Aereo, FilmOn hopes rise again as FCC moves to redefine MVPDs

The FCC said it will look at updating rules that regulate cable systems, a move that could allow over-the-top providers to more easily deliver broadcast television over the Internet, rather than over the air or through closed cable systems. Chairman Tom Wheeler circulated a Notice of Proposed Rulemaking on Tuesday that says MVPDs, like other forms of communication, should be "technology-neutral."

The FCC's new NPRM is raising the hopes of OTT providers like Aereo and FilmOn, which have struggled to convince the courts--and now regulators--that Internet-based video is a medium that's just as viable as cable and should have the same rights to license content as satellite and cable operators do.

In a blog post announcing the proposal, Wheeler cited Congress' 1992 decision that gave satellite services such as DirecTV access to cable channels. "Today I am proposing to extend the same concept to the providers of linear, Internet-based services; to encourage new video alternatives by opening up access to content previously locked on cable channels," Wheeler wrote.

Video competition rules shouldn't be a barrier to innovation, he wrote in the post.

"A key component of rules that spur competition is assuring the FCC's rules are technology-neutral. That's why the definition of an MVPD should turn on the services that a provider offers, not on how those services reach viewers," he said.

OTT video's ability to innovate almost as fast as consumer demand rises has been key to its meteoric growth--and traditional broadcasters and cable providers have been gnashing their teeth over it. But Wheeler emphasized that the changes would be designed to protect consumers, and give them the ability to order the channels they want to watch.

Both FilmOn and Aereo are, understandably, happy with the move.

"I applaud Tom Wheeler's determination to stand by American values and update FCC rules to promote competition and innovation. The inevitable is happening and consumers will win," FilmOn founder Alki David said in a statement to FierceOnlineVideo.

Aereo CEO and Founder Chet Kanojia released a statement applauding Wheeler for the move, calling it an "important step in the right direction for consumers."

"The way people consume television is rapidly changing and our laws and regulations have not kept pace. By clarifying these rules, the FCC is taking a real and meaningful step forward for competition in the video market. The FCC recognizes that when competition flourishes, consumers win," Kanojia added.

While Aereo is understandably pleased with the FCC's latest step, it's a long way yet to a storybook ending for the embattled OTT service. The company's live TV operations were enjoined by a federal court on Oct. 24, making it impossible, currently, for the company to resume streaming broadcast signals. Even if Aereo is eventually allowed to license broadcast content for retransmission, it will now be facing a growing number of competing VOD services--many from broadcasters themselves.

For instance, CBS--a staunch opponent of Aereo--announced it will launch a $5.99 per month SVOD service.

FilmOn, meanwhile, intends to jump back in with both feet, should the rulemaking allow it. The company told the FCC in an Oct. 17 ex parte filing that it intends to "commence retransmission of local television broadcasts to authenticated subscribers in local markets consistent with FCC rules applicable to Multichannel Video Programming Distributors."

For more:
- see this FCC blog post
- and Kanojia's statement
Re/code has this story

Related articles:
FCC officially proposes pay-TV status for linear OTT services
Federal court enjoins Aereo's live TV operations but leaves open cloud-DVR option
Aereo urges FCC to expand MVPD definition, retrans rules
Rumor mill: Aereo-like platforms may be given program licensing rights by FCC
Dish sets OTT targets: 'Cord cutters, cord nevers and cord haters'

Updated Oct. 29 to include statements from FilmOn.