Editorial: Defining Patience

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.