multichannel video programming distributor

Over-the-top video systems, using the Internet to transmit over-the-air TV signals to consumers, are back in the news. Last week, a US District Court Judge in the Central District of California, in a case involving FilmOnX, an Aereo-like service that had been involved in many of the court decisions that had preceded the Supreme Court’s Aereo decision, suggested that such platforms can get that public performance right through the statutory license provided by Section 111 of the Copyright Act – the same section of the Act that allows cable systems to retransmit broadcast signals without getting permission from every copyright holder of every program broadcast on those stations. Just last year, we were writing about the Supreme Court decision in the Aereo case, where the Court determined that a company could not use an Internet-based platform to stream the signals of over-the-air television stations within their own markets without first getting public performance rights from the stations themselves. The new decision raises the potential of a new way for these Internet services to try to get the rights to rebroadcast TV signals.

The FilmOn decision was on a motion for summary decision, and is a very tentative decision – the Judge recognizing that he was weighing in on a very sensitive subject, going where both the FCC and the Copyright Office have thus far feared to tread, and disagreeing with the Second Circuit Court of Appeals that had held the opposite several years ago in the Ivi decision. The FilmOn decision is a preliminary one – subject to further argument before the Judge at the end of the month. Even if adopted as written, the judge recognized the potential impact of his decision, and the fact that it contradicted Ivi and other decisions. Thus, the decision stated that its effect would be stayed pending an immediate appeal to the Ninth Circuit Court of Appeals. So, even if finalized, we have not seen the last of this argument yet.
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The FCC issued a public notice seeking comment on a Petition for Rulemaking filed by cable operator Mediacom asking for the FCC to require TV stations, in their license renewal applications, to certify that the licensee will not block any multichannel video programming distributor (i.e. cable or satellite TV) from carrying the signal of the station at the end of a retransmission consent agreement unless the station is accessible over-the-air or by Internet streams to at least 90% of the homes in the market served by the MVPD. Comments on this Petition are due by August 14. This is an initial Petition for Rulemaking (which can be viewed here), so these comments will inform the FCC as to whether to further pursue the proposals made in the Petition through a formal Notice of Proposed Rulemaking which would be needed before a rule change.

Obviously, this petition raises controversial issues. Mediacom asserts that it is looking after the interests of consumers in being able to access television programming – and not losing that access during retransmission consent negotiations. Broadcasters, on the other hand, feel that the ability to remove their signal from an MVPD is their most effective bargaining chip in retransmission consent negotiations. Broadcasters will no doubt argue that they have the rights to their programming and, if the MVPD will not agree to terms for its carriage, the MVPD should no longer have the right to carry the programming.
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As in any month, February has many impending deadlines for broadcasters and media companies – many routine regulatory obligations as well as some that are specific to certain proceedings.  First, let’s look at some of the routine filing deadlines.  On February 2, license renewal applications in the second-to-last filing window of this renewal cycle are due to be submitted to the FCC by TV stations in New York and New Jersey.  The last TV stations to have to file in a regular renewal cycle will be due on April 1, for those TV stations in Pennsylvania and Delaware.  After these stations complete their renewal filings, it will be another 5 years before another set of routine license renewals are to be filed.  Stations in Pennsylvania and Delaware should be broadcasting their pre-filing announcements on February 1 and February 16 (and there are also post-filing announcements that need to be run by the New York and New Jersey stations, as well as those in New England that filed their applications by December 1). 

Radio and TV stations in New York and New Jersey, as well as in Arkansas, Kansas, Louisiana, Mississippi, Nebraska and Oklahoma, should be placing EEO Annual Public File Reports in their public files (online for TV and paper for radio, with links to the reports on their websites) by February 1 if they are part of an employment unit with 5 or more full-time employees.  By February 2, noncommercial TV stations in Arkansas, Louisiana, Mississippi, New Jersey, and New York should file with the FCC their Biennial Ownership Reports, and noncommercial radio stations in Kansas, Nebraska, and Oklahoma should be filing those same reports on February 2.  Commercial radio and TV stations in the entire country will be filing their Biennial Reports in December of this year.  A guide to many of the regular FCC filing deadlines can be found in our Broadcasters Calendar available here.
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Could a change in the FCC treatment of Internet delivered video services be in the works – and how would that affect services like Aereo?  There were a number of published articles last week that suggested that the FCC was considering extending the definition of a Multichannel video programming distributor (MVPD) to over-the-top video providers or, as they are apparently being referred to, as Online Video Distributors (OVD) who provide linear programming like a cable or satellite company (as opposed to an on-demand provider like NetFlix).  While Chairman Wheeler at a press conference following last week’s open FCC meeting reportedly stated that the issue was “kicking around” implying that no decisions had been made, the FCC did announce that it was making a long-outstanding proceeding to look at this issue into a “permit but disclose” proceeding, meaning that parties can lobby the FCC on the issue as long as they file statements for the record disclosing the substance of their conversations with decision-makers.  What does all this mean?

If the Commission were to consider OVDs to be MVPDs, they would presumably be covered by all of the rules that apply to cable and satellite – including provisions that allow equal access to cable network programming in which the cable companies have a financial interest, and would also be subject to the must carry-retransmission consent regime that is applicable to other MVPDs, requiring MVPDs to negotiate with (and in many cases pay) TV stations to carry their programming.  The open proceeding to consider OVDs as MVPDs was started by a company called Sky Angel that focused on family-friendly programming.  The service initially delivered its programming by satellite, but migrated it to the Internet, at which time they wanted access to cable programming including Animal Planet.  When access to that programming was denied, they complained to the FCC.  The FCC staff initially denied the complaint, determining that MVPDs had to be “facility based,” meaning that they had to own the actual facilities that delivered the programming to the consumer.  The full Commission over two  years ago asked for public comment on whether this decision was correct – we wrote about that request for comment here and here – and the proceeding has essentially sat at the FCC ever since, until it began to get some renewed interest in connection with the Aereo case.
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The Supreme Court decision in the Aereo case seemed to be the end of the line for the service that was retransmitting television stations signals without consent, as it found that the broadcasters were entitled to an injunction to force Aereo to cease the public performance of their signals without consent.  In fact, Aereo itself seemed to think so too, shutting off its service soon after the decision.  But in a move that was surprising to some, Aereo has apparently not thrown in the towel, and it is now back in Court with a two-pronged argument as to why its service is still viable (see its letter to the Court here).  First, it argues that, as the Supreme Court seemed to think that Aereo acted like a cable system and should be treated in the same manner as a cable system for purposes of determining whether its retransmission of a television stations signal was a public performance, it might as well be treated like a cable system for all purposes, and thus it should be entitled to carry the signals of TV stations pursuant to the statutory license granted to cable systems by Section 111 of the Copyright Act.  Second, it argues that, even if it does not qualify for treatment as a cable system, it should nevertheless be able to retransmit television signals – just not in real time, as the Aereo contends that the Court decision only prevented simultaneous and near simultaneous retransmissions of the television stations’ signals.  Offering once again a fearless prediction – I doubt these arguments will help Aereo any more than did their arguments before the Supreme Court.

Admittedly, their argument that they qualify as a cable system under the Copyright Act has some appeal.  In fact, as we noted in our summary of the oral argument before the Supreme Court, the Justices even asked why the company did not qualify as a cable company.  Section 111 of the Copyright Act defines a cable system as follows:

A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.

That language is seemingly broad, covering not just what most of us think as a cable system (one that uses wires to transmit TV programming to the customer), as it talks expansively of “other communications channels” to deliver programming.  Of course, when satellite TV started, they were unsure of their status under this definition, and ended up getting a whole new section of the act to determine their ability to retransmit local TV signals to their subscribers.  But even if this section can be read expansively to cover Aereo, what does that get them?
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The FCC yesterday issued an order imposing a $2.25 Million fine on a set of companies that operated a system that retransmitted TV signals to households in large housing units in the Houston area.  The system had paid retransmission consent fees to the TV stations, then stopped doing so, claiming that it was changing so as to operate as a Master Antenna Television System (MATV).  MATV systems are exempt from paying retransmission consent fees under certain defined circumstances.  This exemption was adopted for apartment complexes and other large residential dwelling units to allow residents to receive over-the-air television so as to not force all of the residents to have an antenna in their own residential units, which might not be feasible or optimal for TV reception.  The problem in yesterday’s case, according to the FCC decision, was that this company did not in fact act as an MATV system, but instead continued to deliver its programming to the dwelling units by means of its fiber connection to a single headend, where TV programs were bundled with traditional cable network programming.  According to the decision, the system continued to transmit TV signals through its fiber network for as much as 208 days after the expiration of the retransmission consent agreements with the TV stations whose signals it was carrying.

FCC rules require that cable systems and other MVPDs (multichannel video programming distributors) receive the consent of TV stations before retransmitting their signals.  The exception for MATV systems is a limited one. It provides that the signals of TV stations be made available to the residents of the dwelling units that are served “without charge and at the subscribers (sic) option” and that the receiving device be either owned by the subscriber or building owner, or “available for their purchase upon the termination of service.”  The Commission further faulted the service for apparently having continued to deliver TV programming to subscribers by its fiber service from its headend, even after installing master antennas at the buildings in which the subscribers lived.  Simply having the antennas available was not enough to excuse the system from the retransmission consent obligations when the actual signals were sent by fiber. 
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As we wrote last month, the Commission has asked for public comment on whether an Internet delivered video programming service can qualify under the FCC rules and the Communications Act to be treated as a multichannel video programming distributor (an "MVPD").  While the FCC has in the past determined that an MVPD needs to have

As technology changes, the definitions in the FCC rules don’t always keep up.  In a public notice released last Friday, the FCC asked for public comment on what its definition of an "MVPD" – Multichannel Video Programming Distributor – means for purposes of its program access rules. These rules limit exclusive contracts for certain programming that