George Mason University
Legacy TV Regulations Push TV Bills Up and Threaten Online TV
During the latter half of the twentieth century, over-the-air broadcast TV and cable TV dominated the US television industry. As these industries expanded, from three major channels to dozens, Congress and the Federal Communications Commission slowly built a regulatory thicket that served to protect various regulator prerogatives, social goals, and entrenched business interests.
Since 2000, technological progress and the development of the Internet have led to competitive TV alternatives from telephone companies, satellite providers, and online video providers, as well as the creation of hundreds of TV channels. As a result, since 2002, cable TV operators have lost nearly 15 million subscribers and significant market share as consumers have sought out these newer options. Despite these pro-consumer outcomes, members of Congress and officials in the FCC are considering applying legacy cable and satellite regulations to online video streaming providers, which currently face few restrictions. As long as these legacy regulations remain, determined regulators—with the encouragement of some incumbent operators—will be tempted to regulate online TV. Online video helped bring about today’s Golden Age of Television, in which consumers have access to more high-quality television shows and movies than ever before. There should be a level playing field where all video distributors, like online video distributors, are free to contract with programmers, thereby creating flexible, inexpensive TV packages that consumers want.