The Federal Communications Commission (FCC) is no longer sure just how to define a multichannel video programming distributor (MVPD), and its final decision on the matter could have major implications for Internet-based video services.
On Friday, the FCC announced a request for public comment on how to interpret the definition of an MVPD. The request follows a petition by faith-based video provider Sky Angel, which issued a complaint against Discovery Communications (Nasdaq: DISCA) back in March of 2010. Discovery had terminated its retransmission agreement with Sky Angel, and the video provider wanted the FCC to intercede on its behalf in the licensing dispute. The FCC wasn't willing to do so at the time because it couldn't verify Sky Angel's status as an MVPD deserving of certain program access considerations. However, it left open the door to re-evaluating Sky Angel's position in the future, and now the FCC is ready to examine Sky Angel's case further.
The primary question up for debate is whether an MVPD has to provide the means of transmission for video programming, or whether it can make a bundle of programming available without also selling access to the distribution network. Sky Angel falls squarely in the latter category, offering all of its programming over the Internet. However, it's not the only entity that could be impacted by the FCC's decision on the matter.
Several other service providers also provide video programming over the Internet, with Netflix (Nasdaq: NFLX) and Hulu among the most popular. If they are ultimately classified as MVPDs, they will be subject to both specific rights and requirements under the law. For example, MVPDs are allowed "to seek relief under the program access rules and the retransmission consent rules," much as Sky Angel has done. On the other hand, MPVDs are also obligated to abide by regulations such as the requirement to negotiate retransmission agreements in good faith, or provide close captioning services.
Netflix and Hulu might be ruled out of the MVPD category on other grounds, such as the fact that they provide different types of programming bundles from traditional cable operators. However, the line is a difficult one to draw. And what about Aereo, which delivers broadcast content, but also adds its own antenna arrays to the mix? Does that mechanism constitute a transmission path?
The FCC is asking for public comments by April 30, with reply comments due by May 30. In addition to interpretations of the term MVPD, the FCC is also asking for comment on how to interpret the term channel as it is used in the MVPD definition. A channel is described as follows:
"A 'channel' is defined as 'a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel (as television channel is defined by the Commission by regulation).' The Commission's regulations define a 'television channel' as 'a band of frequencies 6 MHz wide in the television broadcast band and designated either by number or by the extreme lower and upper frequencies.' The Commission's regulations also define a 'cable television channel' as a 'signaling path provided by a cable television system.' The Act defines 'video programming' as 'programming provided by, or generally considered comparable to programming provided by, a television broadcast station.'"
- download the FCC request for comment
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