June 16, 2016 at 5:00 am ET
As a matter of policy, the Federal Communications Commission (FCC) is committed to diversity. Indeed, it recently launched an inquiry to assess diversity in video programming and what actions might be needed to ensure a healthy flow of programming to serve African American, Asian, Hispanic and other minority audiences.
But even as that inquiry moves forward, the Commission has proposed new regulations for TV set top boxes (STBs) that may make it harder for such programing to be made and reach its audience. In effect, the agency appears to be talking about diversity on the one hand but endangering it with the other.
The proposed rule would require cable TV companies to give free access to their programming lineups and the related “information flow” to third parties such as Google and Amazon, but without any compensation or rules about how and when the third parties would deliver the programs to consumers. Nor would the people who created the programs have any say on what happens to their work. This arrangement would effectively destroy the agreements negotiated by minority programmers and other content creators to ensure fair payment as well as the promotion and channel placement to build an audience.
Instead, the third parties would have free rein to pick and choose which of the cable programs to offer to viewers and which to ignore. Minority-oriented content and other specialized programming with loyal but relatively smaller audiences could be relegated to odd hours or dropped altogether. The news and entertainment shows that people of color have grown accustomed to will be harder to find and less profitable to produce. Ad revenues that support diverse content could dwindle so that many of the individual creators and smaller companies that produce for diverse audiences would no longer be able to make a go of it. The net result would be an irreversible downward cycle in the amount and quality of minority-oriented programming.
TV One, an independent provider of content designed for African Americans, warns that advertisements for its programming could be eliminated and its content could be buried if a third party can circumvent agreements that TV One has previously negotiated with a cable company.
“African-American generated content is already difficult to find on the Internet through Google due to its search algorithm, which some have found appears to place African-American generated content towards the very end of search results. Under the proposed rules, which do not offer content providers any protection from such discretionary algorithms, minority content is likely to be buried on the ‘lowest rung’ of interface search results as well,” TV One observes.
Similarly, the MMTC (The Multicultural Media, Telecom and Internet Council), had told the FCC that the proposal “would jeopardize that programming diversity by disrupting channel placement agreements and other business arrangements, moving niche programming networks away from their known ‘place on the dial’.” MMTC also observes that the FCC proposal “would put control of video programming diversity in the hands of some of the nation’s least-diverse companies.”
These concerns are not limited to minority creators or programmers. Roku, which provides one of the most popular non-cable boxes and might be expected to embrace the new rules, says the proposal is likely to raise consumer costs, reduce choices, and limit innovation.
Roku founder and CEO Anthony Wood argues that the rapid pace of innovation in the TV marketplace is already delivering vast new choices to consumers and forcing cable to companies to “raise their game” to compete. “Soon every piece of video produced for TV will be available to consumers on demand through a variety of competing platforms,” he says.
Members of Congress have asked the General Accountability Office to study the real world effect of the proposed STB rule. The Commission should support that study and delay final action until independent fact-finding provides a more informed understanding of how proposal would affect the future of minority programming and the consumes who watch it. Armed with more data and dispassionate analysis, the FCC would be better positioned to build on its history of embracing diversity instead of unintentionally reversing course.
Ralph Everett is the senior industry and innovation fellow at The Georgetown Center for Business and Public Policy.