Telletopia, a nonprofit formed to convince the FCC and broadcasters to allow it to stream linear broadcast video over the internet, has formed the TV Neutrality Alliance with eight other OTT and smaller broadcast companies. The goal is to create a level playing field in multichannel video programming -- particularly, getting the FCC back on track toward classifying OTT providers as MVPDs.
Gary Koerper, CEO and co-founder of Telletopia, told FierceOnlineVideo that TV neutrality is "a really good parallel to internet neutrality" in that, while net neutrality deals with equanimity in the way data is treated as it travels over various networks, TV neutrality demands equal treatment among companies when it comes to access and retransmission rights for local broadcasts. That includes broadcast affiliates like ABC, CBS or NBC stations, which have yet to make an appearance on any linear OTT distribution service like Sling TV.
BiggyTV, BitTorrent, Camino Real Communications, Cocola Broadcasting Companies, Cooper Communications, Pi Omni-Media LLC, Pluto TV, Telletopia and Ventura Broadcasting Company are founding members of the TV Neutrality Alliance.
Currently, U.S. consumers have two main options to watch linear local affiliate broadcasts: through a pay-TV provider, or via over-the-air (OTA) antenna. Online, their choices are limited and fragmented -- viewers can pick up local news broadcasts by streaming over the affiliate station's website or installing an app called NewsON; they can pay $6 a month to watch CBS All Access, which geofences its local content to the subscriber's indicated home area; or they can watch limited on-demand offerings from some of the major broadcasters' TV Everywhere apps, like Watch ABC.
However, local affiliates carry not just area news but major sports and other programming that makes up "nearly 50 percent of what Americans watch. And that gravitational force is so important to not just businesses but to the local consumer," Koerper said. "So TV neutrality and the alliance behind it is just trying to say look, we need an open framework that allows competition to be an MVPD and to carry local broadcast."
The FCC's progress on the MVPD (or OVD, online video distributor) issue, Koerper contends, is currently hamstrung by two industries: the broadcasters, who want to ensure their copyright and licensing structure is not threatened; and the technology industry, which is afraid that regulation would stifle innovation in the OTT space. He agrees with their concerns. "The last thing the FCC should do is step in and start regulating [Silicon Valley]," Koerper said.
"So the proposal that we have … is solving that problem. It allows competition in the MVPD space, to carry broadcast cable nets. And it protects the Silicon Valley OTT players from being regulated by the FCC," he said.
The TV Neutrality Alliance's solution, he said, is pretty simple, and is based on existing forbearance rules created during the advent of DBS services like Dish Network and DirecTV. "A lot of what was brought up was, you can't opt in or opt out because being an MVPD or an OPD, it's a statutory definition, it's black and white. So the way we define it is, if you carry multiple channels of pre-programmed live video, then you're an MVPD, period, end of story. However, if you're not retransmitting local broadcast, then you don't have to worry about retransmission consent."
That would allow SVOD services like Netflix (NASDAQ: NFLX) or AVOD services like Hulu, for example, to continue doing business as usual. Linear OTT services, on the other hand, would have to think hard about whether they want to go the MVPD route or stream other types of content besides live local television.
Koerper says the proposal is a good compromise. "The ruling that we're proposing still protects broadcasters' right to retransmission consent. They get the control; they get paid. This is not disrupting anyone's business; this is moving that business model over to the internet. It's just the way that the rules are constructed, that can't happen today."
Telletopia itself, which was formed last fall, has not yet launched its linear streaming service. The premise behind Telletopia was to form it as a nonprofit organization, enabling it to retransmit broadcast signals under a 111a5 license exempting it from compulsory licensing rules. Doing so would specifically prevent the company from becoming a cable operator, however.
So in the meantime, Telletopia is concentrating on building its platform, the product and its services in anticipation of a launch.
The company also wants to work directly with broadcasters on the OTT retrans problem, rather than simply finding a singular way around existing regulations. Hence, the formation of the alliance.
"It's still incredibly scary, because it's change," Koerper said. "That's why we've been working really hard with both the regulatory side and the internet folks to find that compromise because that will always be required to move the industry forward."
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