Draft OTT NPRM Hasn’t Been Shared With Eighth-Floor Offices, Officials Say

A draft rulemaking notice on broadening the definition of a multichannel video programming distributor to include certain types of over-the-top video hasn’t been shared with most eighth-floor commissioners’ offices and won’t necessarily go on circulation, an FCC official and officials in several eighth-floor offices told us Tuesday. The eighth-floor officials said they had received no information about the draft NPRM. Calling the item “a proposal going around” is “a bit of an overstatement,” Chairman Tom Wheeler said at a news conference after Tuesday’s FCC meeting. “I'm not ready to plant the flag,” he said.

But the commission issued a public notice Tuesday changing the ex-parte status from “restricted” to “permit-but-disclose” of docket 12-83, which is on the FCC’s definition of the term MVPD and a program access complaint filed by OTT video provider Sky Angel against Discovery Communications. “In order to ensure broad public participation this matter, we believe it is appropriate to change the ex parte status of this proceeding,” the PN said. An FCC official confirmed that the change in status is related to the NPRM, but said the change isn’t an indication that the item will be circulated. The aspect of the proceeding associated with Sky Angel’s program access complaint remains restricted, and commenters “shall not” discuss the merits of the complaints in their filings, the notice said.

The change in status for the docket likely means the commission wants to incorporate the comments that had already been entered in the proceeding into its consideration of the draft NPRM, several broadcast attorneys told us. The comment period in the proceeding closed in 2012, and included comments from cable operators opposing a broadening of the definition of MVPDs and comments from some direct broadcast satellite companies and online video companies supporting a broader definition that would include online networks that provide linear video programming. Such networks are also the focus of the draft NPRM, FCC officials told us.

The issue of the definition of an MVPD was raised by Sky Angel’s program access challenge against Discovery Communications, over its carriage of Discovery on its FAVE-TV OTT video service. The Media Bureau never ruled definitively on the matter, concluding only that Sky Angel did not seem likely to win its case on the merits, said Holland & Knight broadcast attorney Leighton Brown, who represents Sky Angel. “The Media Bureau never tentatively concluded anything,” he said. A change in the definition of MVPDs to include OTT linear video would put a lot of pressure on Discovery regarding Sky Angel’s complaint, Brown said. It’s not clear how Sky Angel would react -- it announced to the FCC that it was suspending its video business in June (CD June 16 p14). Brown said he viewed the change in the proceeding’s status and possible NPRM as positives, but said it could simply lead to the FCC accepting comments and then not acting, as has happened before. “It’s very frustrating,” he said.

It’s not clear why the FCC would take up the matter of the status of OTT video now, several industry officials told us. One theory advanced by several broadcast attorneys is that the matter could be connected to Aereo’s attempts in U.S. District Court in Manhattan to have itself treated as an MVPD by the U.S. Copyright Office. However, an FCC change in the definition of MVPD wouldn’t necessarily accomplish Aereo’s goals, Fletcher Heald copyright attorney Kevin Goldberg told us. Goldberg is not involved in Aereo’s case. The streaming TV service would need the Copyright Office to change the way it defines Aereo as well, he said.

An FCC rule change treating linear OTT companies like MVPDs would help Dish, Sony and other companies, but might allow broadcasters to charge them more for retransmission consent, said Guggenheim Partners analyst Paul Gallant in an email to investors. If such a rule were approved, it could lead to pressure on the FCC to “reduce regulation of cable operators to match whatever deal the FCC gives OTT providers,” he said. “Some legislators may urge the FCC not to act while Congress considers pay TV legislation in 2015-16,” he said. The rule change could also make the Comcast/TWC deal more attractive, because it would allow the FCC to impose pro-OTT merger conditions, he said.