Why the FCC's AllVid remains a really bad idea

[Commentary] Referred to as "AllVid," the Federal Communications Commission's idea was to force all cable and satellite video providers to establish a common interface for connection to televisions, DVRs and other smart video devices. First, in contrast to the common view that the self-supply model of set-top boxes is anticompetitive and anti-consumer, the set-top box conveys no market power to the cable and satellite video provider, even under the assumption of monopoly supply for multichannel services. If the equipment can be produced more efficiently and sold at a lower price in a competitive retail market, then the provider will embrace such a market to the benefit of both provider and the consumer. If the equipment can be sold at a lower price through self-supply, then the providers prefer that option, also to the benefit of both provider and consumer. Third, a government-directed commercial market for set-top boxes is unlikely to provide substantial gains in terms of lower costs, lower prices or increased innovation. Finally, advances in technology now allow consumers to access lawful content from both multichannel video providers and "Over the top" providers on an array of third-party devices through dedicated apps.

At bottom, the notion that AllVid makes any economic sense, just as folks thought that its predecessor CableCARD regime made any sense, is misguided.

[Spiwak is the president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies]