FCC Launches Effort to Help Online Video Providers Compete With Cable Guys
December 19, 2014, 2:21 PM PST
By Amy Schatz
ReCode.net
http://recode.net/2014/12/19/fcc-launches-effort-to-help-online-video-providers-compete-with-cable-guys/
Federal regulators released new proposed rules
<https://apps.fcc.gov/edocs_public/attachmatch/FCC-14-210A1.pdf> Friday
designed to make it easier for online video providers to get access to
must-have channels, a change which ultimately could provide some relief
for consumers tired of high cable bills.
The agency proposed
<https://apps.fcc.gov/edocs_public/attachmatch/DOC-331161A1.pdf>
broadening the current definition for what constitutes a pay-TV provider
— in technical jargon, a “multichannel video programming distributor” —
to also cover online video distributors.
The change would help companies like Dish Network, Verizon
Communications, Sony and other companies hoping to launch a pay-TV
service delivered over the Internet, instead of satellite or cable.
The change, while technical, is important
<http://recode.net/2014/10/28/fcc-kicks-off-push-to-regulate-internet-tv-services-like-cable/> because
it would give online video providers protection under rules designed to
prevent cable operators that own TV channels — such as Comcast*, which
owns NBCUniversal — from withholding must-have content from rivals. So,
in the case of Comcast, it has to offer NBC to a rival pay-TV service
like Dish.
It would also require local station owners to negotiate in good faith
with online video providers for permission to air local TV channels.
But while the proposal might make it a little easier for a company to
launch an online video competitor to Comcast, the relief could be
relatively modest.
In addition to making content available to rival distributors, the
proposal says a cable operator has to sell its programming to startups
at reasonable rates. But it doesn’t require programmers like Walt Disney
Co. (which owns ESPN) or Viacom (which owns MTV) to do the same since
they don’t own distribution systems. It also wouldn’t require these
content companies to offer their channels a la carte or at reduced prices.
“Our proposal will mean more alternatives for consumers beyond the
traditional cable or satellite bundle, including giving consumers more
options to buy the programming they want,” said FCC Chairman Tom Wheeler
in a statement.
Wheeler and the agency’s other two Democrats approved the proposed rules
last month and were somewhat reluctantly joined Thursday by the FCC’s
two Republican members, who have expressed some concerns about the FCC
extending regulation over online video providers.
TV station owners have been supportive
<http://apps.fcc.gov/ecfs/document/view?id=60000986617> of the idea,
mostly because it means that online video providers would be required to
pay fees to broadcasters to air their channels.
Cable operators haven’t been quite as thrilled
<http://apps.fcc.gov/ecfs/document/view?id=60000973316>, which isn’t
surprising since the proposal could open the doors to significantly more
competition by Dish or other online video providers. The National Cable
& Telecommunications Association said Friday that it doesn’t
believe that the proposal “can be squared with the plain language” of
the definition of a MVDP.
The FCC has been mulling
<http://apps.fcc.gov/ecfs/proceeding/view?z=cx0et&name=12-83> the issue
of what to do about online video providers for four years, when a
little-known provider called Sky Angel <http://www.skyangel.com> asked
the agency for help <http://apps.fcc.gov/ecfs/document/view?id=7021922692>.
The company’s service offers family and Christian programming but it had
problems adding Discovery Channel to its lineup. Sky Angel executives
complained
<http://articles.latimes.com/2012/jun/26/entertainment/la-et-ct-sky-angel-20120626> Discovery
didn’t want to be carried on the small company’s online video service
for fear of upsetting larger pay-TV providers.
Sky Angel shut down its online video service in January, citing
<http://apps.fcc.gov/ecfs/document/view?id=7521313509> its inability to
offer a competitive service because media companies wouldn’t sell
distribution rights to their channels.
The proposal also comes too late for Aereo, the broadcast TV startup
currently in bankruptcy protection
<http://recode.net/2014/11/21/codered-aereos-plan-b-bankruptcy/> after
the Supreme Court torpedoed
<http://recode.net/2014/06/25/the-supreme-court-rules-against-aereo/> its business.
But it could help other startups hoping to offer lower-cost, smaller
bundles of channels in the hope of taking subscribers away from Comcast
and other traditional pay-TV providers
The agency is expected to collect comments about its proposal through
next spring but a decision on rules isn’t expected before summer.
----------------------
Comcast owns NBCUniversal, which is a minority investor in Revere
Digital, *Re/code’s* parent company.
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