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Cable Says OTT Disparity Needs Deregulatory Fix

Cable operators are using the rise of both over-the-top video and the novel coronavirus in arguments to the Federal Communications Commission for help in deregulating the market for both video and broadband services.

It has been a couple of years since video streaming overtook traditional cable and broadcast TV as the top video destination for children and families, and cable operators want the FCC's rules and regulations to catch up to that reality.

(Image credit: NCTA)

Back in 2018, NCTA-The Internet & Television Association noted the turning point and tried to get the FCC to adjust children's advertising rules accordingly as part of a revamp of those rules.

For one thing, cable operators are limited in how they can display website addresses in children's programming, even as the web is where most kids are accessing video.

"Advertisers are following children’s viewership to new online platforms," NCTA told the FCC back in 2018, while cable-network programmers continue to be hamstrung by the agency’s advertising restrictions.

Despite that pitch, the FCC chose not to undertake an extensive revamp of cable ad rules as part of its adjustment of the children’s TV regulations.

Fast-forward to today, when the FCC is compiling data for a congressional report on competition in the communications marketplace.

NCTA is again pushing the FCC to loosen up the kids‘ programming rules, and again citing over-the-top providers for leveling what the cable trade group calls a playing field tilted toward online video, though without seeking regulations on the latter to level the playing field. NCTA under president and CEO Michael Powell has historically tried to steer clear of seeking new rules on competitors, as a regulatory arms race hurts both sides. But cable operators are also moving over the top, so it would be against their interests to seek new regs on a technology that most see as their future.

Equal Treatment for Equal Services

NCTA is telling the FCC that similar services — multichannel and OTT video — should not have dissimilar regulatory treatment, public-interest obligations and customer-service rules, for example.

The trade association says that in addition to being arbitrary and capricious, such treatment skews the competitive marketplace, with cable operators being the ones getting skewed.

For example, it said, none of the "myriad" children's TV ad restrictions on cable apply to OTT streamers like Netflix or Amazon or YouTube.

The cable industry (operators and programmers) has argued that disparity is particularly problematic, after the industry spent billions of dollars "developing trusted brands that serve the programming needs of parents and children."

On the broadband competition side, NCTA draws a direct link between deregulation and the industry’s success at handling the extra load that the COVID-19 stay-at-home population has put on their networks.

The argument is that it is not regulation, but all the competition from mobile wireless, offering speeds that are catching up with, and in some cases on par with, fixed broadband. The competitive pressure — and speed gains — will only increase with the migration of mobile to 5G. Then there are the low-earth-orbit satellite services, including the SpaceX venture backed by Amazon, that could provide 1-gigabit speeds.

Competitive pressure has forced cable operators to invest in their networks and technology to stay ahead of the curve in order to retain (and add) broadband customers, NCTA says. That investment has paid off in the time of coronavirus.

“Even as there have been substantial increases in the amount of traffic on the network and substantial shifts in peak period traffic patterns, cable broadband networks have continued to perform at exceptional levels,” NCTA said.

NCTA’s online COVID Dashboard, for example, shows that while usage has increased “substantially” since the virus began sending people home to shelter-in-place in early March, “over 99% of the customers of major cable operators have not experienced any material impact.”

While NCTA makes traditional asks, like freeing up more spectrum for unlicensed use and revising program carriage rules and reporting requirements, it also says the FCC needs to add a COVID-related push, but a gentle one, for state action on pole attachments and backing a special Lifeline fund.

As part of an effort to speed pole attachments and various local site reviews, the FCC has put local government officials on a time clock. But, as the FCC points out, those officials might be “delayed or precluded from responding to permit requests in a timely manner because of the crisis.”

NCTA isn’t asking the FCC to lower the boom as it were, but says the agency should consider using its “persuasive powers” to “remind” local officials and pole owners that broadband providers are also actively working to help consumers work and learn from home during the crisis, and a little flexibility on their part would be helpful.

Subsidy Cash Sought

With most broadband providers extending their FCC pledges to help keep low-income residents connected as the pandemic continues, NCTA is looking for help with more subsidy money.

“The current COVID-19 crisis has highlighted the fact that the current Lifeline program is not optimal for the task of enabling low-income consumers to obtain the type of broadband services that would enable them to work and learn from home,” it told the FCC.

NCTA suggested an “emergency” broadband program needs to be created and said the FCC should make it easier for “companies that already have programs focused on low-income customers” to apply for such a fund. That would be the hundreds of ISPs who have promised the FCC to continue to provide subsidized service to a swelling, pandemic-spurred, low-income population.

Absent that, the association said, “some companies may choose not to participate in this important program because of the upfront costs and delay associated with switching to a new qualification and validation process.”

NCTA said that given how much money that might be, without offering an estimate, Congress will probably need to be involved.