FCC Commissioner Pai: Cable Act 'is deterring progress'

Worries commission is sending 'wrong signal' to consumers
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FCC Commissioner Ajit Pai argued Thursday that the Commission should have the authority to relieve cable operators of some regulations contained in the 1992 Cable Act, noting that operators face increased competition from satellite TV, Netflix (Nasdaq: NFLX) and other online video providers.

Ajit Pai, FCC

Pai (Image source: FCC)

"A cable company recently told me that the legal team had to flyspeck every single idea for improving the business to make sure that it was even allowed. Innovation shouldn't be frustrated by worries about regulatory burdens. And it shouldn't be hindered by regulatory uncertainty. But I think that we have reached the point where the Cable Act as it stands is deterring progress, to the detriment of consumers," Pai said at a Media Institute luncheon in Washington, D.C.

The Republican FCC commissioner bemoaned a ruling last year in which the Commission ruled that Comcast (Nasdaq: CMCSA) was discriminating against Tennis Channel by distributing it in fewer homes than Golf Channel, Versus and other networks owned by Comcast. Pai noted that Tennis was being distributed in similar programming packages by other pay TV distributors. "Indeed, even Dish (Nasdaq: DISH) and DirecTV (Nasdaq: DTV), which have ownership interests in the Tennis Channel, distributed that network to fewer homes than both Golf Channel and Versus! So I didn't understand how it could be considered affiliation-based discrimination when Comcast did the same thing," Pai said, according to his prepared remarks.

In December, Pai warned that the FCC could attempt to regulate the pricing of usage-based broadband packages this year if its network neutrality rules are upheld by the U.S. Court of Appeals for the D.C. Circuit. Pai addressed the upcoming ruling on Verizon's (NYSE: VZ) attempts to overturn the FCC's network neutrality rules on Thursday.

"Whatever the court decides, I worry that we have sent precisely the wrong signal to the marketplace. At a time when consumers have more options than ever before for accessing video content, the FCC shouldn't go out of its way to micromanage MVPDs' programming decisions. At a time when we would like cable operators to devote more bandwidth to advanced services, we shouldn't force them to carry more channels in order to avoid carriage complaints," Pai said.

For more:
- see Pai's speech

2012 Year in Review: Usage-based broadband launched by Comcast, Time Warner Cable, Suddenlink

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