• by The Editor , September 5, 2008

Media magazine: Chairman Martin, regulations and policy obviously will influence the near- and long-term future of media. What's on your docket over the next X months in terms of policy-making, and what could really fundamentally shift the way we consume media?
Kevin Martin: [via speakerphone] What you're seeing is the Commission having a priority of continuing to put in place rules that allow for any of the platforms to deliver the next generation of broadband services. What I think is the most dramatic trend that you're going to see in terms of broadband services is the migration of true broadband connectivity overall to the wireless platform. You already have competition between the telephone companies in terms of their DSL platform, and then increasingly their fiber in the home platform in the Verizon regions, with their FIOS competing with the cable companies and their cable-modem services. But the real increasing connectivity is going to be in terms of the next generation of wireless broadband connection.
The Commission just completed an auction of the spectrum that we're going to take back as a result of the digital television transition. We auctioned it off to wireless companies for the delivery of wireless data and wireless broadband services. As they begin to build those networks out, starting in February of next year, broadband connectivity will really move in a much more dramatic way from a fixed connectivity to mobile wireless broadband connectivity.
I think that what you're going to continue to see is a continuing shift to the consumer and their ability to be in control of the content they want, which will have all kinds of economic consequences for the different media. We've seen that most dramatically in the music realm already, but I think it is going to migrate to these other forms of media and have similar kinds of impact. Music and newspapers have been the most impacted, but you're seeing the same kinds of trends, to some degree, in other media, and I think that is going to continue. The Internet is inherently something that just aggregates content, and many of the content companies have traditionally been the aggregators of content. I think that's going to continue to be challenged by the Internet distribution model, and if that model becomes more and more ubiquitous and enables people to be also creating and sharing content on their own, those traditional models are going to come under more and more stress.
John Huey: I agree with you that the Internet does not play to the hand of the aggregator. What we have found is that if you look at the portals and you look at the big aggregators, they're losing the interest of the advertiser, and of the people who are looking for specific content. What we believe plays into the hands of the mass-media companies is the belief that trusted branded content on the Internet works very well and builds large audiences. We've seen it at si.com. We've seen it at people.com. We've seen it at cnnmoney.com. We now have roughly 30 million unique visitors just out of what's thought of as a traditional magazine company. If mass-media companies successfully transform themselves into multiplatform media companies, the trusted branded content does have a role that is different from that of being an aggregator. Otherwise, I agree with what you said about the aggregation model.
Martin: I think that content itself will continue to be valued by consumers, and I agree with you that trusted names and brand names may be more important in the Internet world as you have access to more and more information and entertainment. Being able to sort through and find things that you are going to watch may become more difficult and, in that sense, more challenging. But on the other hand, the business model that has traditionally sold packages of content in ways that don't allow for consumers to sort through and buy only what they wanted, will, I think, be challenged.
Look at what occurred in the music industry: It's not that people are consuming less music, they're just not as willing to buy albums when they only really want individual songs. Now consumers have also demonstrated that when they find the content they want, they're willing to pay more for getting exactly what they want. Consumers will pay more for part of a song as a ringtone than they do to buy the whole song.
Huey: As a regulator, can you address the issue of what you think, going forward, is actually possible to regulate, and what isn't? You talked about broadband and everything, and yet you still see the FCC fining CBS for Janet Jackson's brassiere flash, which seems kind of quaint and out-of-place in terms of what's actually available out there in an unregulated environment. So can you continue to regulate content, or can you just regulate access?
Martin: Most of our regulations are actually on the underlying infrastructure and the consumer access to that infrastructure, rather than to the content generally over it. That's where most of the government regulatory activities are. And I think that's an increasingly important role as media and the Internet allow people to pull down what they want.
You can think about it to some degree actually between pushing content and the consumers being able to pull the content they want. Traditionally, our regulation of content had to distinguish between those two. So in a broadcast medium, it was content that was being pushed out to everyone, and the individual consumer had very little choice in picking and choosing what they wanted. That underlined the Commission's having a different role in regulating the appropriateness of that content. But we don't have the same role in regulating content on the Internet, which is more of a pull medium. And that's created some of the tension, as some of the older media companies that have come under regulation, where they had to meet certain kinds of decency restrictions and would be competing with other media that don't. It's the reason we don't regulate content on cable. We don't regulate content on the Internet, but we do regulate the content on broadcast.