In a 2006 paper, Solveig Singleton recalled the outcome of the FCC's 1990s experience with Open Video Systems:
Travel back with me to when the phone companies' main interest was getting into the cable television business. The late 1980s and early 1990s. The FCC, always anxious to encourage competition, were ready to let the telcos in, provided of course, that they operate their video networks so as to allow equal access and reasonable charges and no exclusivity and/or discrimination... on and on. With the 1996 Act video dialtone was swept away and replaced with a regime of open video services, a model requiring operators to reserve two-thirds of their channel space for unaffiliated content. And despite deregulatory intentions it still went nowhere, especially after the federal courts ruled that OVS operators needed local franchises as well as federal approval.
These brave egalitarian proposals never bore fruit. There were a few trials here and there. But basically nothing. It wasn't just that the Internet came along, and interest in getting into the one-way video delivery business waned. The whole regulatory apparatus and process inspired by common carriage was just way too cumbersome and slow, and promised far too little return on investment. If there hadn't been so much delay and complication on the regulatory front, telcos and others could have moved into the video business with some alacrity, before the Net. It was no mere accident of timing that investment moved into then much-less-regulated networks. Investment will always go there.
Right now there are huge opportunities for growth and expansion of broadband networks and services, including content. And problems as well, from spam to capacity limits, from authentication problems to quality of service issues. Hopefully these issues all have technical solutions, but deploying those solutions is going to take some capital. Do we really want to narrow the business models that can be used to raise and recover that capital down to... video dialtone for the Net? Ugh.
A sampling from the FCC's 1996 Final Rule on OVS:
15. If demand for carriage does not exceed system capacity, the open video system operator may fill all video programming providers’ demands for capacity, including its own. If demand for carriage exceeds capacity, the open video system operator may select the programming services on no more than one-third of the system’s activated channel capacity. Public, educational, and governmental (‘‘PEG’’) and mustcarry channels carried pursuant to Sections 611, 614 and 615 of the Communications Act will count in the system’s total activated channel capacity for purposes of calculating the operator’s one-third limit, but will not count against the operator’s one-third limit. Channels carrying ‘‘shared’’ programming will count against the operator’s one-third limit on a pro-rata basis, e.g., if the operator shares the channel with one other video programming provider, it will count as half of a channel against the operator’s limit. The remaining two-thirds of capacity, other than PEG and must-carry channels, must be allocated to unaffiliated video programming providers on an open, fair, nondiscriminatory basis. The Commission does not require a specific allocation methodology.
Note especially the "consider." So if capacity is unused and the system is on life support, the FCC will hold an extensive hearing at which all competitors and "public interest" reps get to come in and babble.
Gee, how could rational investors resist such an opportunity? One looks forward eagerly to reading the net neutrality rules in the Fed Reg. It took 22 pages of fine print to kill OVS; killing the whole Net might take a little more.