FCC regulations for media distributors
In the last part of the series, we learned that the FCC (Federal Communications Commission) is the primary regulator of the media sector in the United States. We also saw that the FCC particularly regulates distributors in the media value chain.
If you want a diversified exposure to these three media distributors, you can invest in the Consumer Discretionary Select Sector SPDR Fund (XLY). The ETF held a total of ~10.3% in these companies as of March 2, 2015.
Satellite TV providers
The FCC allocates frequencies over which satellite TV providers such as Dish Network (DISH) air their programs. It also gives licenses of long durations, usually ten to 15 years, in order for satellite and earth space stations required by satellite TV providers to broadcast their programs.
The FCC also regulates the required must-carry programs of some local stations on satellite TV providers networks.
We learned earlier in this series that apart from video services, cable companies also offer voice and broadband services similar to those provided by telecoms. Cable companies are required to carry content of local stations that choose not to give retransmission consent. Local stations have to choose every three years whether they want to retransmit their programs on the cable networks.
FCC regulations include the FCC’s oversight of must-carry rules. The FCC also regulates pricing of basic services provided by cable companies in areas where it believes competition is insufficient. As you can see in the above chart, around ~80% of Comcast’s video subscribers did not come under the purview of the FCC rate regulation at the end of 2014.