Free Press Calls on Feds to Halt TV Innovation

by on January 4, 2010 · 12 comments

Free Press, the radical regulatory activist group founded by Marxist media scholar Robert W. McChesney, has never seen a media or technology regulation they don’t like, but their latest effort to have the feds halt innovation is shocking even by their standards. According to The Washington Post:

Free Press and other public advocacy groups are sending letters Monday to the Justice Department and the Federal Trade Commission calling for a probe of the “TV Everywhere” plan by cable, satellite and phone companies that brings television shows and movies to computers and devices, but only for those that subscribe to both television and high-speed Internet services.

Think about this. “TV Everywhere” is still in its cradle, having only just been launched recently. It will give multichannel video distributors a chance to find their footing as millions of consumers continue to “cut the video cord.”  And it would provide consumers with ubiquitous access to content over the Internet while also ensuring that content creators are compensated for their programming.

OK, so what’s wrong with all this again? Why would we want federal antitrust officials throw a wrecking ball into this innovative new business model?

What’s so galling about this is that Free Press and these other “media reformista” groups are constantly harping about how struggling media operators need to “change their business models,” and yet those groups would tie the hands of media creators and distributors at every juncture. No liberalization of old rules would be allowed if Free Press had their way, and new regulations would be layered on prophylactically to disallow any future marketplace evolution or innovation.

So, what is the Free Press alternative if no private restructuring or innovation is to be allowed?  Can you say “public option for the press“? Free Press has proposed an industrial policy for journalism and for “saving the news” that includes over $50 billion in subsidies for the Corporation for Public Broadcasting and other bureaucracies, a “journalism jobs program” for that would be part of AmeriCorps, a variety of new tax incentives for struggling media operations or individuals who support favored institutions, and an assortment of government incentives to encourage local ownership and media divestiture (by handing over control to smaller operators or minority-owned groups). And in an essay Robert McChesney penned with John Nichols of The Nation last year, the price tag for their proposed “press infrastructure project” was over $60 billion.

Hmmm, let’s see… we could spend $50-$60 billion for a state-subsidized press, or we could allow private marketplace experimentation with innovative new media business models.  I would hope the choice would be an easy one.

  • http://www.skipoliva.com/ Skip Oliva

    Great post, Adam. I'd add that these groups aren't really calling for regulation – they're calling for endless FTC/DOJ “investigations” that would not only force companies to divert resources away from meeting demand and towards attorneys and lobbyists; it would also mean that actual decisions are made behind closed doors by mid-level FTC/DOJ lawyers and whatever interest groups have captured their attention.

    As with all things antitrust, the end result will be a patchwork of haphazard antitrust theories, “consent orders,” and individual regulator statements that won't add up to anything remotely coherent.

  • mwendy

    Agreed on “Government by Consent Decree” – bad stuff for most all involved (except the government, of course).

  • MikeRT

    And yet they can't even get Congress to take sweeping legislative action to break up local and state regulations that prevent competing telecoms and cable companies from moving into new locales…

  • http://www.techliberation.com Adam Thierer

    Here's an outstanding essay on the same subject by Sam Diaz of ZD Net. He argues:

    The TV industry is in a state of rapid change. No one knows where this is going – subscription models vs advertising models, set-top boxes vs Web-connected TV screens, or even the rise of cloud-based on-demand access. Instead of jumping in and crying antitrust to the feds about the TV Everywhere efforts, we should be giving the traditional players a chance to stay in the game and experiment with a model that just might work.

    They know, just as well as you and I, that there are plenty of options out there for video entertainment. If they want to keep the customer base they have, they’re going to have to not only give the customers an experience they’ll enjoy, but they’ll also have to do it for a price that makes all parties – including the viewers – happy. Otherwise, why would we ever agree to pay?

    It sounds to me like TV Everywhere is an example of a free market evolving and adapting with changing times. Washington would be wise to leave it alone and watch to see not only where it goes, but also what it spawns.

    Amen, Sam! I couldn't agree more.

  • http://www.techliberation.com Adam Thierer

    I also like this hard-nosed response by Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association (NCTA):

    The fact that market participants are experimenting with models in addition to fee or advertiser-supported models is not a sign of anti-competitive conduct. It is a sign of a dynamic and rapidly-changing market in which no one knows the ultimate outcome. Free Press may prefer one video distribution model over another. But that is for the marketplace – and content owners exercising their rights to distribute their content in the manner they choose – to sort out. A model that would give consumers the option to get more value – by access to online content – as part of the TV subscription they already pay for is something that consumers should have the right to embrace or reject.

    Absolutely correct. Free Press is basically asking Washington to pick winners and losers in terms of the business models for this fast-moving sector. Big mistake.

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  • geeyore

    Adam said: “So, what is the Free Press alternative if no private restructuring or innovation is to be allowed? Can you say “public option for the press“?”

    It's quite neato that America's Socialists and progressives now couch their discredited Marxist-Leninist plotting and scheming under the rubric of “public option.” Whereas in another time and place we simply called government-run newspapers by their proper names: “Commie propaganda” and “Red journalism.”

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  • rosymarshal

    The practice of describing a power plant with the number of homes it can serve is indeed misleading. It should stop. How much power does a home use? There is no proper definition of this. The Watt (of MW, KW) is still the best way to go.
    knowledge management

  • john

    TV Everywhere is an attempt to *prevent* consumers from cutting the cord by keeping over the top video tied to an obsolete model. It's motivated by an attempt to prevent competition in the video market.

    There is no technological reason for video services to be primarily offered by facilities operators, and consumers would clearly benefit if video services were as competitive as, say, online news sources.

    Those content producers (that are not also cable companies) are being sold a bill of goods on how the TV Everywhere model will someone protect them. You'd wish that content producers would realize that a truly competitive market for video subscriptions would be good for them. I think people in that industry have been blinded by years of outdated must carry and so forth.

    I have no comment on whether TV Everywhere is illegal, not having read the filing. Antitrust is a tricky area. But it seems odd that a (rational) attempt by yesterday's technology to extend its dominance into tomorrow is described by you as being “innovation.”

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  • john

    TV Everywhere is an attempt to *prevent* consumers from cutting the cord by keeping over the top video tied to an obsolete model. It's motivated by an attempt to prevent competition in the video market.

    There is no technological reason for video services to be primarily offered by facilities operators, and consumers would clearly benefit if video services were as competitive as, say, online news sources.

    Those content producers (that are not also cable companies) are being sold a bill of goods on how the TV Everywhere model will someone protect them. You'd wish that content producers would realize that a truly competitive market for video subscriptions would be good for them. I think people in that industry have been blinded by years of outdated must carry and so forth.

    I have no comment on whether TV Everywhere is illegal, not having read the filing. Antitrust is a tricky area. But it seems odd that a (rational) attempt by yesterday's technology to extend its dominance into tomorrow is described by you as being “innovation.”

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