The Federal Communications Commission has opened a Pandora’s boxful of troubling and tantalizing possibilities with its request for comment on the definition of an MVPD and a “channel.”
One veteran Washington broadcast executive called this one of the more complicated FCC issues in recent memory, with various permutations that many still have not wrapped their minds around.
Most of last week’s comments said the issue was above the pay grade -- or words to that effect -- of the FCC’s Media Bureau. However, the affiliates of three of the Big Four networks -- Fox did not join in -- told the Media Bureau to go right ahead and define online video distributors (OVDs) as multiplatform video programming distributors (MVPDs). That appeared to be a reaction almost exclusively to the possibility -- or threat, if you will -- that if OVDs were excluded from that definition, they would also be exempted from the must-carry/retransmission consent regime that has started to deliver cash for carriage to network affiliates. And they would perhaps also be exempted from the exclusivity protections -- network nonduplication and syndicated exclusivity -- that protect their local market programming.
The networks may well be right in their preparatory concern— broadcasters are already engaged in myriad legal battles -- but we are not ready to simply let the Media Bureau redefine MVPD on its own dime and time. There are too many unknowns in the equation, and there’s too much at stake.
Cable operators oppose the redefinition, even though it would mean that over-the-top providers would be subject to some of the same regs— retrans, program carriage—as they are. Why not seek a level playing field? Perhaps because if they migrate their business online, and also provide facilities, they would be considered MVPDs that have a right to program access, while other OVDs would not have that same guaranteed access. Of course, that would mean still being subject to retrans requirements. But maybe they figure by that time, the TV station model will have morphed into something else.
The affiliates concede, as does the National Association of Broadcasters, cable operators, film studios, telcos and others, that the implications of redefining MVPDs to include over-the-top providers that do not deliver channels in the traditional sense, or have transmission facilities, “will have profound and far-reaching implications.”
If the FCC is seriously considering changing the definition, and it is, we believe it should do so at the commission level, with a notice of proposed rulemaking and a vote, after which Congress may even want to get into the act.
That isn’t to say broadcasters are wrong to fight for a level MVPD playing field. The NAB has advised the FCC to think long and hard about any redefining, adding that if it decides to do it, OVDs must be subject to the same retrans/must-carry and exclusivity requirements as traditional distributors.
It is clear that FCC chairman Julius Genachowski believes online video distribution over the Internet is a growth stock. Giving OVDs MVPD status would be yet another way to promote broadband deployment and the migration of all living things to the Internet, which sure appears to be an FCC priority. But the Media Bureau question comes as part of its review of a program access complaint filed by IP-delivered Sky Angel against Discovery. Is that really the right prompt to effect what would be a sea change in video delivery?
The FCC has two questions to answer. One: Under the commission’s and Congress’ current definition of MVPD, is an OVD without facilitiesbased distribution entitled to program carriage and access rights? Whether or not that definition has become outpaced by online events, as a legal matter we think that answer is “no.” The second, and more important, question is: Should that definition of MVPD be changed to include OVDs? That is a much tougher query, requiring a lot more patient thought, time and input.
Some of the same folks who argue that the FCC’s regulations are now stored in creaky, leaky silos that should have already been obliterated by the digital age are arguing here that regs based on 20-year-old definitions should remain the law of the land. Something is going on beyond simply the definitions in a years-old complaint.
This is a judgment to which the FCC should not rush. Period.
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