Editorial: The Digital Divide

Broadcasters balk at FCC’s OTT reclassification
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The power of the Internet extends to its ability to divide broadcasters and cable operators—even broadcasters and other broadcasters—over how to treat online video.

Broadcasters are faced with something of a dilemma. Wearing their studio hats, some major broadcasters— CBS, Fox, Disney—two weeks ago told the FCC it should back off from a proposal to reclassify some over-the-top providers as multichannel video programming distributors, so they can have the same nondiscriminatory access to vertically integrated programming as traditional MVPDs.

The National Association of Broadcasters, whose members include those three, filed separately in the docket in favor of the move, though with some important caveats.

Likely seeing the digital handwriting on the wall—namely, figuring that the FCC wants to promote linear online video providers as a competitor to cable and satellite—the NAB says it supports the FCC move as a way to “make clear that OVDs are subject to the benefits and obligations of the retransmission consent regime, benefiting OVDs, broadcasters and local viewers.”

And cable operators are arguing that the definition of MVPD can’t be stretched to fit over-the-top.

Missing from this roster of combatants is Comcast/NBCU, which is neither allying itself with other networks nor weighing in on NCTA’s filing.

When all is said and done, we tend to believe the FCC is going to approve some form of OTT redefinition, and sooner rather than later. With the chairman’s “competition, competition, competition” mantra driving decisions there, helping online distributors measure up to traditional cable and satellite MPVDs would appear clearly to be in the game plan.

We have long encouraged the FCC to resolve the issue, but it is a tough call. If the commission does define linear OVDs as MVPDs, it needs to do so in a way that squares their obligations and privileges as closely as possible with the satellite and cable models. Picking and choosing among those would be the same as picking winners and losers in the marketplace, which is not the FCC’s job.

The power of the Internet extends to its ability to divide broadcasters and cable operators—even broadcasters and other broadcasters—over how to treat online video.

Broadcasters are faced with something of a dilemma. Wearing their studio hats, some major broadcasters— CBS, Fox, Disney—two weeks ago told the FCC it should back off from a proposal to reclassify some over-the-top providers as multichannel video programming distributors, so they can have the same nondiscriminatory access to vertically integrated programming as traditional MVPDs.

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