Video Competition and Mass-Media Regulation in the Age of Public
Carriage and Digital Convergence

Howard Shelanski

This paper examines
(1) how the FCC's early decisions to forbear from applying
mass-media regulation to video carriers other than broadcast
licensees affects regulation of new video-distribution technologies,
(2) how those decisions will grow in importance with digital
conversion and convergence, and
(3) how they in turn affect video competition and the continued
application of traditional mass-media regulation.
The paper shows how the Commission's decisions have opened the
door to vigorous video competition and greatly reduced the
relevance and effect of mass-media regulation.
The FCC has also in several respects tilted the playing field in
favor of non-broadcast video carriers and against conventional
broadcast licensees, although those regulatory disparities may,
in the end, have little competitive consequence.
The broadcast system was long the only mass distribution system
for audio and video. Twenty five years ago, the Commission was
still confidently separating messages that were suitably "public"
from those that were "private" or of narrow interest and permitting
mass distribution -- by broadcast licensees -- only of the former.
The FCC correspondingly retained its long-standing rules requiring
that the content distributed by broadcasters be "in the public
interest," "fair," and in the service of "local" needs.
In the last 15 years, however, new technologies and the regulatory
approaches to those technologies have effectively unbundled
mass-distribution conduit from content.
For example, in 1984, the Commission questioned its ability to impose
any conditions on who transmits what via technology that in some
ways distributes content more efficiently than conventional
broadcast -- direct broadcast satellite (DBS). The FCC eventually
decided to forbear from imposing certain constraints on DBS that
were arguably dictated by the Commission's mass-media precedent.
DBS operators were thus freed to sell carriage to private
customer-programmers who could thereby replicate, with only
limited qualifications, the public messaging for which broadcasters
had long been specially licensed and regulated. They could do so,
moreover, free of many rules with which conventional broadcasters
must comply. The DBS proceedings and related precedent have
consequences for video competition and for how, and to what effect,
the FCC will continue to apply its mass-media rules.
This paper examines those competitive and regulatory consequences,
especially in light of digital convergence and the increasing
avenues for video distribution coming into existence
(e.g. broadband telephony and cellular video).