In an era of video devices featuring cloud-based DVR functions and ultra HD viewing, why is the FCC still enforcing device regulations dating back to the days of VCRs? And why is the Commission encouraging adoption of new rules when a stronger case exists for eliminating the old rules?

 

These are important questions for the Commission - and the public - to be asking.

 

September 4 is the deadline Congress set for an advisory committee working group to submit to the FCC a report recommending new downloadable security standards for video devices. Yet the Commission has steered the group in a problematic pro-regulatory direction. FCC staff instructed it to propose standards for unbundling multichannel video programming distributors' (MVPDs') video and menu content for repackaging by third-party providers. That instruction exceeds Congress's mandate and is an invitation for the adoption of unsound policy.

 

It appears the Commission hopes to use the report as a springboard for new video device regulations. But the case for regulating video devices based on lack of competition has collapsed. Cable, direct broadcast satellite, and former telco companies compete head-to-head for video subscribers. Online video distributors (OVDs) like Netflix and Amazon Prime now have over 100 million subscriptions - equal to or greater than the number of MVPDs' subscriptions. Also, there is an emergent streaming media device market segment, which includes Roku 3, Amazon Fire TV, and AppleTV. As many as 86 million streaming media devices will be sold globally by 2019. OVD and streaming media devices offer consumers an alterative to MVPDs.

 

New regulatory mandates imposing uniform device standards threaten to choke the investment and innovation in video device technology that has taken place outside the scope of FCC requirements. Regulation also harms the ability of MVPDs to make competitive offerings to consumers in response to challenges posed by OVD and streaming media devices.

 

Whatever the report recommends, the FCC should consider another course: eliminating its video device regulations. In Section 629(e), Congress established a course for sunsetting video device regulations when competitive conditions in the device market are ripe. That time has come.

 

The FCC should declare the video device market "fully competitive" and sunset its device regulations. The Commission ought to be willing - indeed, it should be eager - to show that it can get rid of regulations that are no longer necessary in light of the development of a competitive market.

 

 

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