NCTA: FCC Regs Lag Competitive Market

Pushes back on set-top 'dis-aggregation,' must-buy tier

The National Cable & Telecommunications Association says the video marketplace has been competitive for many years and through many video competition reports, but the FCC's regulatory regime has yet to catch up with that fact.

Add the "booster rocket" of over-the-top options, it says "the role for regulators is not, as some urge, to extend the scope of new and existing regulations but to ensure regulatory parity by eliminating rules and requirements designed to address circumstances that no longer exist."

That came in NCTA's reply comments to the FCC's request for input for its 2016 video competition report, where it sought an FCC clarification that cable systems subject to effective competition are no longer required to carry all broadcast stations on the basic tier.

NCTA said one thing the FCC should not do in the name of boosting one form of competition—in the set-top-box market—is "mandatory disaggregation." It argues that "massive consumer adoption" of apps is already driving access to MVPD content on retail devices, so there is no need to create a government-issue All Vid set-top "straightjacket."

NCTA took aim at Google and others in the Consumer Video Choice Coalition which has been pushing a government-backed All Vid solution as a gateway to video from various sources on-air and online.

"CVCC claims that disaggregating MVPD service, stripping out the MVPD’s UI and replacing it with a third-party guide is necessary for retail success," NCTA said. "But as DSTAC reported: 'no evidence whatsoever has been presented to the DSTAC to indicate that such a guide is the recipe for success of competitive navigation devices, or that customers want the device maker to block available MVPD services.' Instead, such an approach would force pay-TV providers to re-architect their networks, rip up their programming contracts, and be subjected to another costly and counterproductive technology straightjacket – the sort of thing usually decried by Silicon Valley innovators."

NCTA took aim at commenters who supported the FCC's regulation of interconnections (Netflix) and giving OTT services MVPD status (FilmOn). It slams the National Association of Broadcasters call for a "careful examination" of consolidated cable as a "tiresome harangue."

NCTA said cable operators should no longer be required to carry broadcast stations, particularly retrans stations, in the basic tier. "None of cable’s competitors have such an obligation, and the requirement hampers cable’s ability to compete for customers who would prefer not to have to pay for such stations," NCTA said.

Arguably the FCC has already effectively lifted that requirement. Earlier this year it reversed the presumption that cable operators were not subject top effective local market competition, and NCTA points out in the filing that the FCC has said that the basic tier requirement doesn't apply to systems facing effective competition.

"While all cable systems must continue to provide “must-carry” stations to all subscribers, and while there certainly are other outdated regulations and requirements that should be reviewed and eliminated, the inclusion of all broadcast stations on a mandatory basic tier is one of those requirements that, at least where effective competition exists, has expired," NCTA said.