As expected, the Federal Communications Commission (FCC) is opening the door to a redefinition of who qualifies as a multichannel video programming distributor (MVPD). A new definition that is inclusive of online-only services, such as those already provided by Netflix or proposed by the likes of Sony and Dish could have profound ramifications for competition in the video market.
The question is coming up with increasing frequency, and cannot be ignored. Sky Angel continues to press its case. More recently, the Supreme Court confused the issue immensely by likening Aereo to an MVPD, even though absolutely nobody else agrees, a conundrum that helped drive Aereo into bankruptcy.
The question keeps getting begged: should online video providers be subject to the same rights and obligations that facilities-based MVPDs are subject to?
In its NPRM, the FCC said it has tentatively concluded “that the statutory definition of MVPD includes certain Internet-based distributors of video programming. Specifically, we propose to interpret the term MVPD to mean all entities that make available for purchase, by subscribers or customers, multiple streams of video programming distributed at a prescheduled time.”
But it cannot make that a final determination without public input. So late last Friday the FCC adopted a Notice of Proposed Rulemaking (NPRM) that asks for comment on the subject.
The Commission explained that the definition of an MVPD depends on the definition of the concept of a channel. Is a channel a consistent stream of programming from a single ultimate source (ESPN, Disney)? Or is it a physical channel that brings that carries that stream? That’s the difference between an Internet provider and a facilities-based provider.
From there, the hairs get split even more (linear versus on demand, and so on), and other difficult issues get raised, including how a redefinition of “MVPD” might also affect how programming is sold.
In other words, the discussion will lead into another argument loaded with its own landmines: retransmission agreements.
Speaking of the NPRM, the FCC said, “This is an important step in making sure the Commission’s regulations accommodate the technology transition occurring in the video distribution industry. This consumer-focused approach would ensure that incumbent providers will continue to be subject to the pro-competitive regulations that apply to MVPDs as they transition their services to Internet protocol delivery. It also would ensure that nascent, web-based video programming services will have access to the content they need to compete with established providers.”
Specifically, the NPRM proposes to interpret the term MVPD to encompass distributors of multiple linear video programming streams, the FCC said, including Internet-based services, and asks for comment on:
- An alternative interpretation that would require an MVPD to have control over a transmission path;
- How each interpretation would impact MVPDs, consumers, and content owners, and how each would promote competition and broadband adoption;
- How the Commission should apply its retransmission consent “good faith” negotiation rules with respect to Internet-based MVPDs to protect local broadcasters; and
- Whether these proposals would affect the regulatory status of IP-delivered video services by cable operators and DBS providers.
Comments and reply comments will be due 30 and 45 days after publication in the Federal Register. The NPRM outlines the procedures to follow when submitting comments.
