Regulation of Distribution

by Carli Blau

This new broadband era that we have now entered is creating a bit of a struggle for the government as it is trying to keep up. While the Internet is currently a neutral space and lacking in regulation, companies are beginning to realize that there may need to be some regulation. The government is also looking to regulate the net. This is called Net Neutrality. It is going to be a very interesting topic in the months to come because large cable companies are pushing for the net to be split, while the FCC and other small internet service providers want to keep the net neutral.  With the Internet being such a big part of distribution of TV, it will eventually have to be regulated somehow, the question to think about is how we are going to do it?

The Senate’s Commerce Committee recently held a hearing to discuss the future of TV and where it thinks it is going. According to the Senate’s Commerce Committee, TV is going to be found in deregulation. “The proposed act deals primarily with deregulating the broadcast industry to eliminate some required coverage mandates and to allow broadcasters to negotiate retransmission rates with pay TV providers just like cable programmers such as ESPN or AMC do.”

The biggest issue of this hearing was the relationship between TV and broadband and how intertwined the relationship is at this point in time. With consumers able to get whatever they want through selection of broadband products, distribution companies, etc., they are not going to settle for paying more than they have to. Therefore, the fight is now going to be all about who has the most power in regards to customers, the broadcast industry or online companies that are planning to distribute television programming all over the internet. [Gigaom]

The scary thing that is going on right here, right now is that TV used to be the biggest storyteller, and while it still may be, it is the Internet that has become the biggest platform for all services. Rather than television being the go-to place for information, the internet is now the place for everything, including TV which has now become just another part of it all. This is going to give the upper hand to online TV distributors, but will definitely challenge and test the relationship between TV distributors and their customers, along with the relationship between customers and the actual TV screen.

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Executives from News Corporation, NBCUniversal, the Walt Disney Company and the National Association of Broadcasters met with some officials from the FCC because they are not too fond of the proposed public interest rules that would make the amount of money that political candidates are paying for TV advertising. Currently there are rules in questions that would mandate that these big TV networks share their details about politial programming, including how much the candidates are paying to run advertising. The networks are collectively saying that, “[C]ompetitors in the market and commercial advertisers may anonymously glean highly sensitive pricing data, which, by law, will represent the lowest rates charged by the station to its most favored commercial advertisers,” adding that they were “[O]pen to discussing other options for keeping sensitive rate information out of the online public file.” [TVNewser]

Another interesting point here is that other distributors aside from television are not mandated to disclose their political information, yet these networks may have to. Despite what the networks had to say however, the FCC mandated the posting of political files online. If everything is moving online, it is only fair that political files be put online for the pubic to see and have access too. This is where the relationship between broadcast and television is becoming so intertwined that it is causing more problems than good for regulators, since they are not quite sure how to handle the relationship just yet.[TVNewsCheck]

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The FCC is dealing with a lot concerning the new relationship between television and the internet, it seems as though this relationship has caused quite an uproar as many people are not quite sure of how to handle it. The F.C.C. bars the use of airwaves that were originally reserved for satellite-telephone transmissions because it says it will interfere with GPS technology. The airspace is currently being inhabited by the GPS devices, and thus far, there is no way to efficiently deal with potential interference. [NYTimes]

The problem we’re going to see more of in the near future is the regulation of space, airwaves and internet servie especially with everything becoming so intertwined with one another. Everyone is concerned with how to please the customers and give them what they want, but if we continue to see regulations, companies are going to be faced with problems.

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According to, the NAB asked the FCC to “liberalize local media ownership limits and not to impose new restrictions on contractual arrangements under which stations in a market share resources or operate in tandem.”   The NAB argues that the FCC should allow common ownership of two TV stations in more markets, particularly because of the mergers that have occurred, and different distribution platforms. “The NAB contended that such arrangements should not be restricted. They “do not threaten licensee control over operations and programming decisions, which are the core principles underlying the FCC’s attribution policies,” it said. “In fact, sharing arrangements advance the FCC’s localism and diversity goals by facilitating the provision of local news and other programming.”

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Verizon recently announced that it is going to sell portions of its spectrum in a number of major markets for its purchase of spectrum but there is a debate concerning whether or not the sale is a plot for approval of cable deals. People are assuming that they decided to sell portions of the spectrum because of issues with the Federal Communications Commission. This also brings light to the current question of whether or not there is actually a spectrum crisis. Verizon’s deals for spectrum “included joint marketing agreements with SpectrumCo (an entity owned by Comcast, Time Warner Cable and Bright House Networks), Cox and Leap Wireless.  Those deals are currently under review by the FCC and the Department of Justice and was the subject of a recent hearing before the Senate Antitrust Subcommittee. ” [AdWeek]

The FCC took a big step recently by shifting a large piece of the spectrum from TV broadcast to wireless broadband. “It unanimously approved rules allowing TV stations to share channels while retaining must-carry and other rights that come with owning a full channel.” The FCC made this decision with the hopes that weaker stations will be encouraged to double up on their channels, turn over their spectrum space to the FCC and participate in other “incentive” auctions. One of these auctions is the commission said it would recover up to 120 MHz or 40% of all TV spectrum. Interestingly enough, many broadcasters are not interested in giving up spectrum. [TVNewsCheck]

Things to keep an eye on in months to come is the spectrum scarcity crisis, does it exist and what are the FCC and other broadcast distributors and networks going to do about it, we’ll just have to wait and see.