The FCC's five commissioners have all approved a rulemaking proposal that could make it possible for over-the-top providers with services similar to FilmOn or Aereo to be classified as multichannel video program distributors (MVPDs).
Three Democratic commissioners voted "yes" on the proposal, while the two Republican commissioners concurred, reported Multichannel News' John Eggerton.
"In essence the vote launches the process of figuring out how to treat online video services that emulate traditional ones--linear day and date channel lineups," Eggerton wrote.
FCC Chairman Tom Wheeler called the rulemaking a way to "break that bottleneck" of "big company control" over programming in a statement released alongside the approved NPRM.
"With this Notice of Proposed Rulemaking, the Commission moves to update the Commission's rules to give video providers who operate over the Internet--or any other method of transmission--the same access to programming that cable and satellite operators have," he said.
"…More specifically, we propose to update our interpretation of the definition of a multichannel video programming distributor (MVPD) to make it technology-neutral. Video is no longer tied to a certain transmission technology, so our interpretation of MVPD should not be tied to transmission facilities. Under our proposal, any providers that make multiple linear streams of video programming available for purchase would be considered MVPDs, regardless of the technology used to deliver the programming."
A lengthy comment period is expected, and some commissioners still have concerns about the requirements needed for some online video companies to be classified as MVPDs--particularly Ajit Pai, who said in his comments that while it was time to resolve the question around whether Internet companies could be virtual pay-TV providers, some caution is warranted.
"In evolving markets like these, the government should be hesitant to extend the outdated regulations and classifications of old," he said. "It's for this reason that I can't vote to approve this Notice of Proposed Rulemaking. In my view, the Commission's fundamental proposal--that certain Internet-based distributors of video programming should be regulated as multichannel video programming distributors (MVPDs), a mouthful of a term older than Internet video itself--is premature. And the legal analysis contained in the Notice is heavily slanted to support that result."
Commissioner Michael O'Rielly called the NPRM "puzzling," and said that he was not likely to support an order based on the central premise of the proposal.
"While I can appreciate that the Commission may be trying to be forward looking, this item misses the mark," he said. "The Internet--and online video in particular--has grown to where it is today outside of our regulatory clutches, and the FCC trying to jump into this space now, especially without clear direction provided by the Congress, is highly questionable. As a government agency with little to no authority over the Internet, the best thing that the Commission can do is not get in the way."
The move was good news for linear OTT provider FilmOn, which has battled broadcasters for the right to stream their signals to its users for six years.
"Mr. Wheeler and the Commissioners at the FCC have taken a brave and modernist approach in spite of the wishes of a monopolistic few," the company said in a statement to FierceOnlineVideo. "What they have done is embrace the rights and freedoms of the American people as the priority."
Aereo's Chet Kanojia took a break from defending against broadcasters' latest attempt to put the boot in to the now-defunct service to applaud the move, too. "We know that when our laws and regulations don't keep pace with technology, consumers are the ones who lose out," he said in a statement released to the media. "Even though Aereo won't have an opportunity to compete in this new world, having a clear set of rules for online linear video distributors ensures that we'll have a robust video marketplace for decades to come."
Analyst Craig Moffett, on the other hand, doesn't see that new rules around MVPD classification would necessarily change the industry. That's "because it is mostly about access to the programming of vertically integrated companies, and one of the biggest is already subject to them," another Multichannel News article said. That company is Comcast (NASDAQ: CMCSA), which already has to make its programming available to OTT competitors according to conditions of its merger deal with NBCUniversal.
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