Divisions on How to Define ‘MVPD’ Pervade Media Bureau Notice Comments

Coalitions that represent Internet companies agreed, expressing worry that a broader definition would bring unwanted regulation to their members. But TV station owners, TV writers, public interest groups, DirecTV and a handful of fledgling Internet video distributors all urged the commission to take a broader and common sense approach to defining those terms.

The comments may provide the commission enough of an argument to avoid the writ of mandamus Sky Angel has sought from a federal appeals court that would compel it to act on the complaint. Sky Angel’s still-open 2010 program access complaint against Discovery Communications was the impetus for the bureau’s public notice. Even if the court issues such a writ, the easiest course for the commission to take would be to deny Sky Angel’s complaint, said Steve Effros, a cable industry consultant. “I don’t think Sky Angel gets anything out of this, but what it has done is forced the commission’s hand to say that it has to start dealing with this issue,” he said. “Whether the commission can deal with the issue itself is a more complicated question.” Some commenters suggested only congress can resolve some of the questions raised in the public notice the bureau issued.

Cable operators opposed a looser reading of the terms. “Expanding the definition of MVPD to include distributors of video content over the internet ... would be inconsistent with the statute and would significantly increase the regulatory burdens imposed on nearly every party in this space,” Comcast said (http://xrl.us/bm74nj). Moreover, the full commission, or even Congress may have to settle the matter, not the bureau, the American Cable Association said (http://xrl.us/bm75uw). “Such a wide-sweeping decision to reverse settled interpretations ... is properly left to the Commission through an industry-wide rulemaking,” it said. “If after conducting such an examination, inclusion of OVDs [Online Video Distributors] under the ambit of the term ‘MVPD’ is unsupported by the language of the Act and its legislative history, as appears to be the case, then the matter properly becomes one for decision by Congress,” it said.

But the legislative history supports a looser interpretation, others in the docket said. “Congress recognized that it could not foresee the future of video distribution, including which technologies could constrain cable’s monopolistic tendencies,” said Sky Angel (http://xrl.us/bm75vv). Services that look and function like a traditional MVPD should be treated like one, said Syncback (http://xrl.us/bm75v7). But video distributors that don’t offer the real-time services that traditional pay-TV distributors are known for shouldn’t be saddled with new regulation, it said. “It would be nonsensical to require a nationwide or globally available on-demand/nonreal-time Internet video service to adhere to regulations designed for real-time MVPD services,” it said. Syncback, along with Sky Angel, were two of three online video distributors to individually file comments in the docket. The other was M3X Media.

Groups representing other Internet companies warned the bureau it shouldn’t expand its interpretation of terms. “Given that many OVDs are small, start-up companies, requiring compliance with MVPD rules, regulations and requirements that were originally designed to address legacy, facilities-based multichannel video distribution ... will likely make it difficult, if not impossible for OVD start-ups to survive and continue to flourish,” said the Computer and Communications Industry Association, (http://xrl.us/bm77ge). Its members include Microsoft, Facebook, Google, Yahoo, Dish, Sprint and AMD. “Requiring these start-ups to invest their time and resources in unnecessary compliance, rather than innovation and development of new products and technologies, will chill investment and growth in this dynamic and vibrant sector of the economy,” it said. Likewise the Open Internet Coalition, which counts CCIA, Google, Twitter, Netflix, Facebook, and IAC as supporters, also argued against extending the definitions to cover online distributors (http://xrl.us/bm77vz). “Subjecting OVDs to legacy regulations intended for facilities-based MVPDs is unwarranted and poses significant risk to this growing, consumer-friendly distribution method,” it said.

But TV station operators largely supported the idea of extending the definitions to the nascent online video distribution sector. “A contrary definition of MVPD that does not encompass Internet-based distributors of video programming would be vastly under-inclusive and could have dire implications for television broadcasters and the important public interest they serve,” said affiliates of the ABC, CBS and NBC networks (http://xrl.us/bm77v7). Whether the online distributor controls the transmission path or facilities doesn’t matter to consumers but the definition is very important to broadcasters, Saga Communications said. “Television stations charge MVPDs retransmission fees for the right to carry their stations,” it said. (http://xrl.us/bm77wm). “Without these fees, local programming would greatly suffer or be eliminated from the programming provided by television stations,” it said.

If the commission does decide to address the definitions, it should do it in a broader rulemaking, AT&T said (http://xrl.us/bm77wq). “In order to retain the ability to address these issues in that context, the Commission thus should endeavor to resolve this proceeding on as narrow grounds as possible,” it said. “But whatever course the Commission pursue, it need not and should not determine whether an entity is an ‘MVPD’ based on the narrow definition of the term ‘channel’ in the Cable Act,” it said. “It should broadly construe that term and phrase to encompass multiple programming networks,” it said.

DirecTV took a similar view (http://xrl.us/bm77wy). The commission should interpret the terms “broadly and flexibly, to capture the full spectrum of entities competing to provide video programming networks to subscribers,” it said. “Adopting this approach will bring certain emerging categories of entities, including some online video distributors, within the ambit of the MVPD definition,” it said. But it would be relatively few entities, and therefore pose few burdens on “those obligated by rule to deal with them, such as cable-affiliated programmers and broadcasters,” it said.