On October 28, 2014, Federal Communications Commission (“FCC”) Chairman Tom Wheeler announced that he is proposing a Notice of Proposed Rulemaking (“NPRM”) to extend legacy cable program access and broadcast retransmission rights to the over-the-top (“OTT”) video market. Chairman Wheeler explained that such regulations are necessary to ensure the availability of cable and television broadcast programming to OTT video providers. By adopting these proposed regulations, the Chairman seeks to enhance consumer choice and competition in the video market.
Entities providing OTT video programming or otherwise interested in the FCC’s proceeding should keep a close watch on the FCC’s proceeding regarding multichannel video programming distributors (“MVPDs”) and evaluate the impact of the proposed rules on their businesses.
As reported, the NPRM will propose granting program access and broadcast retransmission rights to OTT providers of linear video programming (i.e. scheduled programs, like those aired by broadcast television stations) by expanding the FCC’s definition of MVPDs, which are entitled to such rights under the FCC’s rules. The NPRM would exclude, from the definition of MVPD, the OTT providers of non-linear video programming (i.e. non-scheduled or on-demand programs, like those offered by Amazon Prime or Netflix).
Much of the details of the NPRM, however, are still unknown. For instance, it is unclear whether OTT providers would be subject to the new definition automatically or whether they would have to apply or otherwise opt in for such rights. Similarly, it is unclear what regulatory obligations would apply to OTT video providers classified as MVPDs under the proposed rules. For example, would they be subject to existing Equal Employment Opportunity requirements or the requirements regarding the competitive availability of cable navigation devices (e.g, set-top boxes)? While some OTT video providers would welcome the opportunity to be classified as MVPDs, others may find the regulatory classification problematic.
As an additional complication, under U.S. copyright law, only entities eligible for a “compulsory copyright license” may lawfully retransmit television broadcast signals. The U.S. Copyright Office has interpreted narrowly the scope of entities eligible for such licenses and, indeed, rejected the claim of one OTT video provider, Aereo, Inc., earlier this year. Providers seeking to take advantage of any new retransmission consent rights created by the FCC will need to be careful that they do not run afoul of U.S. copyright laws.