Wheeler Gets Down With OTT
It's all in the name of competition.
Nearly a quarter century after Congress mandated access to cable programming for satellite TV companies in 1992, Federal Communications Commission (FCC) Chairman Tom Wheeler is ready to do the same for online video providers. In an official blog post Tuesday, Wheeler proposed a rulemaking proceeding that would broaden the definition of a multichannel video programming distributor (MVPD). In an effort to ensure the FCC's rules don't create a barrier to competition, Wheeler said he would like to create an MVPD definition that is technology-neutral, making room for IP-based video delivery. By doing so, Wheeler argued that the Commission would open up new opportunities for over-the-top service providers and create new video choices for consumers.
A news report by Broadcasting & Cable first leaked the idea that the FCC was considering a notice of proposed rulemaking (NPRM) on the definition of an MVPD last month. The move follows a lengthy legal saga in which Internet streaming startup Aereo Inc. opened up the debate over content rights online by transmitting free broadcast TV to subscribers over the web. The US Supreme Court ruled that Aereo couldn't bypass licensing fees for broadcast content because the company was "for all practical purposes a traditional cable system." (See Aereo's Cable Status Denied by Copyright Office.)
However, Aereo then found itself between a rock and a hard place when a US District Court judge ruled that -- despite the Supreme Court's decision -- the company still couldn't legally be defined as a cable operator, or granted the right to negotiate TV retransmission-consent deals. Stuck in limbo, Aereo has been searching for a viable business strategy ever since.
Chairman Wheeler specifically referred to Aereo in his blog post on the new NPRM, noting that the streaming company recently visited the FCC and asked the Commission to reconsider its MVPD definition. Wheeler agreed that an update could help companies like Aereo, and also pointed out that a new MVPD classification could benefit Internet-only service providers as well. "An updated definition of MVPD," he wrote, "would permit a new broadband competitor to offer customers the ability to reach a variety of OTT video packages without necessarily having to enter the video business itself."
Reactions to the proposed NPRM are still rolling in. Aereo CEO Chet Kanojia reportedly said, "This is an important step in the right direction for consumers. Clarifying the definition of MVPD to encompass linear online video distributors will create a stronger, more competitive television landscape for consumers."
In a statement, the National Association of Broadcasters (NAB) said, "NAB welcomes video distribution platforms that legally deliver local TV content to consumers when and where they want it. We look forward to engaging with the FCC to ensure that this new competition enhances rather than undermines localism."
Taking great exception to Wheeler's move, the National Cable & Telecommunications Association (NCTA) argued that consumers are already "reaping the benefits of robust competition and an ever expanding menu of video options." The group warned that changing the MVPD definition "raises profound questions about how government will extend regulation to Internet video services and how any would-be virtual MVPDs will meet their 'social compact' obligations." With "so many unknowns," the NCTA cautioned the FCC against "creating new problems that would result in unintended consequences and would fail to honor principles of competitive neutrality among rival providers."
For its part, the American Cable Association (ACA) didn't really state a position on Wheeler's decision. Instead, it pounced on the chairman's blog post to make its case again for reform of the FCC's program access rules for all pay-TV providers, not just the larger providers and OTT providers. The group, which represents independent and smaller cable operators, contended that extending the program access protections that large MVPDs now enjoy to smaller MVPs would benefit many broadband providers and increase competition in the market as well.
— Mari Silbey, special to Light Reading