For FCC, These Are Defining Times for MVPDs

Commission gets earful on repercussions of decision on OVD status

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 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 not 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.

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton