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D.C. Goes Over the Top in Regulation Rulings

The FCC signaled in the Comcast/NBCU deal that it expected over-the-top video to become a competitor to traditional multichannel video programming distributors (MVPDs) going forward and, therefore, included conditions requiring the industry giant to make its programming available to OTT providers on nondiscriminatory terms and conditions.

But how, and whether, the FCC extends the rights and obligations of MVPDs to the increasingly wide world of online video providers will help shape the future of video distribution, and act as another shifting presence in the tug-of-war between Hollywood and technology developers (see Cover Story). As Disney told the FCC recently, the decision has potentially “far-reaching ramifications for online distributors of video programming, broadband Internet service providers, onDemand video program providers, cable-affiliated programmers and television broadcasters.”

The FCC tentatively concluded in the Sky Angel complaint against Discovery that to be an MVPD required both a transmission path—fiber, copper, satellite—and the programming channels, which would exclude online programming aggregators such as Sky Angel.

But before it set those words in regulatory stone, the commission asked for comment on whether or not it was the right call. The answer will greatly affect the future of over-the-top video.

Don’t look for the FCC to weigh in on Sky Angel anytime soon. According to sources inside and outside FCC headquarters, the commission will almost certainly issue a separate rulemaking on the definition of an MVPD, with a Sky Angel decision—which hinges on that definition— coming sometime after that. Representatives on both sides of the issues have counseled the FCC to open new proceedings.

The commission has already asked the industry to weigh in on the pros and cons of designating over-the-top providers as MVPDs, but that was in the context of the Sky Angel complaint, and many of those comments were that the decision was too important not to get its own proceeding. The FCC apparently agrees. And while they may want this separate proceeding, many stakeholders have already tipped their hands. Here are a few of them:

TV Writers:
Scribes would prefer to see a “technology-neutral” definition of MVPD, which means they want online providers to be subject to the same access requirements that require cable operators to carry program networks on nondiscriminatory terms and conditions. “Narrowly de! ning MVPDs to require both the transmission path and the video programming channels would deprive consumers of competitive offerings from Sky Angel and other potential market entrants such as Intel, Sony and Apple,” the Writers Guild of America, West wrote in comments titled, “A Broad Interpretation of the MVPD Definition Will Enhance Competition.” That would mean decreasing the number of outlets for TV programmers and, thus, writers. Without FCC action, say the scribes, content creators won’t reap the rewards of the new platform.

Disney: Looking out for the interests of its owned TV stations, the Walt Disney Co. told the FCC that no matter how you define an MVPD, if over-the-top providers retransmit TV station signals “and the copyrighted content they deliver,” they must get consent to do so. And the de! nition of retransmission is at the heart of the Aereo debate .

Cable Ops:
The National Cable & Telecommunications Association, whose members serve most cable subs nationwide, said they definitely don’t want the FCC to give over-the-top providers the same rights and obligations as MVPDs, arguing it would lead to expansive regulation of the Internet.

“As anyone who has searched for videos on YouTube or Google knows, virtually anyone can—and does—distribute video programming online,” the NCTA says in its filing. Eliminate the transmission path from the definition, says the association, and the FCC would be faced with the essentially impossible task of “applying MVPD status to a set of online entities that the Commission neither tracks nor licenses, which may or may not even possess any physical facilities in the United States, and which were never intended to be the subjects of such regulations.”

The National Association of Broadcasters, as well as consumer groups and TV affiliate associations, see some ulterior motive in the stance of cable operators. They argue that those operators could recon! gure their systems—they have already established a strong online beachhead with TV Everywhere—to qualify for some rules, but fall outside of others. That is why the NAB tells the FCC it must apply retrans and program exclusivity rules to over-the-top providers.

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