Mike Montgomery: FCC Proposal Threatens Innovation, TV’s Current Golden Age

By Mike Montgomery

By any standard, it’s never been easier to watch what you want, when you want it, how you want it. Things like AppleTV, Roku and Amazon’s Firestickbring Internet streaming to your television while apps like FXNow, HBOGo and WatchESPN bring television viewing to tablets and phones. The viewing worlds are converging and all of us who love TV are much better off because of it.

Yet for some reason, the FCC is trying to scramble the delicate balance that has enabled this Golden Age of content by forcing cable and satellite companies to undo the intricate deals they have put together with content creators in Hollywood and around the world to distribute the content consumers enjoy access to today and open those streams up to anyone who wants to repackage them.

The FCC claims that the proposal is meant to spur innovation. But that seems to be a ridiculous statement on two fronts.

First, we already have plenty of competition and innovation coming from new streaming boxes. Look at Apple TV, Roku, Chromecast, etc.

Second, the proposal actually undermines the cable and satellite companies’ incentive to innovate. Under the FCC’s proposal, the companies would have to disclose any technological innovation before introducing it. This would give any competitors plenty of time to copy those innovations and implement them on their own.

Would the companies that are clamoring for this deal want that same standard to apply in the tech industry? From my view running a tech advocacy coalition, the answer is a resounding “NO!”

When companies are in startup mode or are introducing a new technology, they intentionally stay as quiet as possible in order to avoid tipping off competitors. Stealth mode isn’t a myth. Establishing an environment where many of the innovators don’t have the option to stay quiet will simply chill any innovation that could respond to consumer demand.

That will be bad news for consumers. Sure, cable set-top boxes are, by and large, not the most beloved piece of equipment people have in their living rooms. But outside of the FCC, it’s a challenge to find anyone who believes the future of content consumption is through a box rather than an app that can be accessed by a myriad of devices.

All indications are that regardless of what the FCC does, cable boxes are going the way of the dodo bird. As TV viewing becomes more and more internet-based the cable and satellite companies will adapt and adjust to meet viewers’ needs.

The FCC’s proposal puts the entertainment industry into a double bind. Not only do they have to open up their proprietary technology and carefully crafted deals to any and all takers but they also have to tip their hand on any planned innovations.

All of this to fix a market that is not broken.

The FCC should take a closer look at what’s really going on in the market and drop their proposal. It makes no sense and won’t help consumers. Disruption and innovation are defining not only the content we watch but the way we watch it. Intervening at this point seems a bad use of policymaking. The smart move by the FCC would be to allow consumers to decide how the ways in which they choose to access video content.

Just because we are living in an era of technology disruption doesn’t mean we need policymakers like the FCC to be unnecessarily disruptive. 

Mike Montgomery is executive director of CALinnovates.