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Can TV Advertising Regulations Keep Up With the Change?

January 23rd, 2019   ||    by Oriana Schwindt

An old saw in the creative industries is that limitation spurs innovation. Innovations in storytelling often come as a result of—rather than despite—restrictions. Whether this holds true when applied to TV, and more specifically TV advertising regulations, is still up for debate.

A relevant case in the broader TV industry from a couple of years ago seems almost quaint, now. The FCC in 2016 proposed a new rule for set-top boxes that would require pay TV companies to allow customers to use set-top boxes that were not property of the company.

Proponents argued that this would save pay TV subscribers an average of $200 a year in set-top box rental fees, in addition to all the associated charges. There would be more competition, as well, from cheaper boxes with better features.

Opponents said that the industry was already moving away from the set-top box in favor of connected devices like Apple TV and Roku, and that non-pay TV company boxes like TiVo already existed. There was no need to regulate a segment of the industry that was already becoming obsolete thanks to self-generated innovation.

Those opposed won when the FCC leadership changed and, in 2017, tabled the proposed rule, according to Forbes.

Regarding TV advertising regulations, Silicon Valley is the canary in the coal mine. Online privacy concerns are rippling through the industry after Europe’s passage of the GDPR. The potential for hacking devices on the Internet of Things is high—and that includes Smart TVs. Innovations in addressable and targeted advertising rely on companies’ ability to send and receive data on a household, or even a device, level.

Vizio is in the process of settling a lawsuit over its Smart TVs’ data-gathering abilities, per The Verge. More in-home devices are sending data to and fro, causing consumers to question what, and who, is listening to their intimate conversations.

In the current political climate, though, regulations in general have fallen out of fashion. Huge mergers like that of AT&T/Time Warner and Disney/Fox have proceeded with minimal regulatory friction. FCC Chairman Ajit Pai, in particular, has a committed anti-regulatory stance, and the FCC as recently as late October had promised to take a weed-whacker to many regulations it deems outdated, as reported in Multichannel News.

The election results of November 6 may have handed control of the House to Democrats, but the FCC remains firmly in control of the TV industry’s destiny. And that means the industry is unlikely to face significant regulatory challenges in the next several years, regardless of whether such regulations would help or hinder innovation.

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