One press report described the hearing as being about “a slew of new rules” in the new scenario where distributors own content. What kind of rules are we talking about?
Before vertical integration, content owners wanted their content to be on as many distribution systems as possible. The distributors had no real incentive to treat any particular content owner differently, although larger owners with more content might have more negotiating strength. Rules already exist against undue preference and to provide equitable access to the smaller content providers.
With vertical integration, the potential arises for an incentive to make some content available only on the distributors own system and also provides a greater incentive for preferential treatment of its own content. The rules, therefore, are about the extent to which distributors will be able to restrict access to their content to create a competitive advantage, and how they provide distribution for content owned by other distributors and independents.
Telus, a distributor that has chosen not to acquire content companies, made a very interesting point. They asked how restricting access for content would compete successfully against Internet video. While it may be too much to expect details from the consolidated companies to explain the details of their business model, this seems to be a very good question. It also reveals a different view on the part of one major distributor in comparison to the others, evidence of competition and different opinions and structures being brought to the market.