The danger the FCC can’t see in its new video proposal

[Commentary] Far from the snow-covered Beltway, fear that the market for media consumption devices and services has become dangerously concentrated is a real head-scratcher. Instead, outside the Federal Communications Commission’s limited view (and, for now, its regulatory powers), a flowering of Internet-based competitors to pay TV services have bloomed, including products from Apple, Google, Sling TV, Hulu, Netflix, YouTube, Roku, Amazon Fire, Sony, HBO, and many more that deliver content on a growing range of devices well beyond TVs.

None require a provider’s set-top box. If anything, pay TV providers are losing ground rather than strengthening their control over the video stream. Hamstrung by rising prices for content from mega-producers including Disney, CBS and Fox, as well as complicated FCC rules imposed on the pay TV providers that the innovators don’t have to follow, pay TV subscriptions have plummeted by the millions in the last few years as cord-cutting becomes both better and cheaper. It’s Moore’s Law, and not FCC law, that continues to drive content’s new Golden Age. But the FCC only sees the pay TV providers, the subset of the market it has long regulated with considerable effort and mixed results. It’s mistaking its clear view of the traditional market, in other words, for an easy path to redesign the emerging new industry, which is mutating rapidly outside its peripheral vision.

[Downes is a project director at the Georgetown Center for Business and Public Policy]