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Words From Charlie - Foreword to the 2013 Conference on Communications Policy Report

There is a fundamental shift underway in how video is being viewed. While cable and broadcast television continue to be the dominant modes of transmission, “over the top” delivery of content via the Internet provides new ways to distribute personalized and targeted programming directly to the viewer. This, and the proliferation of mobile devices and tablets can deliver video to the viewer anywhere, anytime. As a result, the advertising-based broadcast business model is undergoing significant challenge and change.

Meanwhile, the policy regime regulating video is also lagging behind. Conceived in 1934 as radio dominated the airwaves, the Communications Act has added television, cable and satellite in essentially separate regulatory chapters. And the Internet is barely even mentioned in the Act itself. Thus, much of today’s video transmission is controlled by regulations that originated long before the technology was around.

With this backdrop, the participants of the 28th Annual Aspen Institute Conference on Communications Policy gathered in Aspen, Colorado, from August 11–14, 2013, to look to the future of video regulation. Organized by the Aspen Institute Communications and Society Program, 33 leading communications policy scholars, experts, executives and citizen advocates investigated new realities and new regulatory possibilities in this time of expeditious change.

Rapporteur John Horrigan was on hand to document the spirited dialogue and deliver the group’s findings. The resulting report, Video Veritas: Building a 21st Century Video Platform for a High-Performance Society, looks at the changing landscape of video regulation and offers recommendations for policy that can accommodate the new video market.

Horrigan begins the report with a look at the current trends and consumer viewing habits for video in America. Television’s revenue as a percentage of GDP has increased over the years due to an ever-increasing selection of available TV channels. And viewers are watching more television per week than ever before. “Over the top” (OTT) viewing of television on the Internet is also gaining a lot of momentum, particularly among younger demographics. While its popularity has not yet cut into traditional TV-watching numbers (and in fact can enhance those numbers by time-shifting the watching of those programs), OTT is becoming more and more commonplace, with 78 percent of online American adults having streamed or downloaded online video in 2013.

More and more people’s attention is migrating from traditional media to smartphones and tablets that can connect to the Internet. Even though viewers have more choices on where to watch their content, most of the advertising dollars are still being spent on traditional television.

While new online entrants to the video market provide a disruption for traditional video models, they still face great challenges. The ability to purchase appealing content (such as the rights to sports) and access to new platforms are both barriers to entry that will be difficult to overcome.

Horrigan next looks at how regulation has tried to adapt to changes in the video market over the years. The expansion of online connectivity has forced policymakers once again to reconsider what principles should guide video regulation.

In 2004, Federal Communications Commission Chairman Michael Powell set forth a concise list of five guiding principles that focus on consumer rights and protections in the digital age—a contrast from the lengthy “Blue Book” rules of the mid-20th century. While these principles have served informally as a basis for policy for almost ten years, they remain fragile, and as Horrigan states: “This fragility is the motivation for addressing emerging critical issues and developing a new policy road map.”

It is with these critical issues in mind that Horrigan next delves into four areas of policy challenges that the participants focused on:

  • Production of Content: Changing Costs Mean New Funding Sources Necessary for Public-Interest Goals
  • Devices: Possibility of Market Power Calls for Policy Monitoring
  • Consumers: The Need for Empowerment and Inclusion Amid Digital Abundance
  • Distribution: The Uncertain Prospects for Network Upgrade

Through these lenses, the dialogue came to the conclusion that the video marketplace is an integral part of an overarching social and economic system, and has a responsibility to contribute to a higher standard of living for all citizens. It must be a competitive and economically sustainable marketplace that also fulfills its important social goals. While there may not be an end-all-be-all solution to finding the perfect video-policy framework, Horrigan details the Conference participants’ recommendations for stakeholder action in the areas of funding, competition, consumer empowerment, government leverage and multi-stakeholder forums. Ideally, this is a start to moving in the right direction toward regulatory reform.

Acknowledgments

I would like to thank our attending sponsors of the 2013 Aspen Institute Communications and Society Program for making this and our other conferences possible: Google, Inc. and Microsoft Corporation, Senior Corporate Partners; AT&T Services, Inc., Cisco Systems, Inc. and Comcast Corporation, Corporate Partners; EMMIS Communications, Liberty Global, Inc., Motorola Mobility, New Street Research, Telefonica Internacional USA, Inc., Time Warner Cable, Tribune Company and Verizon Communications, Corporate Associates.

I also want to acknowledge and thank John Horrigan, our talented rapporteur, for his excellent synthesis of the discussions and debates that transpired during the Conference, as well as our participants, listed in the Appendix, for their contributions to these important issues. Finally, I want to thank Ian Smalley, Project Manager, and Rachel Pohl, Program Associate, for their help in producing the Conference and this report, along with the Communications and Society Program’s Assistant Director Patricia Kelly, who oversaw its editing and publication.

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