The Impact of Convergence on the Legal Framework for Video Distribution

Abstract

The purpose of this paper is to determine the factors that will need to be taken into account when changing the regulatory framework for video distribution. This will be necessary due to the impact that the Internet is having on the business models of the sector. As the United States moves towards an entirely digital high definition transmission of broadcast television, an increasing number of individuals are now watching television from their computers through services such as Netflix and SageTV. It is clear that video distribution regulation needs to be modified to accommodate new business models. Requirements such as must carry rules, non-duplication and syndication will need to be changed or even eliminated for some of the new participants which include, among others, telecommunication and Internet based companies. This change, however, is not easy to accomplish due to the many conflicting interests that govern the sector today and the important investments that they have made in current business models. The paper presents a future scenario for video distribution that is Internet centric. From this scenario we identified the video distribution laws and regulations that will need to be changed or eliminated to make some services possible. As with any other major change there will be parties that are negatively affected such as local content developers, who may no longer have the benefits of the must carry rules, while other parties will be happy with the change. This paper develops an analytical framework that will assist in understanding how governments can solve issues of transition given conflicting interests. The framework will be based on organizational change and new institutional economics literature. The empirical data comes from the analysis of news events to determine if the factors identified for the framework can be empirically verified in the actions taken by the private sector, governments, and civil society. The focus is on the must carry, non-duplication, and syndication regulations that currently govern the sector.