Opinion

How 2017 Could See Welcome Challenges to Cable TV’s Dominance

When it comes to America’s increasing thirst for the convenience of wireless, evidence suggests that 2017 is going to be a breakout year. Black Friday last month saw $1.2 billion in mobile purchases, marking not only the first billion-dollar mobile shopping day in U.S. history, but also a 33 percent increase over 2015 sales.

In 2016, streaming took over the U.S. music industry, becoming the recording industry’s largest revenue source. As the Wall Street Journal noted in August, “Streaming, once a niche music format, hit its cultural tipping point this summer.”

But nowhere is the change more promising for 2017 than in mobile video. A burst of new mobile usage plans looks to make video watching a normal part of our mobile lifestyles.

That means no more need to linger at a coffee shop just because you need their Wi-Fi to watch your favorite show.

More than anything, what’s driving all these benefits is the rapid emergence of unlimited and “free data” wireless programs. Though varying from company to company, generally these programs allow users to stream data and have someone else pay for it – advertisers, for example, or companies producing the content.

Think of it as a mobile internet version of 1-800 phone numbers. It’s the sort of program that allows you to watch a movie trailer because the movie company, not you, pays for your wireless data.

In 2015, these programs were a relative rarity. But they surged in 2016. At a wireless conference in September, the head of the FCC’s Wireless Telecommunications Bureau said that free data offerings have changed “…more than a dozen times since the beginning of the year.” In the last three months, more changes have taken place. That suggests great interest in the concept from wireless companies and consumers.

Free data or zero-rated programs are not unique to the United States. Facebook launched 0.facebook.com as a basic version of the social networking site that allows customers across the world to access the social network site without charge. The service has proven popular in Africa, the Philippines, Vietnam and Latin America. And in Europe, several providers, including Orange and TDC, have been experimenting with various forms of free data offerings since at least 2010.

The implications of free data or unlimited data options are significant. In 2017, Americans will see economically strengthened alternatives to the dominant cable TV companies – companies that for decades have forced consumers to pay for unused channels and to be confined to cable TV hookups and Wi-Fi connections to receive programming. Consumers’ long suffering from the painful status quo in cable TV service are now presented with an alternate technology that offers a better solution for the viewing public.

That’s worth the attention of officials in Washington, especially the congressional committees that oversee federal internet policy. By fostering internet innovation and tempering federal regulations over internet technology, Congress can best ensure that this progress will continue and consumers will reap the benefits.

Nonetheless, a few outlying groups have taken up an effort to halt free data programs in their tracks. These opponents’ view is that giving mobile users new choices on accepting something free may create marketplace unfairness and that the mobile internet will be harmed as a result.

But the growth of things like 1-800-numbers in the 1970s and 1980s didn’t ruin the phone system. If anything, it hastened improvements by bringing in a new revenue source for the phone companies and a commensurate reduction in phone charges to the consumer.

That is another key issue for federal officials, because the country is on the verge of a major – and expensive – build-out of new wireless technology. This new technology is called “5G,” and by one estimate from 2015, companies will spend more than $100 billion by 2025 deploying it.

For Congress and regulators looking to make U.S. wireless service better and more affordable, unlimited mobile data programs may achieve both goals. Recent history has shown the negative effects on consumers that come from federal meddling with the internet. This is no time for government officials to constrain free data’s growing promise.

 

Barry D. Umansky, a former Washington-based communications attorney, is a senior fellow and senior policy counsel with the Digital Policy Institute, a communications research organization created in 2004. Heather D. Vaughn, with extensive management experience in several business sectors, is a DPI graduate assistant in the Center for Information and Communications Sciences masters program at Ball State University.

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