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September 29, 2016

FCC Chairman Delays His Ill-Advised Set-Top Box Proposal


Today was the “moment of truth” on FCC Chairman Tom Wheeler’s controversial set-top box proposal, according to Politico, but at the very last moment he pulled his ill-advised proposal from today’s FCC agenda.

And that’s a good thing. Wheeler’s set top box proposal would force a top-down, government-mandated remake of the video delivery business, and is objectionable for a number of reasons, many of which we have mentioned over the last several months.

  • It is not transparent. The latest iteration of Wheeler’s proposal, which was scheduled for today’s vote, has never been released for review or comment. This is contrary to the spirit, if not the law, governing FCC rulemaking, contrary to the commitments of the Obama administration, and even hypocritical of some of the proposal’s biggest cheerleaders.

  • It exceeds the FCC’s jurisdiction. Wheeler’s latest proposal would literally put the FCC in the business of regulating copyright, writing licensing agreements and requiring broadcasters and content distributors to agree to the FCC’s terms, rather than relying on private negotiation between parties. This is a violation of the right for parties to contract their own terms, and there is no legislative authority for the FCC to get involved in copyright law. And the Copyright Office itself made its concerns clear.

  • It is a solution in search of a problem. Not only were consumers not clamoring for help from the FCC, but the video marketplace today is vibrant and competitive, with an incredible amount of innovation and choice for consumers. Only a government bureaucrat could see such a successful example of the free-market at work and think, “I need to do something about that.”

  • In fact, it creates numerous problems. Wheeler’s proposal would devalue content by exposing it to program-guide manipulation and even competition from pirated content. It would commoditize the delivery of content, removing the incentive of programmers to creatively market their works, and would allow third parties to sell advertising on top of existing broadcast streams. If you like all those annoying and intrusive ads on the sides and bottoms of the websites you read, you would love Wheeler’s new video marketplace.

  • It represents everything that is wrong with federal regulation. The proper role of regulation is to take action when there is demonstrable harm to consumers in the marketplace, not to use the force of government to impose some bureaucrat’s opinion about how a particular industry should work. It frankly doesn’t matter what the FCC chairman or any other regulator thinks about how an industry should develop—in a market economy, that should be determined by the choices made every day by providers and consumers in the marketplace.

Of course, the proposal may have simply been delayed to give Wheeler more time to persuade Commissioner Rosenworcel to support some version of his proposal, so we may see it (or something like it) again soon. At the very least, any proposal scheduled for a vote should be made available for public review and comment. Even better, the chairman should reconsider his ill-advised effort altogether.


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