National Broadband Plan will drive media mayhem
The FCC set out ambitious plans creating Connecting America: The National Broadband Plan. The Commission side-stepped several issues -- which may have been intentional. The proposal makes several recommendations that, in the future, will have impact on America's digital world regarding broadcast media services.
Issues will unfold as the plan is read by all concerned, particularly CEO's of NBC, CBS, ABC, FOX, Paramount, Comcast - Universal. This will unfold as an explosive debate, will change how media evolves, and will influence directors, producers and financial investments in multi-media production. The broadcast / broadband media world will meet simultaneously, which already is creating significant friction for all: Intellectual property, and media broadcast rights. The very essence in how the carriage of media will unfold, which is being interpreted as license, copyright and innovation impediments is going to drastically change. The broadband plan is a catalyst and perhaps why the Commission did not hold a vote on the Broadband plan recommendations submitted by team lead by Blair Levin.
The old guard of media (broadcasters, news, entertainment, consumer demands) is grappling with change. They have tried several next generation ideas with respects to business models, media management and what they really are over the past 10 years. All have failed - so far.
Media is an ugly word. Put simply, it is not same for all; media means different things is to individuals, groups, industries, organizations and nations. The world is changing, as is the essence of what media is defined as. Commissioner Clyburn's comments March 16th:
The Commission recently undertook an inquiry into the future of journalism. This process hopefully will help us answer some essential questions that may shed light on contracting the broadcast spectrum. For example, what will the effect of moving this spectrum from broadcast to mobile use be on the delivery of news and information to local communities? I am very concerned about sacrificing an essential service to our communities in favor of new apps that have nothing to do with ensuring that we can have meaningful access to the news and information critical to our daily lives. It is unclear at this point whether the Internet can currently replace these trusted sources.
Competition is not what it used to be. It has a wide net, not only global in terms, but in demographics, quality and specialty. Consumer choice has lifted off the 200 channel artificial limitation to reach over a million different user choices. Media opportunities are spreading at epidemic proportions. There's no stopping it. If Internet media was to be regulated, it would be distrusted and offensive to many.
Consumer marketing
Nielsen television ratings made it easy for marketing machines of Fortune 500 service industry companies like Proctor & Gamble, Wal-Mart, Shell Oil, and Exxon to determine how to market their wares. It simply divided audience demographics into neat little boxes and determined how many marketing dollars could sponsor each product they sold. These old school models are long gone thanks to the Internet. Traditional media companies like big networks -- ABC, CBS (Parent company of ZDNet), FOX and NBC -- are facing not only upstart specialty channel networks but Internet-only produced and broadcast 'television' media programs. It has gone through all the traditional disasters from copying existing broadcast formats (didn't work, lawsuits and early technology offered poor quality) to new browser application capabilities offering high quality video content delivery solutions. Real competition to the big boys is now here. Marketing revenue is falling at rates which large broadcast companies can ill afford to lose. The revenue is not only in decline, in some cases it is permanently leaving traditional media options and moving to the Internet at lower cost. That reality is being ignored by many media executives.
Control is slipping away
Broadcast companies have fought back using a variety of methods including regulatory, judicial and intellectual property treaties. These methods have had limited success and likely will fail over the long term. In the interim they will continue to use such avenues until they can figure out how they are going to compete, merge or die. Executiveslarge production studios such as Paramount, Sony, 20 Century Fox, IMAX and others face stiff competition to their multi-million dollar productions. To be sure, they won't go away, movie goers love big screen entertainment. What will change is how they market post big screen distribution rights where the syndication and broadcast rights market values are. Look for direct-to-consumer resale rights over the internet to become the standard.
Media broadcast
Local TV will change - it has to or it will become a dinosaur. Social media has made significant impact on what consumers do in their spare time. No longer is it an automatic slam dunk that the six o'clock news is turned on 5 days a week. Local programming and production has been migrating to Internet. Many outlets are not updated to the latest applications available such as podcasts (audio and video) and real-time search enabled. Some argue that it needs to be supported in its traditional format for those consumers that have decided to opt out of the Internet age. Local / regional television will not disappear but it will change how it operates and delivers its content.
All segments will be affected. Television drama, documentaries, and even live sport coverage. Consider Commissioner McDowell's comments during the announcement of the National Broadband Plan;
We should be mindful that Blair and his team are presenting this plan to Congress during a tumultuous time. No, I'm not referring to the debate over healthcare legislation. I'm talking, of course, about March Madness. It should be obvious to policymakers everywhere that the NCAA basketball tournament and broadband enjoy a symbiotic relationship. To find definitive proof of unfettered innovation at the "edge" of networks, one needs to look no further than the statistics emanating from March Madness on Demand, or "MMOD" as it is know by those of us who are afflicted with March Madness. Last year, MMOD recorded 7.52 million unique visitors, which represented a 58 percent increase over 2008. Furthermore, online viewers consumed more than 8.6 million hours of video and audio in 2009. That is a 75 percent increase over 2008. If this trend continues, March Madness could be the Holy Grail of "killer apps" needed to accelerate broadband adoption to near ubiquity by 2020.
Internet media is ubiquitous. The internet world is changing faster than any government agency. MPAA / RIAA, ACTA, x, y and z are side shows. Internet users will simply find alternative solutions if they are impeded. As the I-generation moves to the forefront and becomes politically active, the old guard in media and government will have to change or be ignored. There's a youthful arrogance and revolt against existing institution and government regulation around the world. It is a user group awake and informed. And if annoyed sufficiently, it will effect change through means many didn't think possible 5 years ago. The National Broadband Plan is the first step in catching up to what other countries are already enabling. It skillfully avoided interjecting media broadcast regulation problems inside the National Broadband Plan. Commissioner Baker clearly recognized that if any regulations are to be applied, it must focus on broadband service access and not correlate to other FCC mandates;
As we proceed, we must take care to ensure that we treat existing licensees equitably. We should provide both existing and new license holders with as much latitude as possible to design and deploy state-of-the-art, efficient networks and develop service offerings to appeal to U.S. consumers. I would strongly oppose any efforts to dictate business plans or service offerings through regulatory mandate or inflexible allocations or service rules.
We should similarly be careful to avoid prescribing government-imposed answers to questions best left to the market as consumers and companies shift towards a broadband-enabled and digital world. Questions about the Future of Media and journalism are best left primarily to newspapers, websites, TV and radio stations and new entrepreneurs. Questions about how we will watch television tomorrow are best left primarily to consumer electronics manufacturers, device innovators, pay TV providers, content providers, and viewers. Government should not be in the business of mandating technologies or picking technology winners.
The FCC's work has just begun. Congressional reaction to the Plan has not been heard, partly because the Health Care Reform debate overshadowed it.
Chairman Julius Genachowski understands how reforming America's accesses Internet using broadband outweigh any one or many special interests groups will argue the pace of change threatens their existence;
I appreciate it for the tough decisions made on what to put in the plan, and not, and to focus discussion on serious and thoughtful initiatives to solve real problems, not stale debates or shadowboxing.
Workshops regarding the NBB are already underway at Broadband.gov
Additional resources:
FCC releases 'Connecting America: The National Broadband Plan'
FCC's National Broadband Plan: There is a dark side
CSPAN coverage of FCC Commissioner's of National Broadband Plan
Office of Science & Technology Policy - Overview: Connecting America
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