FCC Could Give Sleepless Nights To Amazon.com, Inc. (AMZN), Apple And Microsoft
The Federal Communications Commission (FCC) is considering regulating a subset of the online video streaming market. However, streaming video providers, such as Amazon.com, Inc. (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL), aren’t comfortable with that move. Equally unhappy with the proposal to regulate the pre-scheduled video streaming market is Microsoft Corporation (NASDAQ:MSFT).
FCC wants to regulate a portion of the online video streaming market the same way it regulates cable and satellite TV providers. According to the FCC, the proposed regulation of the video streaming market is intended to strengthen players so that they can better compete with cable and satellite TV companies. For example, the FCC says that the regulation of the video streaming industry will enable providers to easily get their hands on valuable programs from cable and satellite providers.
While having easy access to valuable TV programs may sound great, Amazon.com, Inc. (NASDAQ:AMZN) and its streaming peers are reading too much in the proposed regulations.
Laying ground for stiffer regulations
For the likes of Amazon.com, Inc. (NASDAQ:AMZN), Apple and Microsoft, what the FCC is proposing could just be the beginning of major industry disruptions. While the current regulation proposal does not capture on-demand streaming, more and perhaps tougher regulations could be on the way.
Regulations bad for innovation
Amazon and its peers believe that the proposed regulations of pre-scheduled video streaming would hinder future experimentation, thus slowing down innovation in the online video space.
The fact that the FCC is targeting pre-scheduled programs means that streaming services like Hulu, YouTube and Netflix, Inc. (NASDAQ:NFLX) won’t be impacted by the proposed regulations.
Cable networks reject proposal
Interestingly, most television networks aren’t supporting the proposal to regulate a subset of the video streaming market. These TV networks favor making private deals with video streaming providers outside of the watchful eye of the FCC. As such, they believe that such regulations would hurt their bottom-line.
However, consumer advocacy groups are in support of the regulations, believing that it would foster competition and thus add value to the streaming market.
It will be interesting to see how Amazon.com, Inc. (NASDAQ:AMZN) and online streaming peers will fight for their interest.
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