What You Mean, 'We,' Kimosabe?
November 3, 2015
For those of us old enough to remember when broadcast television and the neighborhood movie house were the only way see a movie, TV or short film, you might remember this then-popular joke.
The Lone Ranger and Tonto were surrounded by fierce hostile "Native Americans." The Lone Ranger looks to Tonto and says, "Tonto, looks like we're finished. What are we to do?" Tonto replies: "What you mean, 'We,' Kimosabe?"
And so it seems is the situation of broadcasters in the U.S.A. For decades, broadcasters have been relied upon by young and old as the primary go-to source of entertainment programming, and along with newspapers, for news and information.
Then, along came the Internet and "smart" phones and everything seems to have changed, almost overnight. Broadband was not a true reality for the average viewer or listener at the dawn of the 21st century, and now terms like OTT (over-the-top), mobile broadband and "small screen" viewing are in use every day.
BROADCASTERS ARE SURROUNDED AND HAVE TO JOIN THE ATTACK
Like the Lone Ranger, broadcasters too are surrounded by hostile forces. For them, it's the digital platform. With increasing speed, broadcasters are concluding that that they have to get on-board the streaming train. Broadcasters understand that they must adapt and offer their product over multiple platforms. However, there is a big difference with the Internet.
While traditional one-to-many broadcasting is provided over their own dedicated transmitter, tower and antenna, OTT is provided over the facilities of an Internet Service Provider, or ISP. That makes it complicated. Despite many attempts to make ISP service competitive, bandwidth is limited and most areas are served only by a single provider. John Oliver persuasively demonstrated that on his HBO show "Last Week Tonight."
Have you noticed that ISPs often and increasingly have an interest in competitive entertainment programming and news delivery services? So, it is vitally important to broadcasters that when they deliver their service across multiple platforms, including streaming on the Internet, that there be non-discriminatory access to consumers that does not unfairly discriminate against the delivery of their programs. That is the purpose of the Open Internet Order, also called Network Neutrality adopted earlier this year by the FCC, and that is why it deserves, even requires the support from U.S. broadcasters. Strangely, though, broadcasters have been slow to voice an opinion about the order and its policy.
KIMOSABE: WE'RE SURROUNDED
It does not take much for broadcasters to realize that streaming is critically important. While over-the-air broadcasting continues to show the largest audiences, studies show one-to-one streaming, in various forms, is taking increasing audience shares, particularly in the age groups most appealing to advertisers. Addressing the now defunct Aero business model, The New York Post opined that broadcasters are facing a classic game of "whack a mole" and clearly the networks themselves are increasing their own over-the-top presence, whether their affiliates come along for the ride or not. Two years ago, a Harris poll reported that over half of Americans have watched digitally streamed television programming, which is becoming dominant among 18-35-year-olds. Clear Channel has re-identified its brand as the iHeart radio streaming service.
The lesson is that multi-platform is not only the future, but is the here and now and local broadcasters must get on board. Traditional radio or television may not be going away, but studies report that millennials and even older generations want to use their streaming devices in conjunction with viewing and listening and a driving factor is social media.
Notably, over-the-top has morphed from wired broadband to wireless and carriers are experimenting with wireless LTE multicast, simultaneously streamcasting to large audiences at specific locations over their personal devices. So as broadcasters organize to provide their multiplatform services, including streaming over both wired and wireless broadband, to survive and serve their local public they must have equal and nondiscriminatory access to the facility. That is the purpose of the FCC's open Internet order.
THE OPEN INTERNETORDER
Given its importance to broadcasters, it is curious that the mass media industry has been so silent during this discussion. Let's review the order. Employing Title 2 of the Communications Act, the FCC classified Internet providers as common carriers, subjecting them to rules that would prohibit most content-based discrimination. The goal is to set sustainable rules to protect free expression and innovation on the Internet and promote investment in the nation's broadband networks. The rules apply to both fixed and mobile broadband and establish bright line rules to maintain an open Internet, and prevent practices that could prejudice broadcaster streaming opportunities. They are:
- No Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.
- No Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services or non-harmful devices.
- No Paid Prioritization: broadband providers may not favor some traffic, including that of their own affiliates, for consideration -- in other words, no "fast lanes."
The order would allow an Internet service provider to adjust broadband speeds and conditions in reasonable ways for its network management where consideration is not involved and to achieve a legitimate network management purpose. Of paramount importance to radio is the ban on paid prioritization -- favoring some traffic over other traffic, either in exchange for consideration or to benefit an affiliated entity.
The intended net result of these controls is to prevent the wealthiest competitors from paying for superior distribution or prioritization of their own content. The key concern for radio broadcasters is that as streaming content becomes an increasingly important platform for reaching listeners, each station feels greater pressure to develop multi-platform delivery alternatives to reach their audience. As this pressure builds it could be devastating were broadcasters inhibited through discrimination that disadvantaged them in delivery efficiency or cost.
The Internet service providers complain that the order will stall investment and innovation in Internet networks. However, we have seen no specifics, only generalized complaints. As this pressure builds, it could be devastating were broadcasters inhibited through discrimination that disadvantaged them in delivery efficiency or cost. This concern is becomes even more evident as we witness increased consolidation among Internet service providers and content generators and providers. We live in a world today where cable companies own Hollywood studios and programming networks and where mobile service providers own direct broadcast satellite systems.
COMMON CARRIER IS NOT SO BAD
While the open Internet order does subject Internet service providers to a common carrier regulatory regime, it also lightens the burden with significant regulatory exceptions for "reasonable network management," to find this a practice as "a practice that has a primarily technical network management justification but does not include other business practices."
Thus, the practice would have to be "tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service." While the order has been appealed, it has strong support among many legislators. House Communications Subcommittee ranking member Anna Eshoo recently stated her confidence that the net neutrality order is on sound legal ground. She and Senator Ed Markey filed an amicus brief in support of the order stating that it follows Congress' intent.
The principle of Net Neutrality remains a hot topic among our nation's telecommunications policy makers. So far, broadcasters have steered clear of this debate, but it is important that broadcasters watch it carefully and, if necessary, be prepared to register their position in order to protect the free flow of information and their pathway to the American consumer.
This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.