FCC proposes updated MVPD definition
October 29, 2014
By Colin Mann
Tom Wheeler, FCC Chairman, says the industry has passed from an era where it was necessary to build a purpose-specific pathway to deliver video, and accordingly, the Commission is putting forth proposals to update FCC rules to recognise this new reality and, as a result, expand competition and consumer choice, a move that could benefit OTT players such as Aereo and FilmOn.
Writing in the Official FCC Blog on Tech Transitions, Video, and the Future, Wheeler says that consumers have long complained about how their cable service forces them to buy channels they never watch. “The move of video onto the Internet can do something about that frustration – but first Internet video services need access to the programmes. Today the FCC takes the first step to open access to cable programmes as well as local television. The result should be to give consumers more alternatives from which to choose so they can buy the programmes they want,” he suggests.
He notes that in 1992, Congress realised that the then-nascent satellite industry would have a hard time competing because much cable programming was owned by cable companies who frequently kept it from competitors. Congress mandated access to cable channels for satellite services, and competition flourished. “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. What could these over-the-top video providers (OTTs) supply to consumers? Many different kinds of multichannel video packages designed for different tastes and preferences. A better ability for a consumer to order the channels he or she wants to watch,” he hints.
He suggests the mantra ‘Competition, Competition, Competition’ fits perfectly with consumers’ desires for video choices. “That’s why I’m asking my fellow Commissioners to update video competition rules so our rules won’t act as a barrier to this kind of innovation. Specifically, I am asking the Commission to start a rulemaking proceeding in which we would modernise our interpretation of the term ‘multichannel video programming distributor’ (MVPD) so that it is technology-neutral. The result of this technical adjustment will be to give MVPDs that use the Internet (or any other method of transmission) the same access to programming owned by cable operators and the same ability to negotiate to carry broadcast TV stations that Congress gave to satellite systems in order to ensure competitive video markets,” he advises.
According to Wheeler, 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. Twenty-first century consumers shouldn’t be shackled to rules that only recognise 20th century technology,” he states.
He notes that much of the focus of discussion about technology transitions has been on telecommunications, but video is transitioning too. “Over-the-air TV has already moved from analogue to digital transmission. And cable systems – already the dominant providers of high speed broadband – are moving their traditional services to IP-based delivery. This proposal recognises that a cable system would continue to be regulated as a cable system, even if it migrates to IP delivery,” he confirms, suggesting that by making its rules technology neutral, the Commission can encourage both new video providers and incumbent cable operators to take advantage of the benefits of IP transmission, boosting competition.
Wheeler says that in its Open Internet proceeding, the FCC sought to assure open access to broadband delivery. “In this proceeding, we will address access to programming for those taking advantage of that open access. These new business models can bring new choices and advantages to consumers,” he asserts.
According to Wheeler, an updated definition of MVPD would permit a new broadband competitor to offer customers the ability to reach a variety of OTT video packages without necessarily having to enter the video business itself.
“We have passed from an era where it was necessary to build a purpose-specific pathway to deliver video. The innovation of Internet Protocol (IP) has freed video from these closed pathways and single-purpose devices. The proposal put forth today will update FCC rules to recognise this new reality and, as a result, expand competition and consumer choice,” he concludes.