Online Video Distributors Renew Call for Cable Act Rewrite

Subcommittee Ranking Member Anna Eshoo, D-Calif., will express her concern about retransmission consent deals and broadband data caps, said an advance copy of her remarks. “Consumers continue to have limited options when it comes to finding devices with features equivalent to the cable company-issued set-top box,” she plans to say. “Second, consumers should not be held hostage when retransmission disputes break down ... and third, I'm concerned about the potential impact of data caps on the growth of the streaming video market.” Eshoo also plans to renew her call for a subcommittee hearing to examine the proposed deal between Verizon Wireless and SpectrumCo.

Dish Network Chairman Charlie Ergen plans to defend the company’s Hopper service, which permits consumers to skip over commercials and save programming indefinitely. The technology does “nothing more than improve upon existing, legally-accepted, and widely available technologies,” he plans to say (http://xrl.us/bncynp). Networks like Fox, NBC, ABC and CBS argue that the features violate copyright law and jeopardize the financial underpinning of broadcast television. Ergen plans to tell lawmakers that current rules on retransmission agreements are “outdated” and in need of an overhaul by Congress and the FCC. Ergen will also urge the FCC to finalize the rules that govern how satellite licenses can be used for terrestrial mobile broadband services.

Lawmakers should ignore the “threadbare, self-serving arguments from a handful of pay TV companies,” Hearst Television CEO and NAB representative David Barrett will say (http://xrl.us/bncyn7). He'll argue that it’s important to retain broadcasters’ rights to control the distribution of their signals and not allow new services to “expropriate broadcast signals at will.” He will also tell lawmakers to disregard the “factually unsupportable” attempts by multichannel video programming distributors to “characterize their attacks on retransmission consent as protecting the interests of consumers.” If lawmakers allow emerging services to evade retrans, the viability of TV stations will be lost and consumers will suffer, he will say.

Netflix General Counsel David Hyman will advocate regulatory reform and tell lawmakers to examine broadband usage caps and Internet Protocol interconnection with a “much more discerning eye.” He'll say (http://xrl.us/bncyn9) that the cable industry has both the means and the motivation to engage in anticompetitive behavior: “These platforms and networks should not be permitted to unfairly leverage their data delivery networks or content distribution relationships to stifle unaffiliated video providers.” Netflix has criticized AT&T, Comcast and Time Warner Cable for excluding some video transmitted by IP from their broadband data caps (CD May 11 p1).

NCTA President Michael Powell plans to deny claims that the cable industry is discriminating against online video providers, according to his testimony. “The exploding growth of online video usage undercuts any argument that cable is standing in the way of this business,” he will say (http://xrl.us/bncyof). Powell will also tell subcommittee members that it is time to re-examine outdated rules like must-carry, retrans and non-duplication rights. He gave a preview of his comments at the association Tuesday. (See separate report in this issue.)

Public Knowledge President Gigi Sohn will endorse legislation that rewrites the 1992 Cable Act. Congress should “prune away the needless overgrowth of older rules, like syndicated exclusivity, the sports blackout rule and the network non-duplication rule, that exist only to protect the business model of local broadcasting,” she'll say (http://xrl.us/bncyom). Bills like S-2008 and HR-3675 are “on the right track,” she'll say, but Congress should be careful to retain some ownership restrictions. Sohn will also tell lawmakers to “cautiously” reform other “outdated” rules like retrans and compulsory licensing.

Sky Angel CEO Robert Johnson will tell lawmakers to create a level playing field for new entrants in video distribution. The “anti-competitive tactics” of incumbent operators and the FCC’s failure to enforce program access rules has enabled the industry to discriminate against emerging competitors like Sky Angel, he plans to say (http://xrl.us/bncynt). The company has been embroiled in a program access dispute with Discovery Communications since 2010 that centers on the Cable Act’s definition of an MVPD. The regulatory process enacted in the law has been an “utter failure” for Sky Angel, its subscribers and the public interest, Johnson will say.