WASHINGTON, D.C.— Because consumers are paying ever-increasing television bills with little control over the channels and programming they purchase, Chairman John D. (Jay) Rockefeller IV introduced groundbreaking legislation to promote a consumer-centric video marketplace titled, the Consumer Choice in Online Video Act (S.1680). 

As consumers’ appetite for online choice and flexibility grows, innovative companies are emerging to tap into that demand. But evidence is growing that some traditional media and broadband companies are attempting to discourage the growth of online video platforms through various anticompetitive practices.

“My legislation aims to enable the ultimate a la carte – to give consumers the ability to watch the programming they want to watch, when they want to watch it, how they want to watch it, and pay only for what they actually watch,” said Rockefeller. “Consumers must be able to benefit from online video’s promise of decreased costs, increased choice, and higher-quality video content. And I strongly believe that my legislation will help foster a consumer-centric revolution in the video marketplace.”

Rockefeller’s bill would give online video companies baseline protections so they can more effectively compete in order to bring lower prices and more choice to consumers eager for new video options. In particular, it would prevent the anticompetitive practices that hamper the growth of online video distributors. And it empowers consumers by giving them more accurate information about their Internet bills.

Background:

Two decades ago, Congress passed the Cable Television and Consumer Protection Act of 1992, in part to stop cable companies from leveraging their market power to block competition from satellite television providers.  Congress did so with the realization that market forces alone did not act to create true competition in video services, mainly because the entrenched interests held dominant control over the content necessary for new services to compete effectively. As a result, regulation in the name of competition was necessary to empower consumers and facilitate the development of new innovative video services.

Rockefeller’s bill, the Consumer Choice in Online Video Act, builds upon the legacy – and the promise – of the 1992 Cable Act. It will give online video distributors the protections needed to thrive, just as Congress did to protect the growth of satellite television services two decades ago.

Reports suggest that anti-competitive activity on the part of some entrenched incumbent media companies and broadband providers have limited the ability of online video distributors to enter the market and respond to consumer demand for innovative services.

Rockefeller has watched as the Internet has revolutionized many aspects of American life, from the economy, to health care, to education. It has proven to be a disruptive and transformative technology, and it has forever changed the way Americans live their lives. Consumers now use the Internet, for example, to purchase airline tickets, to reserve rental cars and hotel rooms, to do their holiday shopping. The Internet gives consumers the ability to identify prices and choices and offers an endless supply of competitive offerings that strive to meet individual consumer’s needs.

But that type of choice – with full transparency and real competition – has not been fully realized in today’s video marketplace. Rockefeller’s bill addresses this problem by promoting that transparency and choice. It addresses the core policy question of how to nurture new technologies and services, and make sure incumbents cannot simply perpetuate the status quo of ever-increasing bills and limited choice through exercise of their market power.

Rockefeller began the conversation about online video at an April 24, 2013 hearing. At that time, the committee heard that given the right support, online video could bring lower prices and more choice to consumers. Since then, Rockefeller has embarked on finding the best ways to protect and promote a video marketplace that benefits consumers.

Rockefeller’s bill would promote online video distribution by:

• Barring cable, satellite, broadcast, and large media companies from engaging in anti-competitive practices against online video distributors. It gives all online video distributors fundamental competitive protections in the video marketplace similar to what satellite providers were given in the Cable Competition and Consumer Protection Act of 1992.

• Providing online video distributors with reasonable access to video programming and facilitating their ability to offer more consumer choice in programming and services. It puts reasonable limits on the use of contractual provisions in video programming carriage contracts that harm the growth of online video competition.  It also explores ways for online video distributors to negotiate to carry broadcast television content and facilitate greater consumer choice in programming.

• Limiting the ability of broadband providers to degrade competitive online video services, which maintains online video providers’ pipeline to consumers. This would protect online video distributors against anticompetitive practices by Internet service providers who are affiliated with traditional cable or satellite television providers.

• Empowering consumers with new truth-in-billing protections for broadband Internet service. Consumers would be provided with clear and understandable terms and conditions for their Internet service so they can make informed decisions about which package and speed best fits their needs. It also directs the Federal Communications Commission to monitor broadband billing practices to make sure they are not used anti-competitively.

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