Satellite TV's special circumstances are history

27 February 2016 by Steve Blum
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For more than 20 years, satellite television companies have gotten a pass on many of the federal regulations that apply to their cable competitors. There was a lot of righteous rhetoric in those days about why Direct Broadcast Satellite was unique and should be allowed to live by different rules. But the underlying thinking was that satellite companies were small, cable companies were big and it was in everyone’s interest to foster a competitive alternative.

Those assumptions no longer hold. The two surviving DBS companies, DirecTv and DISH, have more subscribers than any cable company save Comcast. Only DISH remains independent, now that AT&T has absorbed DirecTv. Now, the Federal Communications Commission is planning to treat DBS and cable identically as it writes new rules opening up the set top box market

In the First [1998] Plug and Play Report and Order, the Commission exempted DBS providers from our foundational separation of security requirement because “customer ownership of satellite earth stations receivers and signal decoding equipment has been the norm in the DBS field.” This meant that DBS was also exempt from most of the rules that the Commission adopted in the Second [2003] Plug and Play Order. Unfortunately, in the intervening years the market did not evolve as we expected; in fact, from a navigation device perspective, it appears that the market for devices that can access DBS multichannel video programming has devolved to one that relies almost exclusively on equipment leased from the DBS provider. Accordingly…we tentatively conclude that any regulations we adopt should apply to DBS.

The plug and play orders were the FCC’s first attempt at breaking down the walled content gardens that network operators have built over the years. As acknowledged in the current FCC proceeding, those efforts didn’t work so well. This third try might not either. But treating all network owners the same is necessary if there’s to be any hope of success.

Back in the day, I wrote a lot of that righteous rhetoric. I’m proud to say that much of it remains as pungent today as when it was penned. I’m not an innocent bystander.