FCC Denies Standstill Request in Over-the-Top Program Access Case

The Media Bureau denied a request by Sky Angel that the FCC let it keep carrying some Discovery Communications networks while its program-access complaint is considered. At the center of the complaint is the question of whether Sky Angel, which distributes pay-TV programming online, qualifies as a multichannel video programming distributor under federal rules.

The complainant has so far failed to show that it’s an MVPD, the Media Bureau said in an order released late Wednesday. “Sky Angel makes no attempt to describe whether and how it offers multiple ‘channels’ of video programming,” it said. “It failed to address the definitions of that term in the Act and the Commission’s rules, which appear to include a transmission path as a necessary element of a ‘channel.'” Sky Angel could still prove its case during in the context of the larger complaint, the order said. “Our decision to deny Sky Angel’s standstill petition should not be read to state or imply that the Commission, or the Bureau acting on delegated authority, will ultimately conclude, in resolving the underlying complaint, that Sky Angel does not meet the definition of” a multichannel video programming distributor.

Sky Angel isn’t an MVPD company under federal rules, Discovery responded to the complaint. “Sky Angel offers no evidence that it is an MVPD and freely admits it does not comply with MVPD obligations in its daily operations,” the programmer said. Discovery said it made a distribution agreement with Sky Angel in 2007, but it was misled and tried to get out of the agreement in January 2010 when it learned that Sky Angel’s service would not be “restricted to delivering video content to television sets in subscribers’ homes."

"Had anyone from Sky Angel ever advised of the transportable, multi-location nature of its service, Discovery would have immediately ceased discussions for the distribution of the programming networks,” the programmer said. “The belief that Internet distribution would not be a strong business model for Discovery is held by all levels of Discovery leadership."

Sky Angel’s system uses a special set-top box and back-end technology from NeuLion, the distributor said in its complaint, filed in March. It said Discovery’s sudden decision to terminate the affiliation agreement because it was “uncomfortable” with Sky Angel’s distribution system shouldn’t be allowed.

Sky Angel isn’t the first online distributor to invoke the FCC’s program access rules. Virtual Digital Cable tried the same tactic in 2007 seeking to carry some Time Warner programming. VDC has since gone out of business (CD May 27/08 p6).