Video Competition Report Another Sign of Partisan Divide
The 17th Video Competition Report is seen as a further sign of the increasing partisan divide on the FCC eighth floor, industry officials and analysts told us in interviews Monday. Though some pay-TV industry officials see the document’s conclusions as an attempted defense of FCC video policies, to be cited in future litigation, others disparaged the Video Competition Report’s conclusions on the 2014 marketplace as being old news before they are even issued. “Nobody thought they were going to change the determination of whether the market place is effectively competitive,” MoffettNathanson analyst Craig Moffett said. It was released on delegated authority Friday.
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The item was released on delegated authority over the objections of Commissioners Mike O’Rielly and Ajit Pai (see 1605060068), an FCC official told us. The report’s lack of conclusions repeatedly was cited by an FCC spokesman when asked why the report was issued Friday on delegated authority for the first time, while the full commission always voted on previous reports. The report doesn’t contain policy decisions, just data, the spokesman told us. If the report isn’t substantive enough to merit an FCC vote, it wouldn't be unusual for the chairman’s office to suggest to the commissioners that the item be issued at the bureau level, a former FCC official told us. Pai and O’Rielly were notified 48 hours in advance that the item would be issued on delegated authority, FCC officials told us. Previous Video Competition Reports have largely not been controversial votes, an FCC official told us.
Industry officials disagree over the report's content. The decline in the number of cable subscribers and other trends in the report aren't new information, Moffett said. “This seems to be a dog bites man story,” Guggenheim Partners Analyst Paul Gallant said. The trends in the report, such as the growing power of online video and the importance of content, aren’t surprising, he said.
Pay-TV industry officials see the report as containing information curated to add support to FCC policies in the set-top box proceeding and recent mergers such as Charter/Time Warner Cable/Bright House Networks. The report is intended as a “litigation document” to be used as evidence for FCC policies when they’re challenged in court, a cable attorney told us. The item was kept out of the hands of the Republican commissioners to avoid having to battle them over changes that would muddy the record, the attorney said. The item spins the level of competition in the worst possible light for the industry, the attorney said. The report downplays the number of companies that make their service available on Roku, the attorney pointed out as an example. Though it lists TWC and Comcast, it doesn’t include Charter, the attorney said.
Other industry officials downplayed the report's content and the delegated authority release. Wireless competition reports underwent the same shift, Public Knowledge Senior Staff Attorney John Bergmayer said. “They’re just making it consistent with the wireless report,” Bergmayer said. With the information so unsurprising, it’s not hard to argue that the report might not merit a full commission vote, Moffett said.