AllVid proposal a step backward for competition in television


You often hear talk about a “Golden Age of Television” that’s under way, from The Sopranos and The Wire to Game of Thrones and Mr. Robot. And as someone who’s sat in front of the box since the days of Davy Crockett, it’s undeniable that there’s a supernova of video competition, including cable, satellite, fiber and Internet-streaming video.

From portal apps such as Roku, Apple TV or Sling to free and paid streams such as those created by YouTube, HBO, CBS and various professional sports leagues, the video consumer today is king.

But those basic facts about “television” — as undeniable as they seem — are being challenged at the FCC right now by a group of Big Tech companies that want to put all these competing sources of entertainment and information in one place where they can monitor and control them. It’s a proposal called “AllVid,” and unless the FCC finds the common sense and backbone to give it the quick burial it deserves, the future of television is going to change — and not for the better.

Companies such as Google, Tivo, Sony and others that support AllVid want the FCC to require every provider of pay TV — Verizon, AT&T, Comcast, Time Warner, Cox, Charter, Dish, DirecTV, every last one of them — to let these Allvid companies put a box on top of your TV that intercepts the shows and channels that you paid for and repackage them, allowing them to move channels around the dial, manage the flow of content and monitor and track your choices in order to sell more information about you to hungry advertisers, much as Google does already to your email and Internet searches.

And not only would they not pay one thin dime for this privilege, they also would be allowed to wrap their own advertising around the programs you watch. In fact, by shredding the arrangements under which distributors cut deals with content providers, and by forcing all cable boxes to interact with their technical standards, the Big Tech firms would be adding costs while they benefit at the viewers’ expense.

Their proposal sounds bizarre, but their rationale is even more otherworldly. AllVid proponents claim in their FCC filings that this proposal would increase competition and choice in the video marketplace.

How’s that again? Is there anybody who thinks that between traditional pay and broadcast TV, the new streams flooding over the Internet (whether free ones such as YouTube or paid ones such as Netflix), or devices such as Apple TV or Amazon Fire, that there’s not enough to watch? There’s a reason why today’s world is already called “TV Everywhere.”

In fact, the AllVid proponents are trying to manage competition, not defend or enhance it. They’re looking for a sweetheart deal that would let them scrape programming off of other systems that have cut distribution deals with studios and other content providers, and then repackage and resell them through AllVid.

When USA buys Mr. Robot, for example, it carefully negotiates the time it will be shown, the extent and nature of commercials and a plethora of other terms. And USA in turn negotiates with the big multichannel distributors for additional terms, like what other channels it will be near and whether it will be on a basic or premiere tier of service. But all those economically vital terms would be upended by AllVid, disrupting the revenue streams that fund production of these great new shows in the first place. This isn’t about “disruption” — it’s about asking for a free ride on something that others have worked hard to deliver to an enthusiastic audience of consumers.

One of the few ideas the political spectrum gathers around, particularly in a campaign season, is that regulation isn’t about helping the regulated. The left bemoans regulators who are held captive by the companies they’re there to regulate. The right assails “crony capitalism,” by which political influence is turned into economic gain for the favored few. Both sides, therefore, ought to take a cold and hard look at this attempt to poach the entire television system by asking the FCC to do something the market never would.

Ev Ehrlich is president of ESC Co., an economics consulting firm, and was undersecretary of commerce from 1993 to 1997.