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.