Reply comments filed late last week in response to the FCC’s rulemaking proposal to redefine online video distributors (OVDs) as multichannel video program distributors (MVPDs) highlighted strong differences of opinion on the topic. Broadcast network affiliates and other parties came out in support of the rulemaking notice, while cable industry representatives filed comments opposing the FCC’s plan.
Facilities-based providers of video service, such as cable and satellite companies, are currently classified as MVPDs by the FCC. The notice of proposed rulemaking (NPRM), issued last December, would extend the MVPD definition to distributors of “multiple linear video programming streams, including Internet-based services.” In adopting the NPRM, the FCC concluded tentatively that classifying OVDs as MVPDs would “ensure that web-based, video programming services will have access to the content they need to compete with established providers. The FCC further reasoned that the proposed rules “would ensure that incumbent providers will continue to be subject to the pro-competitive regulations that apply to MVPDs as they transition their services to Internet protocol delivery.”
Affiliate associations of the major television networks urged the FCC in a joint filing to proceed with reclassification and to subject linear OVDs to retransmission consent and other rules that apply to MVPDs, with certain refinements that recognize the unique characteristics of OVDs. The affiliates recommended, among other things, that OVDs be required to demonstrate the ability to (1) retransmit programming securely to prevent unauthorized distribution, (2) retransmit signals in their entirety, and (3) authenticate subscribers “so that only authorized customers are able to receive the signal.”
Verizon Communications, the Consumer Federation of America, and the Alliance for Community Media also endorsed the rulemaking proposal, as did the National Association of Broadcasters, which maintained that reclassification would promote “regulatory certainty and ensure that congressional and Commission policy goals will be met.”
The National Cable & Telecommunications Association (NCTA) argued, however, that the FCC lacks the authority to modify the 1992 Cable Act definition of an MVPD, describing the FCC’s notice as a bid “to apply an arsenal of regulation . . . purportedly to promote competition in the already competitive and well-functioning online video marketplace.” Along a similar vein, AT&T agreed with NCTA’s contention that the FCC’s plan is “unlawful” as well as “premature.” Despite characterizing the FCC’s goal of promoting fair access to programming as “laudable,” the American Cable Association advised the agency that “the lack of any obvious marketplace problem demonstrated in the NPRM . . . counsels against it on public policy grounds.”
Amazon, meanwhile, maintained that reclassification is unnecessary as OVDs “are successfully meeting consumer demand for high-quality video content that is available instantly and on any number of devices.” As FilmOn X—an OVD that shut down its service in the wake of last year’s Supreme Court ruling in the Aereo case—rejected claims that reclassification would “create an artificial preference” for OVDs, the company advocated for a “light regulatory touch,” as a “variety of traditional MVPD regulations simply cannot apply to a provider that does not own or control the transmission path.”