For FCC, These Are Defining Times for MVPDs

Commission gets earful on repercussions of decision on OVD status 6/25/2012 12:01:00 AM Eastern

What’s in a name? Well, if the letters read “MVPD,” you’re
now talking, without bombast, about the future health of
over-the-air TV.

The Federal Communications Commission has plenty to chew over
as it considers whether or not to redefine multichannel video programming
distributor (MVPD) to include online video.

At issue is nothing less than whether the retrans
wand program exclusivity rules for compensating
broadcasters for TV station retransmission will
migrate online along with video delivery. The
other option: Whether the FCC—as a practical
matter—will cut the cord on those regs by finding
that OVDs (online video distributors) are not like
MVPDs because they do not control the transmission
path for the programming they deliver.

Broadcasters are currently battling several OVDs
in court over carriage of their station signals, and
have secured at least preliminary injunctions in
some cases.

This invariably leads to a further query: If the
FCC does carve out online distribution from those
regulations, does that provide an alternative path, as it were, for cable
operators or telcos to avoid carriage or access regs?

A larger question is whether the FCC should decide those potentially
industry-remaking questions in the context of a program-access complaint
by over-the-top provider Sky Angel against Discovery Communications.

Most commenters suggested the complaint was not the right venue
to decide the issue, but that didn’t stop them from weighing in on what
the FCC should do as it proceeds on that course.

The commission clearly has to make a decision before online video
becomes a direct competitor to traditional cable and satellite, a day the
commission has said is not here yet, but is definitely looming.

Here is a sample of input the FCC could use to drive that decision:

Retransinjeopardy.com: CBS Corp. CEO Leslie Moonves has led
the charge for retrans cash for carriage, which is turning into a multibillion-
dollar revenue stream. In its filing, CBS points to what it said is
online video distributors’ “convenient” reading of the rules to conclude
that they are cable systems, and are, therefore, covered by the compulsory
copyright license and don’t have to negotiate individually with the
programmers of TV station content…but that they are not MVPDs and
thus are not bound by retrans rules to pay broadcasters for the retransmission
of their signals. That, said the network, would conveniently
result in their being able to avoid compensating both those who create
the content and those who make it available to viewers.

CBS said the goal of those online providers is clear: “Have broadcasters
and copyright owners bear the costs of creating and producing
television programming, and then reap the profits from reselling it.”

CBS and the other networks have taken on ivi inc., FilmOn and
Aereo TV over their offerings of online transmission
of TV station signals without permission or
retrans payments.

• PEG Problems:
Also in play are the public access,
educational and government (PEG) channels
for which MVPDs are required to set aside channel
capacity. In a joint filing, the city of Boston and
Montgomery County, Md., told the FCC that if it
defined MVPD too narrowly, it could give cable
operators a chance to skirt PEG and public safety
communications obligations.

The filing cited the flap concerning Comcast’s
delivery of programming to Xboxes over a private
broadband network, which exempted that service
from the data limits/charges that apply to Xfinity
content delivered over the Internet. “Enormous injury
can follow if cable operators can avoid obligations under the Cable
Act by using a slightly different technology to deliver the same type
of programming via the same cable system,” the municipalities wrote.

• MVPDs—They’re Comcastic: For its part, Comcast/NBC Universal
Media (NBC’s cable channels) said the FCC should affirm its tentative
conclusion that OVDs are not MVPDs because they do supply a
transmission path along with their programming. The nation’s largest
cable operator argues that that does not mean the MVPD must own the
underlying facilities or do the transmitting. “It simply means that, when
a customer purchases multiple channels of video programming from
an MVPD, she need not separately purchase another service to deliver
those channels to her home,” Comcast wrote.

• Can You Hear Us Now?
Verizon said traditional video distributors/
ISPs that are defined as MVPDs when they provide traditional video service
should be able to enter the over-the-top video services market on the
same terms and conditions as other OVDs. That would mean they would
do so without any access or retrans obligations, if the FCC concludes
OVDs are not MVPDs. But Verizon also concludes the best approach
would be to get rid of legacy regulatory requirements on all MVPDs.

The FCC has not issued any timetable on when it will rule on the Sky
Angel complaint, or how the agency will resolve it if it does not make
a call on the definition of OVD.

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