Seth Cooper

[Commentary] The Federal Communications Commission released its 18th Video Competition Report on Jan 17. Data points in the report demonstrate persuasively that the video services market is characterized by competition among cable, satellite, and telecommunication providers of video subscription services as well as disruptive online video services. The market also is being transformed by the proliferation of media streaming devices and video apps.

Yet for all the technological advancements and proliferation of choices now available to consumers, much of the video market is still subject to regulatory restrictions that originated in the early 1990s, if not earlier. These regulatory burdens, and the uncertainty posed by the threat of new regulations based on leftover cable analog-era perceptions, impose costs and inhibit investment in advanced digital technologies and business models.

[Randolph J. May is president and Seth L. Cooper is a senior fellow of the Free State Foundation]

[Commentary] When Congress has an opportunity to eliminate outdated, unnecessary, and constitutionally problematic regulations, it should consider doing so. Congressional legislation reauthorizing the Satellite Television Extension and Localism Act (STELA) offers just such an opportunity.

Section 623 of the Communications Act contains basic tier regulations that are relics of a long bygone cable "bottleneck" era. STELA is considered "must-pass" legislation because it contains the framework for retransmission of broadcast TV content by direct broadcast satellite (DBS) providers. Some suggest that Congress should keep the STELA bill "clean." Here "clean" means extending provisions scheduled to sunset at the end of 2014 while avoiding any reforms of legacy video regulation.

Congress shouldn't be rigidly wedded to any artificial principle in order to obstruct genuine regulatory reform. Rather, it's a sound principle that burdensome government regulations premised on market failure should be reduced or eliminated where competitive market conditions actually emerge. Also, Congress could insert into STELA reauthorization a provision to eliminate basic tier cable rate regulation.

But must-buy has, like the rate regulation system, outlived its reason for being. Cable operators should be free to offer consumers video content according to their own editorial judgment, not government dictates. Congress should keep an open mind about using STELA reauthorization legislation as a route to regulatory reform for video services. Through STELA, Congress could tidy up its policy toward cable services by eliminating rate and must-buy basic tier regulations.

[March 7]