When linear OTT trailblazer Aereo was brought down by the broadcast industry, its Achilles heel proved to be copyright law. Over-the-top startup Telletopia is trying a new tactic to keep the lawyers off its back: getting around copyright and retransmission issues by operating as a nonprofit organization.
"Copyright law enables a nonprofit to retransmit broadcast content," said Gary Koerper, co-founder and CEO of Telletopia, in an interview with FierceOnlineVideo. "It's a very simple solution to a very complex problem."
Koerper said that unlike Aereo, which relied on its cloud DVR and antenna array to justify retransmitting broadcast signals, Telletopia will rely upon an exemption under a 111a5 license, which "specifically says you can't be a cable operator."
That doesn't mean that Telletopia is trying to get out of paying broadcasters for their content, however. The startup's co-founders, Koerper and Michael Librizzi, its CFO, said they want to work with broadcasters on a way to both legally retransmit their signals over the Internet and ensure that they get compensated.
Telletopia plans to begin operating in 2016 regardless of how the FCC votes on proposed changes to the regulations that define MVPDs (multichannel video programming distributors). If approved, over-the-top providers that aren't facilities-based would be able to get classification as MVPDs, allowing them to negotiate with broadcasters to retransmit their signals.
However, Koerper said, as a nonprofit Telletopia would be able to stream linear broadcast video no matter what. The California-based company is registered as a 501(c)(4) organization, which makes it exempt from compulsory license laws regarding retransmission of broadcast content. A favorable ruling on MVPD classification would just make retrans negotiations easier, he said. "The FCC vote is important because it makes it easier for us to pay for [content]."
A Comcast veteran, Koerper said the idea for Telletopia came into being two or three years ago when he was reading through a thousand pages of copyright code as a senior executive for the cable operator. One thing that stood out was that elements of the Copyright Act of 1976, which were developed to ensure that viewers could access broadcast television.
"When the exemption was created in the 70s, there wasn't any of this," Koerper said, indicating the growth of the Internet and over-the-top video. "The Copyright Act was debated for a decade. But [the 111a5 exemption] was developed [to make sure] consumers got easy access to broadcast TV."
For Telletopia, "There's an explicit purpose here. Getting more broadcasts to more eyeballs was the reason, not a workaround," he said.
However, Koerper said, monetizing linear OTT content is also on the company's priority list as it begins beta-testing its (currently browser-based) streaming solution.
"Aereo didn't have a good way to monetize local broadcast [for both itself and the broadcasters]. But now it's easy to build a very cost-effective solution [that benefits both sides]," Koerper said. "The existing regulatory structure allows us to solve the problem."
Both Librizzi and Koerper are confident that broadcasters will work with them, especially local stations that want an easier path to OTT.
"We've spoken to probably 10 of the top 15 local station groups. I'd say every one of them is supportive of this," said Librizzi. "They're all in support of the FCC [MVPD] ruling, because this is their path to the Internet."
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