McDowell Criticizes Mandated a la Carte, Auction Result
FCC Commissioner Speaks at Technology Policy Summit in Hollywood
By John Eggerton -- Broadcasting & Cable, 3/27/2008 8:29:00 PM
Republican Federal Communications Commission member Robert McDowell said technology is driving an a la carte model that doesn't need a push from government. He also suggested that open-access mandates on just-acutioned advance wireless spectrum was nothing to brag about.
In a speech to a technology policy summit in Hollywood (according to a prepared text of his remarks), McDowell said government-mandated a la carte cable service could drive up cable rates, drive down programming quality and and make ad revenues disappear.
Republican chairman Kevin Martin has argued that requiring cable operators to provide per-channel programming would do the opposite.
McDowell said the market is already delivering a la carte without government "help." He added that millions of people were "flocking" to sites like Hulu, Joos, Veoh and Gofish, and that that the revolution in content choice and delivery is going mobile. "Would these developments exist today if the government had tried to engineer them through mandates? Probably not," he said.
He also pointed to a First Amendment problem, saying that the government was "preclude[d] from dictating to operators and programmers how their programming must be packaged and sold," and adding that a prescriptive à la carte mandate would probably be shot down in court on First Amendment grounds alone.
McDowell also diverged from the chairman in his handicapping of the just-completed 700-megahertz auction. The FCC, with Martin's backing but not McDowell's, put open-access conditions on a swath of spectrum sufficient to create a national wireless network and potentially a "third pipe" competitor to Verizon Communications and AT&T. But no single company bid enough to get all the licenses as a package.
Commenting on the auction after it closed last week, Martin touted the conditions, saying, "With the open-platform requirements on one-third of the spectrum, consumers will be able to use the wireless device of their choice on those networks and download whatever software or applications they want on it," adding that the conditions will have "a significant effect on the next phase of wireless-broadband innovation."
McDowell suggested that the market was already heading toward open access and "for the government to take credit for sparking a drive toward open access is a bit like a rooster taking credit for the sunrise." He also said he had a theory as to why no major player bid for the C block of spectrum that could have created the new competitive national network.
McDowell said the result of open-access mandates was to disadvantage the smaller players the FCC tried to help by dividing some of the spectrum into smaller, presumably more affordable, blocks. "In other words," he added, "it is apparent from the auction results that larger companies outbid smaller companies in the smaller blocks in order to avoid the open-access mandate. In the name of openness, did the auction design push rural players and smaller entrepreneurs out of the wireless marketplace?" His answer was yes.
