Prof. Says TV Policy Must Get Darwinian
STANFORD, Cal. -- Without new rules for TV and Internet video distribution, incumbents’ power will thwart a technology revolution and hurt the U.S. economy, said a Columbia U. law prof. The tools for change are wide-open compulsory licenses, a net neutrality doctrine and federalized franchising or none at all, Timothy Wu said late Mon. at Stanford Law School.
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Old broadcast models, especially TV stations, are guarded by “well meaning” policies on localism, universalism and an “attenuated” idea of diversity amounting to “a lot of channels to choose from” -- the notion that once led the FCC to see UHF as the end-all, Wu said. Hallmarks of a better framework have emerged among “progressives,” he said. Besides decentralized innovation as contrasted with the top-down vision enshrining broadcast TV as well as AT&T before divestiture, these include cultural democracy and survival of the fittest. “The best technology… or the best competitor should win in the end,” he said, endorsing “a neutral playing field.”
The goal is “to make it easier for any entity to get into television in a real way,” said Wu, who worked as technical marketing dir. of router company Riverstone Networks after clerking for U.S. Supreme Court Justice Stephen Breyer and influential 7th Circuit Judge Richard Posner. But “enormous forces” are determined “to make the battle for the future of television as unfair as possible,” he said.
Wu told us net neutrality would be the easiest of the principles to establish -- creating a viewer’s right to get any lawful shows or other offerings over any network coming into the home -- because it already has strong support at the FCC and in Congress. Toughest to achieve, he said, would be compulsory licensing to ensure all players -- including Netflix, Apple iTunes, peer-to-peer video and telcos -- the same access to programming as cable and satellite. Meanwhile, federal compulsory licenses for cable and satellite give them a sharp edge over new entrants, Wu told his audience, though Netflix benefits from copyright law’s “first sale” doctrine. NAB, NCTA and USTelecom didn’t immediately comment.
“You need to get access to a certain amount of content,” and cable and satellite are guaranteed TV programming, said Wu. Apple is uniquely positioned among the upstarts, since CEO Steve Jobs also runs Pixar, but even Apple had to struggle for its iTunes deal with Disney, Wu said. Keeping cable, satellite and phone firms from determining which programming other services can deliver to viewers is “a central question,” he said: “The best judges of consumer welfare actually end up being consumers.”
The rationale for local franchising is “nonexistent,” Wu said. The best argument is the unattractive look of too many lines on utility poles, he said. All the rest come down to the premise that TV is a “natural monopoly,” and “they're nothing more than simple barriers” to competition.
Stations directly reach only 19% of the audience over the air, but hold many of the cards even against giant cable firms and telcos, Wu said. Affiliates have been “the chokepoint” for TV programming thanks to their network exclusivity deals, with cable and satellite dependent on the stations. And the affiliates have “enormous political power,” Wu said.
Other incumbents have sway in Washington, “but local broadcasters, I think even among lobbyists, strike fear” as the “Tyrannosaurus rex among dinosaurs.” Ultimately, station power grows from the leverage over members of Congress rooted in control over political advertising rates, he said.
But now a system only tweaked since the mid-20th century to accommodate cable and satellite faces fundamental assault from all sides, Wu said. Cable and satellite have “plans to incrementally improve their services,” with enough restraint to keep VoD from destroying the spot commercial model or HDTV from making their analog plant obsolete too quickly, he said. SBC’s and Verizon’s “idea is to become basically like cable companies,” and the “speed of deployments is a complete mystery.” DTV is discussed “as if it’s the Second Coming,” and stations hope to use it to displace cable -- but they're also loath to let go of analog spectrum and markets, Wu said.
Apple and Netflix go further than those infrastructure players, to offer video programming far beyond TV fare. But TiVo, Cisco and Microsoft seek to go much further still, with peer-to-peer technologies that would let users swap any content they want, he said.