Pay-TV, Broadcasters, Associations Disagree on Broadening MVPD Definition

Pay-TV providers, broadcasters and their associations don't agree on whether the term multichannel video programming distributor (MVPD) and its obligations should apply to over-the-top (OTT) video services, according to comments filed in docket 14-261 Tuesday. Though NAB said it supports extending MVPD rules to cover OTT services, it wants online video distributors (OVDs) to be bound by the must-carry and other rules that apply to current MVPDs. CCIA, DirecTV and others expressed concern that the MVPD designation would harm innovation in the OTT sphere, while NCTA opposed the definition change entirely. “That definition cannot be squared with how Congress defined the term in 1992, nor is it consistent with the policies Congress sought to achieve when it adopted rules conferring benefits and imposing obligations on MVPDs,” NCTA said.

The commission should take care in applying the MVPD designation to online video, CCIA said. “Imposing regulations that were developed in the last century on the wide range of companies that are currently expanding and investing in the flourishing on-line video market could stifle future innovation,” CCIA said. Most of the obstacles to OTT involve copyright, which is outside FCC control, DirecTV said. “The Commission should refrain from regulation and let online video technologies and business models more fully develop and compete,” CEA said. A joint filing from CBS, Disney and 21st Century Fox also asked the FCC not to take action.

The FCC risks “forcing” every online video service into the definition of MVPD, CCIA said. “By redefining MVPD, the Commission also risks the imposition of a static definition that could prevent future innovation and investment,” CCIA said. The FCC should make sure the new definition is narrowly applied only to linear online video services and maintain a “hands-off” approach, CCIA said.

Nearly all commenters said the definition change won't obviate the need of OTT providers to secure the rights to any broadcast content, and won't provide them with compulsory copyright licenses. Broadcasters and networks aren't necessarily able to offer individual licenses, DirecTV said. That could leave OTT in a “catch-22” with no access to licensed content, DirecTV said. This means extending MVPD status to OVDs would “do nothing to promote fair marketplace competition,” NCTA said.

Rules expanding the definition of an MVPD should include an enforcement mechanism “comparable to the program exclusivity rules for cable operators and unserved household restriction for DBS providers,” NAB said. Exclusivity rules are a “critical consideration” in maintaining localism, NAB said. The FCC appears to be leaning toward not applying the exclusivity rules to OTT MVPDs, the broadcast association said. If those rules are left out, the commission should make it clear that exclusivity rules would apply if the U.S. Copyright Office grants compulsory licenses to new MVPDs, something now-defunct online TV service Aereo actively sought. Enforcement of exclusivity rules mitigates the effect of compulsory licenses as “a government-granted subsidy for cable and DBS providers,” NAB said.

Retransmission consent rules should apply to the online MVPDs, NAB said. That approach “ensures that broadcasters, as Congress intended, will control the distribution of their signals and be able to negotiate for compensation,” NAB said. Retrans rights also provide benefits to consumers, such as being able to access broadcast content without switching platforms, NAB said. The FCC should set up standards requiring OVD companies to ensure that broadcast signals they want to retransmit are secured from piracy, accessed by OVD subscribers within the correct geographic market, and are of sufficient quality, NAB said. The lack of rights means that applying retransmission consent rules to OTTs may not accomplish anything, both NCTA and DirecTV said.

The FCC should err on the side of reducing regulations on legacy providers and OTT to put them on a level playing field, ITTA said. The FCC could alleviate the risk to OTT providers by allowing them to opt in to the MVPD designation, Verizon said.