In a few days, the Federal Communications Commission will vote on the government's strict new net neutrality rules for Internet providers. And while the proposed regulations are mainly focused on whether companies like Comcast can block or slow Web sites, a small piece of the rules could give the government wider authority over television programming — and by extension, your TV experience. Here's how.
The FCC has a mission: To promote the rapid deployment of high-speed Internet. Under this mission, codified in Section 706 of the Communications Act, it's seen fit to knock down what it sees as barriers to the rollout of broadband. The FCC's net neutrality rules partly lean on this power. And it's also what the agency is using to try to knock down state laws that prevent cities from selling their own Internet service.
Now, some Washington lobbyists are beginning to argue that this mission doesn't just cover the Internet. Advocates for pay-TV providers are saying the FCC should use Section 706 to act more aggressively against the companies that produce TV content. Why? Because the pay-TV providers think the content producers are charging them too much for programming — and because programming costs eat into the budget for building, say, cable broadband, what hurts pay-TV providers could hurt the spread of broadband.
In short, if cable companies can convincingly argue that their costs of buying programming are effectively a barrier to broadband deployment, that's a case for federal intervention.
It's a complicated line of reasoning, so let's look at an example. Think of Google Fiber, which is trying to compete with large cable companies around the country. It has said that the biggest impediment to further network buildouts isn't the cost of infrastructure, or getting permission from cities to tear up streets. Instead, what holds Google back the most is having to pay programming networks for video content as part of the bundle it offers to consumers. Google Fiber has said that in some markets, it pays programmers twice what larger, more established cable companies pay for content.
So the pitch from pay-TV providers to the FCC is this: If you really care about broadband deployment, you should make it so we don't have to pay programmers quite so much — then we'll be able to funnel more money into rolling out high-speed Internet.
"If money is extracted from video providers by mega-content companies for more bundling and higher programming fees, that's less money available for broadband expansion," said Matthew Polka, chief executive of the American Cable Association.
Other lobbyists are making the same argument, too.
"We think the market is broken in video," said Chip Pickering, the chief executive of COMPTEL, a trade association for small and competitive communications companies. "The prices are so high, it becomes an impediment to deploying new networks."
Some at the FCC appear receptive to this message. Mignon Clyburn, a Democratic FCC commissioner, said Thursday that the FCC should do more to resolve disputes between pay-TV providers and programming networks. Tom Wheeler, the chairman of the FCC, has said previously that he's interested in slowing the rise of some of these programming fees.
If the FCC someday decides that yes, the cost of TV programming is hurting the rollout of broadband, it's not that big a leap to regulatory action. Those actions could have powerful implications for what you pay your cable provider, among other things.
The FCC declined to comment.