FCC Has No Legal Standing To Regulate OTT, Commissioner Pai Says

The FCC has no place in regulating online video distributors, Commissioner Ajit Pai said Friday. "Even though online video has thrived precisely because of the government's hands-off approach," some in government "view the Internet as too important not to regulate," Pai said in a Churchill Club address that later was posted online. The FCC is considering reinterpreting the definition of multichannel video programing distributors to include over-the-top (OTT) providers of multiple streams of prescheduled, linear video programming -- a move that faces pushback from numerous media companies as well (see 1507140011). While backers of the move say such regulation would assist online video distributors (OVDs), "the benefits promised are illusory," in large part because the Copyright Office does not consider OTT providers as cable systems and thus have no legal right to a compulsory copyright license to show broadcast programming, Pai said. "The FCC's regulations would likely compel retransmission consent negotiations that lead to the carriage of little to no programming." While nothing stops broadcast programmers and OVDs from negotiating their own carriage and licensing agreements, he said, the FCC has no legal ability to force such negotiations "because copyright law stands in their way." Instead, Pai said, "It's all about increasing the FCC's authority -- about putting the FCC at the head of the digital table and bringing another industry within our reach." If the agency does in fact begin regulating only a certain segment of OTT operators, that almost surely will lead to the agency seeking to regulate other segments, Pai said. "I can even predict one of the arguments that will be made: How is it fair to regulate one type of online video provider but not another?"