Wheeler Wants Pay-TV Status for OTT

In a move aimed at promoting more video competition, FCC Chairman Tom Wheeler wants to broaden the US regulatory definition of a pay-TV provider to cover many OTT video providers.

Wheeler made his preferences clear in his keynote address to skeptical cable executives at the Internet & Television Expo (INTX) Show in Chicago earlier this week. Referring to a pending proposal now before the Federal Communications Commission (FCC) , he said he favors a "technology-neutral" definition of a multichannel video programming distributor (MVPD) that would cover online video providers (OVDs) offering linear video programming, even though they don't have distribution pipes of their own.

Granting official MVPD status to OTT video players would enable them to gain access to content under the FCC's program access rules. That would allow them to license programming from broadcast and cable networks and other content providers, like conventional pay-TV providers do now. In addition, they would be able to negotiate content retransmission rights with broadcasters, just like pay-TV providers.

But, along with such important rights, online video providers would be subject to certain obligations that now apply only to traditional MVPDs. Among these, OTT providers would have to deliver closed captioning and emergency services information to viewers. (See A Video Rose by Any Other Name? and To Be or Not to Be an MVPD.)

This controversial proposal, which is now winding its way through the FCC's public review process, is supported by the nation's broadcasters, many programmers and such prospective OTT players as Verizon Communications Inc. (NYSE: VZ). But it's opposed by most of the major pay-TV providers and their respective associations, including AT&T Inc. (NYSE: T), DirecTV Group Inc. (NYSE: DTV), the National Cable & Telecommunications Association (NCTA) and American Cable Association (ACA) .

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In fact, the cable groups argue that the FCC doesn't have the power or the right to define OVDs as MVPDs because online providers don’t own and control the video transmission path. They say the MVPD rules are meant to cover just facilities-based video providers, not ones without their own distribution pipes.

Wheeler spelled out his preference for a technology-neutral definition of an MVPD in the same speech where he defended the Commission's recent move to impose utility-style Title II regulations on cable operators and other broadband providers, as well as its decision to block Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed takeover of Time Warner Cable Inc. (NYSE: TWC). So the former NCTA chief did not exactly leave the convention hall with the Mr. Popularity award from his former cable constituents. (See Wheeler to Cable: Suck It Up.)

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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