News

Breaking the Cable Bundle

06 Mar, 2015

Streaming video over the Internet competes with the high-priced cable bundle. With streaming video over broadband, consumers pay for what they want, not what the cable company packages together. Online video streaming is growing, as people drop their cable subscriptions in favor of Netflix and other online video providers.

But there’s one problem. Cable companies that are also programmers try to protect their cable bundles by refusing to sell their programming to online distributors.

The FCC has proposed a fix to this problem. The agency proposes to expand an existing rule that requires cable companies to sell their programming to any other non-affiliated “multi-channel video programmers” (MVPD), meaning other cable companies or satellite companies.

The FCC’s proposal would expand the definition of MVPD to include online video distributors. Until now, to be considered an MVPD, video service providers had to control a “transmission path” – as did cable and satellite companies. But the FCC’s proposals -- supported in recent filed comments by the Consumer Federation of America along with other media groups and online distributors -- would expand the legal definition of multi-channel video programming distribution (MVPD).

Mark Cooper, CFA’s Director of Research, said, “By granting online video providers the same access to programming afforded to traditional MVPDs, the Commission is poised to unleash a new generation of innovation in online video, creating greater choice and value for consumers.”

CFA sees the current rules as a bottleneck to broadband growth. Now, consumers must purchase either separately or as a high-priced bundle both Internet access and TV through cable, satellite or fiber.

But, adding online video providers to the program access rules held by MVPD will aid both consumers and drive high-speed broadband expansion.

“Because consumers will benefit, broadband adoption will increase,” wrote Cooper. “Making video services more responsive to consumer demand will be an important stimulus to the virtuous cycle that the FCC and the courts have identified as central to the spread of broadband. As innovative ‘edge’ companies develop applications they stimulate demand which elicits more investment in the communications facilities. As network capacity expands and functionality increases, edge companies create new applications that stimulate more demand and the cycle is repeated.”