Smart Companies Like Disney Show Why the FCC Is Wrong on Set-Top Boxes

It’s hard to see what’s missing at Disney. The giant entertainment company (one of the biggest companies in the world with a $147 billion market cap) already has Lucasfilm, Marvel, Pixar, ABC, ESPN, theme parks, hotels and TV channels galore.

But even Disney, as big and powerful as it is, must make deals with distribution partners such as Comcast, Netflix and Apple to get its movies and TV shows delivered to consumers in the manner they desire. So it wasn’t a huge surprise to many media watchers when Disney CEO Bob Iger announced earlier this month that the company was considering buying Netflix or Twitter in order to have its own distribution platform.

“The biggest thing we’re trying to do now is figure out what technology’s role is in distributing the great content that we have,” Iger told the crowd at the Boston College Chief Executives Club. “It’s one thing to be as fortunate as we are to have [our content] but in today’s world, it’s almost not enough … unless you have access to your consumers.”

Now, Disney may never actually buy either Netflix or Twitter, but the point is that when smart people in the media world are thinking about how to get close to the consumer, they are coming up with creative, market-driven solutions – not by asking the government for favors.

Over the past few years the way we consume entertainment has changed in unimaginable ways. People can watch what they want where they want when they want. Children coming of age today have no concept of a linear TV schedule where you have to be in your living room at a certain time to watch your favorite show. To them the world of TV and movies is just an endless giant living library that can be accessed from almost anywhere.

This kind of creative disruption is healthy for an industry and it’s exciting to see creators and innovators rising to the challenge.

And it’s crucial that this movement not be stopped by the FCC.

The commission has been struggling over the idea of opening up set-top boxes to competition. They first claimed that by letting anyone and everyone access the video streams that feed into your set-top box, they’re going to open up a new world of competition in your living room.

This, on its face, is a preposterous idea — a (flawed) solution in search of a problem. Thanks to apps and devices such as Roku, Amazon Fire and AppleTV, people already have an enormous amount of choice in how they watch TV. And there are more available every day. People who don’t like set-top boxes are free to do without them and still have access to lots of great content.

But as ridiculous as that idea was, it’s new plan is just a little better and needs to be released to the public for detailed review.

The FCC now proposes to put itself in charge of dictating the terms under which content can be licensed. Any TV providers wanting to roll out new features would have to get the blessing of the FCC’s new licensing board, and the commission would claim the power to pick winners and losers among device platforms. Any kind of innovative solution that didn’t meet the FCC’s arbitrary thresholds would face months, if not years, of uphill battles with unaccountable bureaucrats.

Anyone who has ever waited in line at the Department of Motor Vehicles can attest to how slow the wheels of government can turn. By the time the FCC approved new ideas, there’s a good chance those ideas would have hit the market already from companies in other countries or would be outdated by the time they got approval.

The FCC’s approach doesn’t foster innovation; it creates a roadblock. The government should step in when consumer rights are being violated or a market is closed to new entrants, but tinkering with a well-functioning ecosystem is outside the commission’s job description. The FCC has never been involved with program-licensing (and it lacks the copyright authority to do so) and it should stay out now and let companies such as Disney and innovators such as Apple, Amazon, and Roku forge their own way.

They’ll come up with solutions that will be better for consumers everywhere.

Mike Montgomery is executive director of CALinnovates, a nonpartisan coalition of tech companies, founders, funders and nonprofits determined to make the new economy a reality.


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