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Friday, June 16, 2006

Net Neutrality for Sports -- Forced unbundling by any other name
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Communications reform proposals winding their way through Congress all have something of a shotgun marriage feel to them. The pairing of franchise reform and 'net neutrality' has no purpose save for opportunism. The two issues have absolutely nothing to do with one another, and indeed work at cross-purposes to the extent franchise reform encourages competition and net neutrality stifles it at the broadband service level.
The most peculiar strange bedfellow provision lies in Senator Stevens's reform bill. The bill takes a proper wait-and-see attitude toward net neutrality, yet suffers from no such humility in dealing with local sports programming. Section 400, euphemistically titled "Sports Freedom," outlaws exclusive contracts between video providers and sports teams or leagues. The effect, then, is to unbundle local sports programming and make it available to all-comers. (Interestingly, a broader version of this rule would prohibit the Direct TV NFL Sunday Ticket, but the bill dare not go that far.) In other words, as with all programming rules, the bill dictates what private arrangements are permissible based on the unproven assertion that competition is impossible absent this unbundling.

This may indeed be true -- sports could be the "essential facility" for video competition. But the point is not proven to warrant Congress ordering a prophylactic rule. The insouciant way Congress treats private property and contracts in the communications sphere is disturbing, and encourages the tremendous rentseeking that goes on in this sector. This provision appears to be nothing but that -- net neutrality for sports.
Perhaps we should all agree to a competition policy standard and stand down with opportunistic calls for unbundling? Naah. If hypocrisy is the homage vice pays to virtue, then virute appreciates the neverending tributes from the communications sphere.

posted by Ray Gifford @ 1:36 AM | A La Carte , Broadband , Cable , Net Neutrality

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