Senate bill would protect Netflix

by Brendan Sasso - 11/12/13 2:44 PM ET

Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Commerce Committee, introduced legislation on Tuesday aimed at boosting online video services like Netflix, Hulu and iTunes.

His bill, the Consumer Choice in Online Video Act, would provide certain legal protections to online video sites and would bar cable, broadcast and media companies from engaging in anti-competitive practices.

A small but growing number of consumers are dropping cable TV subscriptions in favor of online options, but there is fear that the established video companies could use their market power to kill off the online competition.

{mosads}Cable companies, for example, offer video programming and also provide broadband Internet service. In an effort to protect their own cable TV businesses, they could decide to slow down their customers’ access to online video sites.

Media companies could also limit the ability of the online video services to buy access to movies and TV shows for their libraries.

“Consumers must be able to benefit from online video’s promise of decreased costs, increased choice, and higher-quality video content,” Rockefeller said in a statement. “And I strongly believe that my legislation will help foster a consumer-centric revolution in the video marketplace.”

The bill would provide similar competitive protections to online video sites that Congress granted satellite TV companies with the Cable Act of 1992.

It would limit the ability of companies to use contractual agreements to block websites from buying access to video content and would limit the ability of broadband providers to degrade access to online video sites.

The Federal Communications Commission’s net neutrality regulations already prohibit Internet providers from discriminating between websites, but the rules are currently in jeopardy because of a legal challenge from Verizon.

Rockefeller’s bill would require broadband companies to disclose more information about data caps and other business practices to their customers in their monthly bills.

It would also bar TV companies from pulling their online content during programming disputes, like CBS did to Time Warner Cable subscribers earlier this year.

John Bergmayer, an attorney for consumer advocacy group Public Knowledge, emphasized that the bill is not just about protecting services that exist today.

“This is all about opening new opportunities for companies to offer new services,” he told The Hill.

In a statement, the National Cable and Telecommunications Association noted that Netflix has 30 million U.S. subscribers — more than any single cable TV provider.

“In a world marked by such dynamism and robust competition, prudent policy dictates the removal of regulatory obstacles for all instead of creating marketplace disparities that would ‘cherry pick’ rights and obligations for some,” the cable lobbying group said.

“We deeply respect Chairman Rockefeller and look forward to working with him and all members of the Committee towards our mutual goal of ensuring that the video marketplace continues to thrive.”

The National Association of Broadcasters took issue with a provision of the bill that would clarify that online video service Aereo and similar sites are legal.

The broadcasters are petitioning the Supreme Court to shut down Aereo, which transmits their stations over the Internet without their permission.

“NAB supports efforts to encourage the legal distribution of our highly-valued broadcast programming to on-line platforms, and we look forward to working with Chairman Rockefeller,” Gordon Smith, the broadcasting group’s president, said. “We remain concerned about proposals that may legitimize theft of copyrighted programming.”

—Updated at 4:38 p.m.

Tags Jay Rockefeller Netflix Senate Commerce Committee