In his new capacity as a lobbyist for the Motion Picture Association of America, former Sen. Chris Dodd could find himself lobbying against the net neutrality regulations he once supported. Edward Jay Epstein, writing in Adweek, suggests that the MPAA is gearing up for a fight with the FCC, and that Dodd could be a deciding factor:
Among other things, the MPAA has sidled into the battle raging at the FCC over regulation of the Internet regarding so-called net neutrality, which would guarantee anyone could send anything at no cost over the Internet. Proponents argue that free, untampered with transmission is vital to democracy (and their businesses). They have the support of FCC Chairman Julius Genachowski, a former IAC executive.
On the other side are the telecom and cable companies that argue it’s their right to manage traffic that goes through their pipelines as efficiently as possible. Just as cities should be able to manage vehicle traffic by discriminating against trucks on certain streets, they say they should be allowed to segregate traffic along their routes, even if it results in slower, and possibly more expensive, video streaming. Here the interests of the telecoms, the cable networks, and studios converge.
The challenge for Dodd is to use the considerable skills and connections at his disposal to quietly bring about such an alliance.
If Dodd eventually takes to lobbying against net neutrality for the MPAA (he can’t officially lobby Congress until 2013), he’ll have a hard time reconciling that with his sponsorship of one of the earliest net neutrality bills in the Senate, which forbade “charg[ing] for prioritization.” That said, it’s hard to imagine the MPAA hiring Dodd for anything else. Studios make a lot of money from licensing films and TV shows (more than they do from a movie’s initial release), and net neutrality–specifically the principle that ISPs cannot “charge for prioritization,” or deliver higher quality streaming video for a fee–could knock the studios on their ass:
Whereas the old-line cable and satellite companies have enormous building, servicing and amortizing costs, the Internet is essentially free to transmit over. Even if the new age streamers paid the same to license, buy, or produce content, they have a comparative advantage. “I don’t see how cable can compete with free transmissions,” a savvy top executive of Time Warner told me, pointing out that Netflix, after sublicensing Starz’s content, offers it for a fraction of what Starz charges its subscribers. No doubt Starz will end this bargain rate when its Netflix contract ends in October 2011, but so long as transmission remains free, streaming will chip away at the cable audience. “Cord cutting” will leave the cable systems with diminished revenue but the same overhead. “If 5 percent cut their cord, it would be a financial disaster for cable networks,” said a pay-TV executive. The result: cable nets would cut back on the amount they pay for content (which has happened in the case of pay-TV channels).
The MPAA has been opposed to net neutrality since the group learned NN would prevent them from going after piracy sites. In January 2010, the group pushed for a loophole in the FCC’s net neutrality plans that would allow them
to pressure ISPs to block, interfere with, or otherwise discriminate against your perfectly lawful activities in the course of implementing online copyright enforcement measures.
Of course, the MPAA and RIAA couch this in language intended to sound inoffensive. The RIAA says “the perfect should not be the enemy of the good” and “justice often takes too long.” The MPAA chimes in that “it is essential that government policies explicitly permit—and encourage—ISPs to work with content creators to utilize the best available tools and technologies to combat online content theft.”
But if the MPAA can’t force ISPs to discriminate (block or throttle) traffic to and from illegal downloading sites, and if ISPs can’t charge Netflix more for eating up bandwith, or allow MPAA members to pay more than Netflix to offer better streaming video than Netflix, then the MPAA cannot make money in the 21st century like it did in the 20th. And while it’s fair to say that the MPAA and RIAA should come up with new business models, it is not fair to ask them to, in the meantime, give away their content for free.)
Enter Dodd, who knows his way around the chamber and doesn’t have to worry about pleasing the netroots anymore.