During an interview at the 2014, Consumer Electronics Show, Federal Communications Commission Chairman Tom Wheeler (News - Alert) was asked about AT&T’s new “Sponsored Data” plan, which would create the content equivalent of “toll free calling.”
Responding to a question about how the FCC (News - Alert) might respond, either to AT&T’s “Sponsored Data” service, or video subscription company Aereo, Wheeler said simply that the FCC would support both innovation and competition.
“We’re pro innovation, pro competition, and we want to protect both," Federal Communications Commission Chairman Tom Wheeler said.
Wheeler’s answer was a classic example of a deft answer by an “inside the beltway” political operative who is highly skilled.
Though it always makes good sense to pay attention to official statements and the nuances of such statements, Wheeler’s response actually doesn’t tell any observer much about the precise conditions that might trigger a Commission response.
Aereo and other services do pose new questions about “retransmission consent,” the policy where cable TV and other firms that carry over the air TV signals have to gain approval from the content owners to do so.
The new issue is that the way Aereo provides a single subscriber with access to over the air content is the same way that consumer can lawfully do so at home: putting up an antenna and capturing the signal.
There are, of course, some new elements, including the lawfulness of moving content around between devices, or employing a proxy antenna farm.
But some would say fewer issues are posed by sponsorship of content consumption. That is the model that underpins over the air broadcasting. Under AT&T’s (News - Alert) new Sponsored Data plan, application or content providers would be able to pay for data consumption on behalf of their users, much as retailers pay for long distance charges when customers, prospects or partners call a home office.
Such underwriting of consumption is precisely what underpins the broadcast TV business. The same policy is used by Amazon to deliver content to Kindle owners. When a Kindle owner buys a piece of content, it is delivered without charge, over the air, to the device. Amazon pays for the transmission charges.
image via shutterstock
Some argue that sponsorship of data consumption in this way is anti-competitive on its face, because it favors larger firms able to afford to underwrite consumer consumption. But that is true in business in general, and in the content consumption business specifically.
Content delivery network services routinely are used by application and content companies to improve the quality of experience for apps and content. Toll-free calling can be purchased by any business that wishes to use the service.
One might argue that no content delivery network, and no mobile service provider, is unmindful enough to sell services in ways that leave them exposed to charges of unfair or anti-competitive behavior when selling either content delivery or consumption services to business partners.
But what else would you expect a highly-skilled FCC chairman to say about innovation and competition?