FCC Moves To Give Internet Video Startups The Same Protections As Cable Companies

from the actually-leveling-the-playing-field dept

Wed, Apr 8th 2015 8:12am — Karl Bode

While the FCC's decision to raise the base broadband definition to 25 Mbps, its ruling on municipal broadband and the agency's new net neutrality rules have seen the lion's share of media attention, there's another potentially important FCC plan underway that has largely managed to fly under the radar. The FCC has recently been fielding comments on whether the agency should reclassify linear over-the-top (OTT) Internet video providers as multi-channel video programming distributors (MVPDs), giving these companies FCC-enforced access to vertically integrated programming. The full order can be found here (pdf).

The idea is that by giving Internet video providers formal protections and the right to negotiate content deals like cable companies, we'll see a surge in Internet video service competition and a reduction in the logjam surrounding content licensing. Note that this would only really impact subscription-based, prescheduled content (live TV), and as a result wouldn't really apply to on-demand catalogs like Netflix or YouTube. Not too surprisingly, the cable industry, still sore from the FCC's Title II ruling and wary of new competitors, doesn't think modernizing cable regulations to include Internet video is a great idea:

"[H]aving recently adopted what was once understood to be the 'nuclear option' of Title II regulation of broadband Internet access service to address a hypothetical threat to the openness of the Internet," NCTA told the commission, "the Commission in this proceeding is proposing to apply an arsenal of regulations from the Cable Consumer Protection and Competition Act of 1992, purportedly to promote competition in the already competitive and well-functioning online video marketplace."

Some of the new wave of Internet video giants similarly aren't happy with the idea. Even though the rule change likely wouldn't impact the company's on-demand services specifically, an Amazon filing with the FCC argues it doesn't really want the FCC's help, either:

"In light of the excellent results achieved over the last several years, Amazon does not see why the commission would risk interfering with the OTT marketplace, which is still growing and changing, at this stage in its development," the company said. Amazon argued that services offered by Amazon, Netflix and Apple represent a whole new ballgame, not another team in the MVPD league. It said that planned services from Dish and HBO are an effort to be players in this new space, a space it and others have been building for years."

Amazon's likely wary for two reasons: the company's already seeing success and is justly nervous about regulatory good intentions, and the FCC's proposal could actually go both ways -- as in it might help cable operators looking to deploy an out-of-footprint streaming service (giving them mandated access to regional sports networks, for example), generating additional competition for Amazon. Meanwhile, broadcasters like ABC, CBS, Fox, and NBC support the measure, pleased that it would force OTT upstarts into gaining consent out of the gate for retransmitting their broadcasts (read: they think it will help thwart piracy or force the next Aereo to the negotiations table).

Consumer advocates like Public Knowledge quite like the rule change, suggesting it could ramp up competition and bring down prices "without subjecting most kinds of online video services to additional regulation." The updating of the definition of an MPVD could provide Internet video companies with protections they didn't have previously:

"That interpretation meant that none of the protections that MVPDs have against other MVPDs, and that programmers have against MVPDs, applied to online video. That means that programmers could be prevented through contracts or incentives from selling video to online services, and that programmers affiliated with cable companies could discriminate against online services. Actions like this can add up to starve online video services of content--which is why most of the most popular services offer video that is complementary to traditional MVPD service (back catalog programming, and original and user-generated content) instead of the same lineup of things like first-run shows and live sports."

For an agency that spent decades paying empty lip service to competition, the FCC's focus in this case really does appear to actually be on modernizing regulations to help foster competition and protect the smaller Internet video providers of tomorrow. Reclassifying ISPs as common carriers under Title II protects upstart companies from discrimination by broadband and cable companies, and reclassifying Internet video providers as cable companies would provide them additional protections and programming negotiations rights they don't currently have.

In short, for the first time in fifteen years or so the FCC actually appears to be focusing on competition as a real policy goal. That's in stark contrast to the expectations most people had (myself included) when we learned that a former wireless and cable industry lobbyist would be the latest to run the FCC.

FCC 14 210A1 (PDF)FCC 14 210A1 (Text)

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Filed Under: fcc, multi-channel video programming, mvpd, online video, ott, over the top video

21 Comments

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Anonymous Coward, 8 Apr 2015 @ 8:28am

Why now?
It in interesting that a democratic Whitehouse is leading this since the liberal media companies and dems have been bedfellows for a long, long time now. Wonder if they have some strained relations now? Or maybe aren't getting the donations they want?
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Anonymous Anonymous Coward, 8 Apr 2015 @ 8:34am

Fallacy=Fail
FCC, an independent agency, is not lead by the White House. Since you are beginning with that premise, everything else you say can be ignored. Come on back to reality, maybe someone will listen.
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Anonymous Anonymous Coward, 8 Apr 2015 @ 8:37am

Re: Fallacy=Fail
Whoops, that was meant as a response to Anonymous Coward, Apr 8th, 2015 @ 8:28am
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Anonymous Coward, 8 Apr 2015 @ 8:39am

Re: Fallacy=Fail
FCC, an independent agency

No such thing.
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Anonymous Coward, 8 Apr 2015 @ 8:42am

Re: Re: Fallacy=Fail
Read this:

http://www.fcc.gov/leadership
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Anonymous Coward, 8 Apr 2015 @ 8:42am

...NCTA told the commission, "the Commission in this proceeding is proposing to apply an arsenal of regulations from the Cable Consumer Protection and Competition Act of 1992...

How dare they...apply the law...?
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mr. sim (profile), 8 Apr 2015 @ 8:45am

too late for aero but this might prevent the next aero from being murdered in it's crib by the monsters called lobbyists and the copyright murders.
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AN onymous, 8 Apr 2015 @ 8:48am

Re: Fallacy=Fail
these type of actions are an attempt to troll for donations. You will see more of this as we get closer to the elections.
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Dave (profile), 8 Apr 2015 @ 8:48am

Re: Why now?
Disney is not a huge fan of Comcast getting more control over the TV space, because Comcast can use that control to keep ESPN's ever-growing carriage fees in check. There's a reason Disney was first to strike a deal with Dish Network to put channels on Sling TV, which happened within weeks of Comcast announcing it was buying out Time Warner Cable.

So it's entirely possible that at least one giant media company is getting something it wants out of all this.
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Anonymous Coward, 8 Apr 2015 @ 8:49am

Everyone keeps throwing around the "nuclear option" terminology as if Japan didn't become one of our greatest allies and most developed countries after the "nuclear option".
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PRMan, 8 Apr 2015 @ 9:01am

Re: Re: Why now?
That sounds like a whole lot of conjecture. Does anyone have any links to anything that would support this?
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PRMan, 8 Apr 2015 @ 9:02am

Re:
We can just call this, "The Aereo Regulations" in honor of their fallen cause.
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Anonymous Coward, 8 Apr 2015 @ 9:02am

Re:
Hmm... actually this would have even made the argument against Aereo stronger. After all, the reason they were prevented from rebroadcasting "stolen" signals from local stations was because they appeared to be like a cable company - as such since they looked like a duck and walked like a duck, they were assumed to be a duck. In this case, cable companies must license their redistribution of content - they aren't allowed to just receive a random broadcast and then stream it over the internet.

So yes, while this might provide more Aereo-like competition, it would not have saved Aereo, and would have likely sealed their fate even sooner.
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James Burkhardt (profile), 8 Apr 2015 @ 9:10am

Re: Re:
Except that after the ruling, they tried to licence their content via satutory licencing and failed because as an online service they couldn't be a cable company.
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James Burkhardt (profile), 8 Apr 2015 @ 9:13am

Re: Re:
REmember they actually were told they couldn't licence content before the Supreme Court ruling either. They went back after the supreme court said they were a cable company, and tried to again, only to be told they werent a cable company. This could have saved aereo.
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Anonymous Coward, 8 Apr 2015 @ 9:28am

Re: Re: Re:
Fair enough, I suppose if they had been allowed to do so, it may have extended their life.

My guess is that those licenses have a lot of restrictions - so on the one hand, they could probably have simplified their infrastructure (rather than designing one antenna per user, use a single antenna to receive the broadcast), but on the other hand, they may have been severely limited in where they could stream the content due to other license restrictions.

It's hard to say one way or the other - but their original business model suggested licensing the content wasn't necessary or desired.
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Anonymous Coward, 8 Apr 2015 @ 9:54am

Re:
And how that all went down was clear as pudding too. Most people do not really know why Japan became friends with the US.

It was Russia, they had boot hovering over Japan, and when US dropped the 1st nuke they did not surrender. Seriously they just got nuked and peeps said... fuck no, you cannot scare us, we will die for the emperor (their closest version of a God). Then the 2nd one hit and Russia was at the door. They said... surrender to the US or fall to the Soviets? You tell me... what would you have done?

Now-a-days surrender to the USA is about the same as surrendering to anything else... just ask our US Territories!
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Anonymous Coward, 8 Apr 2015 @ 11:28am

Re: Re:
quick question, who was aero competing against?
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James Burkhardt (profile), 8 Apr 2015 @ 2:40pm

Re: Re: Re: Re:
More then suggested. They didn't need to. The supreme court created a new legal test out of whole cloth to decide against them.

That said, They had, within 2 weeks of the supreme court decision, gone to court saying "Ok, We were wrong. We ARE a cable company. Give us the statutory rates." This very FCC action being discussed was suggested by Aereo back when they were denied statutory rates.
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Anonymous Coward, 9 Apr 2015 @ 3:34pm

Neither of these are at all correct.

Meiji Japan was fully prepared to fight to the last man because the honor of the Emperor had to be upheld even unto death. The US, realizing this, decided it would attempt to "break Japan's spirit" by deploying their new weapon (which only the scientists seemed entirely confident would work as advertised, despite the Trinity tests) the atom bomb. A list of targets was drawn up, Hiroshima and Nagasaki ended up passing the grade, and the first bomb was dropped on Hiroshima. Despite being literally the most primitive atomic weapon ever devised (the second was noticeably more advanced), and very little of the matter inside achieving fission, it was still more than enough to level the city. In the interim the Japanese government couldn't get their shit together fast enough to not only decide to surrender (at the emperor's insistence, it should be noted) but also _whom_ to surrender to: the Soviets? The Americans? Not liking this, we decided to show all the restraint of boys with their shiny new toys and dropped a second atomic device on Nagasaki, in the process committing what I personally believe to be an atrocious war crime we haven't ever answered for to this day.
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Robert, 10 May 2015 @ 5:05am

This is great news,IMHO. These internet video startups are the future, whether we like it or not, so there's only going to be more of them in the coming years, even months. So it's definitely a sound idea that they should be regulated.
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