Policy

Baker: Cable, Satellite Need Freedom To Package Programming

10/07/2010 1:06 AM Eastern

FCC Commissioner Meredith Attwell Baker Wednesday stood up for cable operators' freedom to package their programming as they see fit, argued that the government should not rush to regulate online content, and suggested there were online speech implications to the network neutrality debate that bear close inspection.

That came in a keynote speech to the Media Institute Wednesday night in Washington.

"Content providers and distributors have First Amendment rights about how their content reaches their audience that must be respected," she said. "ESPN, Comcast, and DirecTV are speakers, and must remain free to create compelling programming in packages of their own choosing."

She pointed to the Supreme Court's finding that when government defends its speech regulation, its defense must be more than that there is a "potential problem to be cured," adding: "We must protect that heightened standard.

Baker's central point was that quality content is not free. She said that Googling "freeTV shows" yields over 300 million hits (304 milllion at last Googling). Next, she said, try Googling 'high-quality, expensive TV programming" and the result is zero hits. She said that more people last year watched Dexter and Heroes illegally than legally. "It is next to impossible to compete with free," she said, "yet this is the central challenge" to so many.

The iPad may be a remote now, but next year it will be a fully functioning screen, she said. "And the year after that, who knows." Consumer and business opportunities are endless, she said, but added that the final form, pricing, and packaging are still an unknown.

The current system may support a $30 billion program marketplace annually, but it is unclear where the revenue will come from to pay for high-quality programming in an online world, said Baker.

So what should the government response be? "Our collective video future is best shaped outside the Beltway,"she said.

Baker conceded that the evolution of online content clearly merits the government's attention, as it does that of Wall Street and Madison Avenue. But that attention and regulatory action are "two very different creatures."

Baker said that the average consumer has a $58 monthly video bill and watches over 300 hours, and that we all complain about our bill. But she said there is a value proposition. It would be impossible to reproduce that lineup for online rentals, even with Apple's 99 cent price point. But while they may not be able to replicate cable's value proposition, she said, the new video platforms are asserting "positive pressure" on existing services to become more consumer friendly.

The government needs to approach issues of online video more holistically, she argued, and must resist a "law and order, ripped-from-the-headlines pull to investigate, regulate and pass muster on new technological developments or viewing opportunities."

She said there are "too many unproven platforms, untested business models, and undetermined consumer demand to pick winners and losers by regulation.

But the government does have a definite role, in partnership with industry, to prevent content theft. Baker said consumers need to be educated that "digital shoplifting is illegal," adding that any net neutrality rules must not "chill effective curbs of illegal content online."

On the network neutrality issue, she said Internet openness translates to limited government intervention in what is a "true vehicle for free expression and opportunity."

In an apparent reference to the Title II reclassification debate, Baker said that in the past year "we have seen tortured semantics to try and carve broadband pipes out of the Internet within the net neutrality debate." She called it "wordplay with respect to online video access," and said "we must fully appreciate the broader consequences of any move toward government supervision of speech online.

September