New Communications Policy: Proposals for Free Market Reform. And he is the editor of the book, New Directions in Communications Policy and co-editor of other two books on communications law and policy: Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated? and Communications Deregulation and FCC Reform.
