The apps revolution is less than a decade old, but it has already disrupted major industries and improved our lives in countless ways. From how we connect with friends, listen to music, and get around town, the vast new world of digital apps has reshaped our lives and revolutionized huge chunks of the American economy.
And few areas have been disrupted more completely and beneficially than consumer video and television. In just the last few years, new video apps and “over-the-top” streaming services have totally upended the old single screen, “check the TV guide” model.
Netflix now has more subscribers than any cable company, while services like Sony Vue and Sling TV offer a slew of popular networks over the Internet — including cable mainstays like ESPN and CNN — without any need to subscribe to a vast bundle of channels. CBS, HBO and dozens more offer “direct to consumer” apps of their own. Major League Baseball and the National Hockey League now stream virtually all their games live through apps. And a host of app-fueled devices like Roku, Apple TV and Amazon Fire are flooding into the market as well.
But unbeknownst to most viewers anxiously waiting for the next chapter of “Game of Thrones,” this healthy, growing ecosystem is being challenged in Washington by a handful of large special interests seeking to leverage friendly regulators into passing anew rule that would benefit them at the expense of everyone else who produces, watches or cares about TV.
This “AllVid” proposal would require cable, satellite and fiber video providers to “unbundle” their programming and hand it over — free of charge — to any third party tore package and redistribute to customers. Basically it would allow large technology companies free access to the vast libraries of movies and television shows that existing video providers have developed, without negotiating or paying for programming rights or building the networks needed to deliver it. It would be the worst kind of mandate —picking winners and losers in a market that is already competitive and flourishing instead allowing competition and consumer demand to win out.
First and most important, it would unravel the existing creative ecosystem that has generated such an overwhelming flood of quality new shows. AllVid resellers would not be bound by rights agreements and network carriage deals that drive the business models making today’s diverse universe of quality programming possible.
Today, content providers negotiate highly detailed arrangements that cover critical business terms like advertising, scheduling, channel placement and more. These agreements provide the revenue and certainty needed to fund quality shows. But FCC-mandated video unbundling would leave them in tatters, stripping away the value of today’s programming while undermining the business case for investment in tomorrow’s
Second, it would impose painful new costs on consumers, who would end up shouldering the billions it would take to re-architect networks to comply with the AllVid mandate. And it would subject them to new layers of micro targeted advertising piled on top of their existing service by the AllVid distributors.
Third, it would erode fundamental privacy protections. The strict viewer privacy rules that govern cable and satellite companies would not apply to AllVid services — a regulatory gap the companies pushing for these rules (who have built multi billion dollar businesses exploiting personal data and customer information) could use to profit from the sale of personal details about your individualized viewing habits.
And most fundamentally, these rules are simply not needed to promote competition for consumer video.
The top House Democrat with jurisdiction over video recently celebrated “the dizzying pace of change in the video marketplace,” noting that “every day seems to bring announcements of new services” and suggested the FCC take a breath before passing new rules. That is good guidance.
Apple’s Tim Cook recently claimed that apps are “the future of TV” as he unveiled his company’s latest streaming set-top box. And app-based innovation and competition does not require a new AllVid mandate — it is already under way and thriving, as Cook’s pronouncement makes clear.
The FCC should tread lightly here — and trust Cook (who has a pretty good track record on these things) and ignore those pushing for an AllVid free ride.
Jason Llorenz is a professor, research, and advocate specializing in telecommunications policy. He teaches courses in digital communication and policy at the Rutgers University, School of Communication and Information. LISTA Member in good standing.