How can the FCC imagine it is pro-competitive to help Google expand its search monopoly by illegally forcing the search neutrality principle that Google opposes as never justified, on competitive pay-TV providers, in order to divert pay-TV viewer traffic to piracy-friendly Google-YouTube’s 1.6 billion viewers?
The FCC’s fact sheetfor its proposed final Set-Top Box rules due for a vote September 29th makes its “integrated search” neutrality mandate very clear: “No discrimination in search: Pay TV providers may not require a platform or device to promote the pay-TV app over other sources of programming in the search function.” “…Consumers will be able to search their programming options in one place whether from their pay-TV provider, an over-the-top service, or a programmer’s standalone app.” [Bold added.]
It is important to remember that the genesis, impetus, and design of this particular FCC rulemaking came at Google’s behest and pressure.
It is also important to remember Google’s U.S. search share in the U.S. has jumped from 64% in 2012, to 85% today, largely because Google Android became the world’s dominant mobile OS, by practicing discrimination in search, by contractually forcing manufacturers and mobile operators to install Google search as the default search app on all Android devices, and to preference placement of Google’s other search-dependent apps like YouTube, high on Android smartphone home screens.
Apparently the FCC has either forgotten or is ignoring the fact that the FCC itself ruled that the pay-TV/cable service/MVPD market was effectively competitive in June 2015 based on competition from DirecTV, Dish and Telco-cable.
This is a critical point because the FCC is now effectively claiming that because they narrowly view the pay-TV set-top-box market as not competitive (by ignoring the obvious fact that over 200 million Americans watch OTT video content on smartphones and tablets), the FCC must now also treat the effectively competitive pay-TV/cable service/MVPD market like a Title II-like utility-monopoly that must be virtually broken up and unbundled via a new opaque FCC app/search/copyright-regulation regime.
The FCC knows that neither their asserted broadband Title II utility authority, nor its Section 629 set-top box authority, give the FCC the authority to statutorily compel a Title VI cable service/MVPD, to effectively unbundle a virtual app facility, to divert viewers to piracy-friendly Google-YouTube and other edge OTT video providers.
In addition to the FCC’s apparent perverse approach of requiring competitive companies without search engines to create a de facto new search neutral video index for the benefit of an 85% share U.S. search monopoly that has long opposed the need for search neutrality, Google also has commandeered the FCC to be its government agent to force pay-TV providers to effectively put Google-YouTube on the home screen of all Android smartphone and tablets to further strengthen its search monopoly.
Adding to this injury, the FCC’s reclassification of broadband as a Title II utility triggered the statutory FTC exemption for common carriers from the FTC’s core Section 5 consumer protection authority.
That means that according to the Ninth Circuit’s recent FTC-FCC decision on the FTC common carrier exemption, the FCC’s reclassification perversely may undermine the FTC’s current investigation of Android tying allegations that enabled Google to extend its desktop search dominance to mobile search dominance, because Google Fiber may make Google statutorily exempt from FTC consumer protection and unfair competition oversight.
Adding insult to injury, Google also has pressured the FCC into assisting its war on copyright by getting the FCC to force a third mandate on pay-TV and programming providers — a compulsory copyright license that is not authorized in law, and which has one not-subtle purpose, which is to empower the FCC to effectively rewrite copyright licensing for the commercial benefit of Google and other edge OTT providers, if it deems OTT providers are somehow impeded by the new app sometime in the future.
Note the $20b set top box “tail is wagging the” $200b video programming “dog.”
Just when you think it can’t get any worse — it gets worse.
When the FCC does back-flips, twists, and somersaults with the law to please Google, Google drags the FCC into de facto regulating edge apps, a proverbial line-in-the-sand that the FCC has publicly said repeatedly that it will not cross on principle.
Soon we will see if the line the FCC has drawn here is a straight fair line or a politically-gerrymandered, squiggly-line to achieve a pre-determined outcome?
Internet apps are edge services, almost by definition. Has the FCC claimed that it wants to, or can, regulate any other app than these particular set top box apps?
When the FCC emphatically states it has no Title II authority to regulate “edge” information services, which obviously includes edge “apps” like set-top box apps, and Section 629 equipment/hardware authority provides no FCC authority over software apps, how can it legally justify becoming a supra-regulator of just pay-TV apps and no other app?
In short, this FCC rulemaking remains unlawful, unfair, unnecessary, unworkable and profoundly anti-copyright.
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.