FCC’s McDowell: New Distribution Models Will Trump Regulation

The television market is delivering its own version of ala carte video, via the Internet, without the help of the government, so regulators should resist the temptation to think they can "outsmart an unfettered and competitive market," according to Federal Communications Commission member Robert McDowell.

In a speech in Los Angeles March 27 to the Tech Policy Summit, the commissioner noted that studies indicate that 25% of Internet users have streamed full-length TV episodes in the last three months. On-demand viewing is migrating to mobile phones, too, he said.

That makes the video marketplace more competitive than ever, with consumers able to obtain content from sites including Hulu, Joost, Veoh, MeeVee, Dailymotion, Gofish and Imeem.

"Would these developments exist today if the government had tried to engineer them through mandates? Probably not," he said, according to a transcript of his speech.

He predicted that attempts to force ala carte programming mandates on distributors would create higher rates for customers, citing one Wall Street analyst's report that ESPN could cost $25 a month if bought alone.

A mandate would likely be shot down in court on First Amendment grounds, he added.

As an example of the unintended consequences of regulation, McDowell cited the recently concluded spectrum auction. Open access and public safety requirements layered on the spectrum for license "traded the benefits of rural deployment by small and regional licensees for—at best—speculative gains."

McDowell also wants engineers, not government, to determine whether there are uses for TV "white spaces," the unused space between TV channels. Science alone should resolve that issue, he said.

"Although sometimes politically difficult, the wiser choice is to equip the private sector with the freedom and flexibility necessary to resolve challenges and satisfy consumer demand on its own, while, at the same time, remaining vigilant—and ready—to jump in to resolve genuine harms that cannot be addressed any other way," he said.