FCC Should Remove Legacy Video Rules, O'Rielly Tells Media Institute
The FCC should initiate a rulemaking to reform “unnecessarily onerous” pay-TV effective competition rules, said Commissioner Mike O'Rielly in a speech on regulation of the video market at a Media Institute luncheon Thursday. Along with effective competition, the FCC should relax its media ownership and foreign ownership rules, and consider eliminating the sports blackout rule, O'Rielly said. An NPRM proposes to end the blackout rule (CD Dec 19 p8). If the commission ignores the current competitive state of the video industry and doesn’t relax rules in that area, it will “look more foolish than an ostrich that has buried its head in the sand,” O'Rielly said.
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Though most effective competition requests are granted because DirecTV and Dish Network fulfill the statutory requirements in most areas, submitting them generates “needless burdens and expense on cable operators and the FCC,” O'Rielly said. The current system has created a backlog and delay in responding to effective competition requests, O'Rielly said. Several companies have complained of difficulties caused by the current system, he said. The FCC should initiate a rulemaking on effective competition “as soon as possible,” O'Rielly said. Over the years at the Media Bureau, a backlog of such requests will build up and then be whittled down (CD June 5/12 p4), and more recently the bureau has been granting unopposed requests in periodic batches. Such release from regulation means cable operators no longer must seek municipal approval for certain types of rate increases.
Increasing competition in the video market is why recent FCC orders tightening sharing agreement rules and ending the 2010 quadrennial review are wrong, O'Rielly said. “The FCC is required to review these rules every four years,” he said. “I am not aware of any precedent that allows a federal department or agency to decline to meet a statutory deadline simply because it doesn’t want to comply.”
O'Rielly blamed shifting FCC and Media Bureau sharing arrangement policies for Sinclair’s recent announcement that it would shut down several stations associated with its deal to buy Allbritton’s TV stations, which he called “devastating.” The commission shouldn’t further burden broadcasters by issuing a rule eliminating the UHF discount, as was proposed in an NPRM last year (CD Aug 14 p1), he said. Instead, any consideration of such a rule should be part of the commission’s review of media ownership rules and should include an examination of the broadcast cap, he said.
The commission should further relax foreign ownership rules, O'Rielly said. The agency agreed to let foreign companies own more than 25 percent of a U.S. broadcaster, in O'Rielly’s first vote as an FCC member (CD Nov 15 p3), but access to foreign capital could be further improved, he said. “Encouraging foreign ownership will not only benefit domestic broadcasters, it will also open doors for U.S. investors abroad."
The FCC could eliminate the sports blackout rule without “having any demonstrable effect on the marketplace,” O'Rielly said. Blackout rules can be worked out by the leagues and broadcasters, leaving the FCC “no role” he said. “Instead of using the FCC as a tool to protect the NFL and its revenues, the league and local broadcasters should continue to find ways to ensure consumers have access to content."
The commission shouldn’t get involved in rate disputes in the video market, O'Rielly said. He expressed concern that the commission would be pressured to “reflexively extend legacy regulations to online video distributors.” Doing so would undermine the online video industry, O'Rielly said.