ACA Summit: Pai Leans Toward Not Applying Regs to OVDs

Says FCC should probably focus on deregulating traditional video providers

By John Eggerton -- Broadcasting & Cable, 3/13/2013 4:10:52 PM

FCC commissioner Ajit Pai told an American Cable Association audience in Washington on Wednesday that, while he did not want to prejudge the FCC's open proceeding on how to define an MVPD, he did say he was more inclined to remove regulation from traditional video distributors than apply them to new services.

That came in a Q&A with ACA president Matt Polka.

Polka asked whether over-the-top providers like Netflix and Hulu should be regulated by the FCC, or traditional distributors deregulated in order to level the field.

"The consumer doesn't think about the mode of distribution, they think about the content," said Pai. "I think it would be good to have laws and regulations take that same approach."

After saying he did not want to pre-judge the proceeding, he added: "I will say that my general preference is not to apply additional regulations to the video market. Instead of regulating over-the-top providers, we should probably focus on deregulating traditional providers."

Pai did not offer much hope on the retrans front. The day before FCC chairman Julius Genachowski had suggested the FCC might have to weigh in to reduce blackouts, but also said it probably needed congressional authority. The FCC is currently confined to ensuring negotiations are fair, but ACA has argued that gives it the leeway to step in to, for example, mandate carriage during standstills.

He said the issue was obviously on his radar -- even his mom had contacted him asking for an explanation of takedown warnings, but added. "I don't want to be the bearer of bad news, but we are a creature of Congress. Our authority is circumscribed. We don't have the authority to dictate the outcome or even to some extent the process or retransmission negotiations."

While he said the FCC's hands were tied, he would suggest Congress make any necessary changes.

Pai said he had no problems with usage-based billing, calling it a generally accepted principle in that the more you use, the more you pay. He said he thought there would be some "unintended and probably unpleasant consequences" to trying to restrict usage-based pricing, adding that he didn't support the FCC inserting itself into pricing decisions generally.

Following his speech, he was asked by one ACA member to defend his opposition to Joint Sales Agreements being counted toward local ownership caps. ACA wants those and other joint agreements to count, which would reduce the number of those shared agreements thus the number of broadcasters now allowed to jointly negotiate retrans for themselves and a station they operator or sell ads for in the same market.

Pai said his support was not related to that issue, but instead allowing broadcasters to upgrade their business, save overhead and newsgathering costs. "Those are the kind of pro-competitive benefits I envisioned."

Pai closed by praising Polka's and ACA's representation of small cable issues. "You really are effective advocates at the FCC. You are well served and I think we are, too, because we get the information from our perspective that we need," Pai said.