To regulate interactive TV or not: now it’s Washington’s turn to decide

Canadians hankering for a little déjà vu need look no further than Washington these days. The Federal Communications Commission’s current review of interactive TV plays like a re-run of the CRTC’s landmark 1998 hearing into whether or not to regulate new media (CNM, May 20, 1999). Many of the arguments presented by the National Cable Television Association (NCTA) in its March 19 brief to the FCC were made three years ago by many on this side of the border. Below is an edited excerpt from the NCTA’s executive summary. This is a peculiar – and misguided – proceeding. The FCC is asking for comments describing and defining in advance a service – "interactive television" – that for the most part does not yet exist. And at the very same time, it is asking whether and how it should regulate this embryonic and hypothetically defined service. Such a premature urge to regulate emerging services is unprecedented. Unfortunately, while efforts to define and propose a regulatory scheme for interactive tele-vision at this time are inherently speculative and hypothetical, the effects that such FCC activity will have on investment, innovation and the services available to consumers are real and predictable. Merely by sending a signal that nascent technologies and services are in its sights as possible candidates for regulation, the Notice has lowered a dragnet over this emerging, but struggling, new industry. No one can quibble with the Notice’s proposition that in order to "assess the possibilities for discriminatory behavior . . . it is important to understand clearly how ITV providers will deliver their services to consumers, including what type of contractual arrangements will govern this delivery." But such a clear understanding is impossible at this early stage of ITV development. Indeed, it seems wholly artificial and pointless at this stage to try to classify and categorize all these vastly different services, models and business plans under the rubric of "interactive television." It is especially pointless and inappropriate, and counterproductive to industry development, to try to formulate an appropriate set of regulations for each category to prevent conjectured anti-competitive conduct. Some ITV services described by the FCC are expected to be delivered by program networks carried by a cable system, along with a particular network’s video programming stream. In some cases, the described services would be directly related to the accompanying video programming. In other cases, they would be unrelated to that programming. Some services described by the Notice use cable systems not only to deliver information to cable subscribers but also to obtain information back from subscribers. Other services download information to the cable system or to subscribers’ television sets or set-top boxes but require no upstream transmission of information back to the service provider. These services have a single common trait – that television viewers can electronically interact with and manipulate material that is provided to them over their television sets. But it is wrong to assume that they all provide cable operators with similar incentives, opportunities and means to discriminate against unaffiliated providers of such services. At this stage of the game, there is no reason to expect that cable facilities will be the dominant means of providing the array of interactive services envisioned by the FCC… Tele-phone lines and wireless facilities are being used today to provide the prototypes of such services... There is no evidence that cable is in the process of becoming an "essential facility" for the provision of interactive services. There is no reason to cloud the marketplace development of such services by developing regulations that presume such cable predominance. Threatening to regulate such services today, when they are either nascent, imagined or beyond the scope of anyone’s imagination, is likely to postpone or snuff out their emergence before they even reach the marketplace.

To regulate interactive TV or not: now it’s Washington’s turn to decide

Broadcast | March 29, 2001

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