Randy Cooke

[Commentary] A profound shift in the balance of power between content and distribution will be the necessary consequence of eliminating Title II’s governance of the internet. For better or worse, three sectors of the media landscape will be affected.

First, this is a boon to traditional cable operators who also serve as most people’s internet service providers, via coax, fiber or wireless spectrum—the incumbent multichannel video programming distributors (MVPDs). They are content gateways through which consumers’ access, cost and quality of content engagement will be determined by the content originator’s metered internet terms, payable to the ISP/MVPD. Such cost-neutralization of carriage for the traditional MVPD represents enormous advantages over virtual MVPDs, an industry effectively created by the FCC in 2014 when it reclassified the definition of MVPD to exclude any physical distribution infrastructure. While virtual MVPDs may offer content access rivaling the incumbent MVPDs, they too would be subject to the costs of a metered internet, again, payable to the ISPs. No doubt, this would be a margin-crusher that would favor the incumbent MVPDs in a content price war. The FCC has yet to comment on how exactly this promotes competition. Finally, there are the programmers whose very existence depends on bundled carriage revenues. Without the ability to offset the neutralization of carriage revenue with robust monetization of audience, the elimination of net neutrality may very well thin the herd of linear programmers. Who’s got time for bad TV anymore?

In the end, Ajit Pai’s vision for an open and free internet will likely result in outcomes marginally favorable to consumers. Content distribution is democratizing at an unbelievable rate, while audiences continue to balkanize across platforms and devices. So while consumers will soon be able to price shop providers in earnest, diversity in programming itself may be the first casualty of a new, open and free internet.

[Randy Cooke is vice president of programmatic TV at video ad inventory marketplace SpotXchange]