The FCC’s Latest Attempt to Promulgate More Regulation in the Multichannel Video Distribution Market Will Ultimately Hinder Innovation, Increase Prices, and Be Detrimental to Consumer Welfare

04 May 2016
By Dr. Christian M. Dippon

In a report prepared for CALinnovates, an advocate for California’s consumers of technology and innovation, Co-Chair of NERA’s Communications, Media, and Internet Practice Dr. Christian M. Dippon comments on the Federal Communications Commission’s (FCC’s) proposal regarding consumers’ video navigation device choices as they apply to multichannel video programming distributors (MVPDs). In particular, the report focuses on how the FCC’s proposal would impact innovation and consumer welfare.

In short, the author concludes that the FCC’s proposal will not attain its stated goals; it will hinder innovation not encourage it, prices will not be reduced but most likely will go up, and the impact on consumer welfare will be detrimental not beneficial. Dr. Dippon advises that the FCC should refrain from implementing any additional rules under Section 629 (47 USC 629) and rely on the market forces that are widely present in the markets for STBs and MVPDs as these markets are competitive. At a minimum, the FCC should reexamine the premises on which the NPRM is based and conduct a more detailed and fact-driven review of the costs and benefits of the proposal before proceeding with its proposed rulemaking.