May 08 2014
2141 Rayburn House Office Building
The Honorable Bob Goodlatte
Chairman Goodlatte: Since television was first invented, Americans have been large consumers of video content. While some Americans still rely on over-the-air antennas for watching video content from network channels, the majority of Americans today subscribe to satellite and cable services where they have access to the same network channels in addition to several hundred more channels of their choosing.
According to the FCC’s latest competition report, in addition to free over-the-air broadcast content, 100% of Americans have access to two satellite services, 98% have access to these two satellite services and one local alternative, and 35% have access to two satellite services and two local alternatives. Combined with the large number of channels carried by satellite and cable systems, these statistics reflect how the video marketplace has grown from the original three over-the-air channels from decades ago.
In recent years, a growing number of Americans have also subscribed to services such as Amazon, Hulu, and Redbox to either supplement or replace their satellite and cable subscriptions. It has also resulted in the creation of two new terms - cord-shavers and cord-cutters – that are used to describe those who reduce or eliminate traditional video subscriptions.
There are three compulsory video licenses in Title 17, one of which expires at the end of this year. Although these licenses are important by themselves, we cannot overlook the fact that a television with no signal is simply a collection of components with minimal interest to consumers. It is the content displayed on a television that is of interest to subscribers. This content is created by copyright owners who depend upon licensing revenue to fund the creation of programs that are of interest to Americans.
This Committee is always concerned about ensuring competition in the marketplace, both for the content and the networks that deliver it. Consumers and intermediaries benefit where there is robust competition. This Committee held a hearing just this morning on a major merger in the video marketplace.
Finally, I would note that several Members have market specific issues in which their constituents are unable to watch local channels due to what could be best described as line drawing exercises over designated market areas gone astray.
In my own Congressional district, my Page County constituents who are satellite subscribers watch Washington D.C. channels when there are local channels in nearby Harrisonburg readily available and which provide local news and emergency information better tailored to that region. In fact, the over-the-air antenna used to broadcast the Harrisonburg channels is actually located in Page County. Under the current law if satellite companies provide these local channels, royalties would be due to both Washington D.C. and Harrisonburg channels even if my constituents only want to subscribe to Harrisonburg channels.
I look forward to resolving these market specific issues going forward as we determine whether the current video compulsory license system is working for the digital era.