Little Common Ground Between OTTs, Broadcasters in FCC MVPD Definition Proceeding

A broader definition of multichannel video programming distribution to include some types of over-the-top video could be a boon for OTT operators looking to add local broadcast content to their offerings, or is a solution in search of a nonexistent problem, panelists said Tuesday at an FCBA panel. Such a reclassification is "putting a thumb on the scale way before it's necessary or appropriate," said 21st Century Fox Associate General Counsel Jared Sher. Minus the protections that come with MVPD categorization, some OTT providers "are going to be left 'under the bottom,'" said Jonathan Allen of Rini O'Neil.

Gigi Sohn, counselor to Chairman Tom Wheeler, last year named that definition change as one of Wheeler's top priorities (see 1506220023) though the NPRM now is seemingly at a standstill (see 1510230025). Wheeler in December said such a reclassification could still be part of some other video proceeding this year (see 1512170046).

With the online video market changing rapidly, one chief concern is "acting too quickly," said Brian Markwalter, CTA senior vice president-research and standards. "We need to be cautious about solving a problem when maybe there isn't one yet." While consumers have a general understanding of what OTT is, "We're still trying to figure out the legal definition," he said.

Without having a certain scale of business or market power, negotiating access can be difficult for many OTT operators, said Allen, who represents FilmOn X, one of the biggest backers of a broader MVPD umbrella (see 1510140075). "It's a question of balance -- recognizing the rights of copyright holders on one side, and the importance of being able to distribute valuable local broadcast programming to consumers."

Broadcast content "is available for negotiated purchase," Sher said. "Broadcasters have the same incentives as everybody else. All of it is available to over the top distributors who negotiate for it." Even without a statutory copyright license, the vast majority of broadcaster content is available for OTT viewing, he said.

FilmOn X is ready to negotiate for access rights, but it believes it also needs to see whether it has a right to a compulsory license under Section 111 of the Copyright Act like an MVPD, Allen said. "That's part of the challenge of getting access to programming." Even if programming is available via negotiation, "there are transaction costs associated with that," he said. The compulsory license regime also lets a qualifying MVPD take advantage of a streamlined process, Allen said.

Dish Network's Sling TV OTT service's reliance on the broadband pipe of ISPs such as Comcast and Time Warner Cable shows why the satellite company has been a strong supporter of open Internet rules, said Alison Minea, Dish senior counsel-regulatory affairs. Cable consolidations are leading to the danger that cable companies, as big broadband pipe owners, would feel increased motivation to slow or degrade OTT services like Sling, Minea said. Open Internet rules and conditions are tools that give some protection, she said. Regulators also need to look at data caps, she said. Dish has repeatedly objected to Charter Communications' planned purchases of Bright House Networks and TWC on the grounds of broadband market consolidation -- objections some see as its trying to lay the groundwork for broadband-centric conditions (see 1601050039).

Sling doesn't carry local channels today, though it has interest in that direction, Minea said. "It would take a lot of work, but its work that can be done in the current framework" without an FCC rule change, Sher said, pointing to CBS streaming service CBS All Access.