Broadcasters Benefit From Net Neutrality

Broadcasters scored a great victory in Washington yesterday and it didn’t cost them anything — not one, solitary political chit.

With the blessing and (undue?) guidance of President Obama, FCC Chairman Tom Wheeler led a three-Democrat majority in adopting tough new net neutrality rules aimed at making sure every consumer and content producer is treated equally on the Internet.

“There are three simple keys to our broadband future,” Wheeler said just before the vote. “Broadband networks must be fast. Broadband networks must be fair. Broadband networks must be open.

“These enforceable, bright-line rules assure the rights of Internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission,” he added.

For all the fuming among Republican policymakers about heavy-handed federal regulation and about Obama’s inappropriate role in crafting them, they don’t seem to have the votes to do anything about it.

The only way it possibly gets undone is through the lawsuits that Big Cable and Big Wireless are threatening. And that’s a hard way to go.

Make no mistake, broadcasters are winners.

Sure, they are going to develop and implement a new broadcast standard — ATSC 3.0 — that is going to allow them to bypass the Internet and maintain their independence in the delivery of TV to every screen, big and small.

But they will also remain in the digital business through websites, apps and involvement in TV Everywhere and budding services like CBS All Access.

I am sensing a renewed and stronger interest among station groups in digital services. I should. Digital is, after all, the only part of the local TV business that is significantly growing.

Some stations groups may think themselves big, but, in the world of the Internet and wireless broadband, they are not. They are among many, many content producers desperately trying to be seen and heard in the digital sphere.

The new regulations say that the broadcasters’ services will reach consumers with the same speed as any of their rivals, regardless of size or ownership. Among other things, broadcasters won’t have to worry about Comcast or Verizon favoring their own content as it passed through their pipelines.

Critics of net neutrality say it will retard the development of the Internet and slow innovation. I don’t think that’s true, but if it were, it would be a bonus for broadcasters, who would, let’s face it, be better off if innovation on the Internet ground to a complete halt.

Now, I know some broadcasters may be surprised at something good coming out of the Democratic Administration. “Obama! Wheeler! You’re telling me that those two have conspired to protect broadcasters?” That’s right, although they likely did not have broadcasters in mind when they were writing the rules. Broadcasters are collateral beneficiaries.

More conservative broadcasters may also oppose net neutrality for ideological reasons. Regulation is regulation, after all — government intrusion into the workings of the marketplace, the natural order of things.

But net neutrality will not be the first regulation that has benefitted broadcasters — or been backed by broadcasters.

Consider must carry — the FCC rule, then Supreme Court-certified law, that says that cable operators must carry all local broadcast signals. This has been a cornerstone of broadcast-cable regulation since the 1960s, even though it seems to me (if not the Supreme Court) that it steps on the First and Fifth Amendment prerogatives of the cable operators.

In the early 2000s, major station groups were so fearful of the networks taking over their businesses that they begged Congress to keep a tight lid on how many stations the networks could own. That’s how we ended up with the 39% national ownership cap.

And how about the network rules? At the urging of the affiliates, the FCC essentially said in 2008 it would enforce affiliation agreements guaranteeing affiliates the right to reject or preempt network programming.

I also know broadcasters who long for the days of public interest obligations and cheered Wheeler last year when he amped up local ownership regulations by cracking down on the joint sales and shared service agreements and the duopolies they spawned.

So no one in broadcasting should pretend they don’t love a good regulation.

The NAB recognized 13 years ago that cable’s high-speed Internet service might have to be regulated, even though it was still in its infancy.

Commenting on an FCC inquiry in 2002, the NAB urged the FCC to adopt policies that insure that “consumers have nondiscriminatory access to the broadband service and content providers of their choice, rather than just the broadband services favored by the owners of bottleneck distribution platforms.

 “History has shown that, in the absence of nondiscrimination requirements, platform owners (whether cable operators or telephone companies) inevitably control access to consumers so as to minimize competition,” NAB continued.

The NAB was on the right track then and I once thought that it should become involved in net neutrality when Obama’s first FCC chairman, Julius Genachowski, bought it up.

In retrospect, I see that NAB was wise to stay out of the fray. It’s highly controversial and partisan. Backing net neutrality, especially as defined by Obama and Wheeler, would have put NAB at odds with their Republican allies in Congress and at the FCC.

As it is, they came out on the side of the winners. They still get to pretend they are anti-regulation and they didn’t have spend any of their political capital.

NAB will find other uses for those valuable chits.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.