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Editorial: MVPD,Or Not MVPD?

We have been thinking, and occasionally saying, for more than a year now that the FCC needs to weigh in on what the regulatory status of online video will be in the vaunted digital present. Let’s face it. To paraphrase George Allen—the football coach, not the former senator and governor—the digital future is now.

When it approved the Comcast/NBCUniversal merger, one of the most telling conditions the FCC imposed was access to Comcast/NBCU-controlled programming by over-the-top providers. That raised the question of whether the requirement would remain simply a deal-specific condition rooted in the combination of the largest cable operator and a major programmer, or be applied more broadly.

Confining that genie to the bottle of Comcast/NBCU did not appear likely from this vantage, since the TV everywhere, anywhere, anytime model has become the general trend across the industry as a whole—a trend that now seems in overdrive, with each new turn of the news cycle turning up plans to put content online to serve mobile, tablet-toting, smartphone-obsessed, computer-centric audiences.

Washington now appears to be catching up with technology, a chase it likely can’t win unless it starts aiming a little more ahead of the curve. That is, by the way, an argument for not imposing government guidelines on how to protect cybersecurity, another online issue that’s getting big play in Washington these days.

If the FCC is going to promote broadband as the video delivery mechanism of the future, it needs to establish ground rules—or, put another way, some of that vaunted regulatory certainty it does not seem able to provide on media ownership rules. In this case, the decision to make is whether online video distributors are equivalent to traditional MVPDs, like cable operators. And if so, does that mean they should be subject to access and carriage requirements, including must-carry rules?

The FCC has asked for comment on the issue, suggesting that applying those regulations could discourage innovation and online video distribution, something the FCC would not be looking to do. But if online “virtual” cable systems or other aggregators of online content are not subject to carriage obligations, that would give them a competitive advantage over traditional delivery, a thumb on the scale as it were.

Of course, that could drive traditional cable operators from their disadvantaged traditional distribution business into the TV Everywhere model, given that cable operators are also leading ISPs. That would certainly play into former FCC chairman Reed Hundt’s plan for a government-engineered broadband takeover of the media high ground.

The FCC will get some help from Congress in ferreting out some answers. Sen. Jay Rockefeller (D-W. Va.) has scheduled a hearing for this week on the migration of video from traditional TV to online and what that would mean for consumers.

Fair enough, but as important to us is what it will mean for the companies that have built the infrastructure and ponied up big bucks for must-see programming. One thing that shouldn’t happen is a government thumb on the scale when it weighs the relative merits of delivery systems. Let the best business model win.