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What Does Net Neutrality Mean For TV?

In the discussion about net neutrality, the subject of TV frequently comes up. Most of the time, it’s because Netflix is the current poster child for high bandwidth usage. A question that doesn’t get asked often enough is whether the fallout from the recent ruling on net neutrality will have any effect on your TV service or the monthly bill. The easiest answer is that net neutrality shouldn’t affect TV service at all. It’s apples and oranges, as far as FCC regulation is concerned. However, just as both apples and oranges would be regulated under ‘fruit laws,’ there are several reasons why net neutrality has some bearing on TV service. Both services draw from the same general pool of FCC regulatory history and guidelines, and both services are largely offered by the same companies. On top of that, the results of the ruling are likely to deeply affect how TV programming is viewed on the Internet, which will have (already has) an effect on TV service. The ruling itself is open to debate. Many take the “win the battle, lose the war” view, meaning the Court of Appeals technically upheld the letter of net neutrality while also opening the door wide for blatantly ‘non-neutral’ practices. Essentially, the FCC regulations are now being interpreted to support Internet service providers who want to be able to charge more for higher bandwidth usage. But the unpleasant corollary is that it also allows ISPs to prioritize some services over others, up to and including blocking any website or app, for any reason. The complex nature of the debate itself, let alone predicting the effects on the Internet, is well beyond the scope of this article. To summarize the most crucial distinctions, the debate is between those who consider the Internet to be a utility, a necessity that should be made available to all without discrimination, and those who consider it to be more or less private property, and the companies that provide the service deserve to decide how much to provide and how much to charge.

Apples and Oranges

Television service is clearly not a utility, no matter how essential a part of your life you think it is. Compared to Internet service, which has been called a basic human right (or at least a civil right), television is purely a luxury. TV isn’t even as essential as telephone service, and the FCC doesn’t consider phones to be a utility either. The FCC has completely different rules for television and Internet. In fact, the FCC has distinctly different sets of regulations for broadcast, satellite, and cable TV service, to account for the different ways the signals are sent and received. It’s an interesting distinction, but a difficult one to pin down. The FCC doesn’t list any other types of “information service” aside from the Internet, and this alone makes ISP regulation open to debate. Having said this, it must be noted the television infrastructure has been officially neutral since the Telecommunications Act of 1996, the same legislation that established the first principles of Internet regulation. Until then, cable companies were more or less free to deny competitors from using their cables.

The Effects

There’s no denying that net neutrality is squarely aimed at ISPs and media content providers. These companies also enjoy a system of regional dominance in which local competition for TV service or Internet service faces an extremely steep slope, not technically a monopoly, but resembling one in many important aspects. This certainly begs the questions of lobbying power, vested interests, market manipulation and other murky waters. A more common question has been “will net neutrality make the Internet more like cable TV?” There are several points behind this question, but the main theory is that the FCC ruling will allow ISPs to offer channels and tiers of Internet service, in the same way that cable companies can charge for more channels and “higher-bandwidth” delivery such as HD service. It’s not a simplistic comparison; the ISPs that oppose net neutrality argue that they deserve the right to charge whatever they want because they paid for the infrastructure. That same argument persuaded the FCC to allow cable companies the semi-monopoly they still have, and certainly guided the form TV service has taken.

A Twist

The most direct and immediate impact on TV has an ironic twist: some of the biggest media corporations who were against upholding net neutrality are now using their opponents’ arguments to get the FCC to regulate TV retransmission prices. The American Television Alliance (ATVA) position is that broadcasters (NBC, CBS, ABC and FOX), are charging the cable and satellite providers too much, and threatening blackouts if their “demands” aren’t met. The ATVA wants the FCC to force the broadcasters to lower their rates. ATVA members include Time Warner, Charter, Cablevision, Bright House, basically everyone else who fought net neutrality, with the notable exception of Comcast. According to the ATVA, this will lower your price for TV service because your provider won’t have to pay as much to retransmit broadcast TV shows. So as it turns out, net neutrality may have a significant real-world impact on TV service, if anything comes of the ATVA’s petition and if the savings are indeed passed on to subscribers.

How will this affect TV?

It’s also no secret that TV and content providers have been working long and hard to fight Internet viewing. Most of the action has centered on asserting and redefining copyright law so that TV content can’t be legally streamed or downloaded. However, this changed a bit during the rise of major online video channels such as Netflix Inc., who managed to secure deals with many content owners. The success of Netflix Inc. encouraged other online streaming services as well as Internet TV solutions such as Roku® and Apple TV. Along with the general migration of viewing to mobile devices, this trend has turned talk of “cord cutting” from an isolated fringe phenomenon into an impending nightmare for traditional TV service providers. Metered Internet service has been a possibility for some time, but several major ISPs have recently begun testing “pay-per-byte” service in trial markets. The ISPs are admittedly most concerned with the high bandwidth usage of video streaming services. To put it another way, they only really got serious about metering after people started to watch TV online. The cable companies also waited until recently to roll out “TV Everywhere,” a service that gives you the ability to watch shows and channels on other devices, but only if you’re already a subscriber to one of the participating TV providers. The important distinction to look out for is exclusivity; if both TV Everywhere and Netflix get the rights to show “Game of Thrones” (for example), there’s no conflict. But if TV Everywhere gets exclusive rights, this is essentially another way to deny programming to everyone but cable subscribers. The potential is real enough to concern the Department of Justice.

Condemned to repeat history?

Chances are, we won’t see any drastic changes to TV service because of net neutrality rulings. not in the near future, especially; we’re still holding our virtual breath to see how the ISPs exercise their newly reassured power, and things like metered billing and preferred video services haven’t yet fractured the ‘net. We can expect the same TV providers to deliver pretty much the same channel lineups at the same prices. Well, they’ll probably keep rising little by little, but we can’t blame the net neutrality decision for that. The long term will be shaped far more by how the cable industry and content creators meet the challenge of Internet, TV and mobile, time-shifted, a la carte viewing. History isn’t encouraging; from VCRs to DVRs to streaming video, the entrenched TV industry hasn’t been known for gracefully embracing change and innovation. We can expect channel surfing to give way to more “discriminating” viewing habits as our choices become increasingly fragmented, possibly to the point where we’ll all be paying more for multiple services. But if history tells us anything, our money will still end up going to the same handful of companies.
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