FCC Chief: Let’s Redefine Pay TV

Federal Communications Commission Chairman Tom Wheeler wants to open the pay-TV industry to technology companies. Wheeler [has] proposed expanding the definition of a pay-TV distributor to include companies that transmit TV programming via the Internet. The move should give tech companies access to some of the most popular channels in television.

The proposal was designed to inject more competition into an industry long dominated by a handful of cable and satellite TV giants.

"Consumers have long complained about how their cable service forces them to buy channels they never watch," Wheeler said in a blog post announcing his plan to modify the FCC's definition of a multi-channel video provider. "The move of video onto the Internet can do something about that frustration -- but first Internet video services need access to the programs."

Under the proposed rule change, which must be approved by the full commission, companies that seek to distribute packages of TV channels over the Internet would be included in an expanded definition of a "multi-channel video programming distributor." That would level the playing field, making Internet companies equal to satellite television, cable and programming provided via telephone companies.

Wheeler said his goal was to modernize FCC rules that were adopted in the early 1990s -- long before the Internet was a viable distribution outlet. The FCC's rules were adopted to carry out Congress' desire to prevent cable companies from using their clout to freeze out what was then a new technology: satellite TV.

However, some analysts were skeptical that Wheeler's move would translate into lower-cost pay-TV subscriptions.

"Symbolically, it is important that the FCC is recognizing that the world has changed and that these new providers should be able to operate on an equal footing with legacy distributors," said Jim Nail, a principal analyst with Forrester Research. "But the practical effect might not...

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