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CFA to Senate: Cable Power Threatens Over-the-Top Delivery

While broadcast and cable witnesses focused on the
retransmission consent/must-carry regime in their written testimony, Consumer
Federal of America's Mark Cooper is focusing on what he says is the threat of
cable market power over online video distribution.

for the July 24 Senate Commerce Committee hearing on the Cable
Act of 1992 20 years later, Cooper says that the government's cable competition
policy has failed, and the door is open to the "dangerous
possibility" that cable will exert what he calls its anticompetitive, anticonsumer
practices to over-the-top video."

Far from being mooted by competition, as some cable
operators argue, the need for strong regulation remains, he suggests.
"Twenty years of failure to break the strangle hold of the incumbent
broadcasters and cable operators should have reinforced the premises on which
the 1992 Cable Act rested: access to the means of distribution and "must-have"
content are key bottlenecks.

Cooper, a critic of Comcast on at least a couple of fronts,
invoked the nation's largest cable operator in his argument about cable's
power. "After the Comcast-NBC merger and in light of the Verizon-cable
joint venture [Comcast holds the majority stake in SepctrumCo], the prospects
that platform competition will provide the necessary check on the market power
of incumbent content producers and network owners are dimmer than ever,"
he says.

The FCC is currently considering what program access or
carriage rights and responsibilities, if any, to accord over the top video.
That could help determine how strong a competitor to traditional cable OVDs
(online video distributors) will be, or alternately whether online delivery
will give traditional MVPDs a chance to get out from under those regs.

"If Congress intends to legislate in the media and spectrum
area, it must ensure that competition on the small number of platforms is
unimpeded by the market power of the network owners or the dominant content
producers," says Cooper. "Public policy must get back to the principle
that the primary means of communications are available to all on a
non-discriminatory basis," concluded Cooper. "It would be a grave mistake,
another hundred year mistake, to allow the information superhighway to be
turned into a private toll road dominated by one or two network owners."