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Does the FCC Have the Authority to Rewrite Copyright Law and License Apps?

By / 9.13.2016

Does the Federal Communications Commission (FCC) have the authority to rewrite copyright law and license apps? This Thursday the Senate Commerce Committee will hold an oversight hearing for the FCC, giving the committee members the opportunity to ask FCC Chairman Tom Wheeler this very relevant question.

Wheeler has proposed a plan by which payTV operators will be required to offer their shows through an app, which can be used on any device. The goal of this plan is to wean consumers off set-top boxes and home television sets, and encourage them to watch their favorite shows on their phones or tablets.

In the process, however, Wheeler is also mandating that the copyright holders for movies and television shows can no longer control where their material appears. That dramatically changes established copyright law, which gives copyright holders effectively unlimited discretion over how and where to sell and distribute their content.

Moreover, the FCC would set up a licensing board to certify the apps, setting an unfortunate precedent where any app that provided video content could presumably come under government control about how and where it could provide that content (or else it would be easy to circumvent the FCC’s rules). In effect, the FCC is setting itself up as the gatekeeper of the App Economy, which has been a tremendous job producer so far for the United States.

As we discussed in our 2015 paper, “Copyright in the Digital Age: Key Economic Issues,” significant changes in copyright law should be evaluated by three metrics:

  • Do they promote the creation of new artistic works?
  • Do they allow creators and authors to benefit from their artistic endeavors?
  • Do they stimulate jobs and economic growth?

There is no evidence that the FCC did any economic analysis of these copyright metrics to justify its proposal. Moreover, app licensing by the government could dramatically slow down the rate of innovation in apps

PPI is in favor of competition in the set-top box market, including the delivery of content through apps. But the FCC’s attempt to squeeze out set-top boxes by rewriting copyright rules and licensing apps has the potential to have wide-reaching negative economic consequences.