Rep. Steve Scalise pulled out his smartphone, and then he held up an old, blocky cellphone.
“While I can do things today we all take for granted, just remember that the law was written when this device was your communications device, and so I think when we start this conversation it’s real important to remember that technology has changed dramatically, yet the law hasn’t changed at all,” Scalise said.
The House Subcommittee on Communications and Technology discussed the future of video during a hearing Wednesday and whether regulations should be changed or expanded.
Representatives from eight companies or organizations that deal with video testified – DISH Network, Sky Angel, Netflix, Roku, Public Knowledge, Hearst Television, the Motion Picture Association of America and the National Cable & Telecommunications Association.
The Communications Act, the 1992 Cable Act amendments and the 1996 Telecommunications Act amendments regulate video.
With advances in technology, the video market is drastically different than it was 20 years ago. At that time, watching video was limited to televisions and theaters. Today, the Internet provides endless possibilities, allowing viewers to watch video in several ways, including on laptops, tablets or smartphones.
Online video has emerged as a new and growing market that does not fall under regulations that traditional media must adhere to. The subcommittee is faced with the question of deciding if these new services and technologies should be regulated, and if so, how.
Rep. Greg Walden, R-Ore., said the subcommittee’s two options are either to deregulate cable, satellite and broadcast companies or expand the Communications Act to cover newcomers to the industry.
The subcommittee chair said he doesn’t believe regulation should be expanded.
“Regulation is not only unnecessary in such a vibrant environment, it can actually harm this nascent competition,” Walden said. “The creative chaos in the marketplace, frankly, is healthy as parties fight to out-innovate each other and win viewers.”
He said if regulations aren’t imposed on new technologies and services then it isn’t fair to continue to impose them on others.
Sky Angel, which allows subscribers to watch video using a television, a set-top box and an Internet connection, is an example of a new service that is challenging the definition of a “multichannel video programming distributor,” or a traditional pay-TV provider.
Sky Angel CEO Robert W. Johnson testified about the issues his company has faced in acquiring access to programming channels.
Johnson said Sky Angel filed a program access complaint with the Federal Communications Commission after Discovery Communications ended their contract early.
The FCC is examining whether Sky Angel qualifies as a MVPD. If not, the company can’t bring a program access complaint against Discovery or other programming providers. He said the FCC is supposed to complete an investigation in five months and it’s been 27.
“We believe that our experience with starting and operating an innovative, new family-oriented video distribution service show that there is anti-competitive conduct in the industry and significant problems with the manner in which the FCC is failing to enforce program access laws and regulations so that a valuable new competitive entrant is facing unfair discrimination,” he said.
An FCC spokeswoman said there is no limit on the time the agency can take to review complaint. She would not comment on the substance of the complaint.
David Barrett, president and CEO of Hearst Television Inc., who testified on behalf of the National Association of Broadcasters, said the FCC’s decision on what qualifies as a MVPD will have far-reaching implications.
He said any rules should apply to newcomers to the market.
“As an industry that creates content, or acquires the right to content, it’s imperative that we have the to right to negotiate over how our content is distributed,” Barrett said.
The subcommittee also discussed the use and possible abuse of broadband data caps. The industry has begun to charge extra fees to consumers who use the Internet a lot on mobile devices.
“As consumers increasingly watch video through broadband, an open Internet that is accessible to all becomes even more important,” Rep. Henry Waxman, D-Calif., said. “We need to carefully examine whether practices like broadband data usage caps are restricting consumer choice or being employed in an anti-competitive manner.”
Netflix General Counsel David Hyman said the subcommittee should carefully examine any policies that could discriminate between traditional companies and newcomers to the programming and transmission markets.
“When you couple limited broadband competition with a strong desire to protect legacy video distribution businesses, you have both the means and motivation to engage in anticompetitive behavior,” Hyman said. “Add to this mix a regulatory and legislative framework largely crafted before the modern Internet era, and you have the makings for confusion and gamesmanship.”
Waxman said any policy decisions would affect the market for years to come.
“Even as we marvel at the incredible advances in technology, we must be mindful that policy choices we make today will impact the video landscape we see tomorrow,” he said.
The committee has held a hearing on the future of audio and plans to hold one on the future of data.
Reach reporter Jessica Sabbah sabbahj@shns.com or 202-408-2735.