FCC proposes unlocking of content bundles to drive OTT TV access
Joseph O'Halloran
| 29 October 2014
In what is an existential threat to the long-term viability of the country's pay-TV bundles, US regulator the FCC is proposing updates of its video competition rules to allow online access to previously locked programming.

Explaining the move in a blog post, FCC chairman Tom Wheeler said that the regulator was reacting to US consumers' long-standing complaints about how their cable service forces them to buy channels they never watch. Even though the chairman acknowledged that the growth of online video and over-the-top (OTT) services had improved that situation, such services still needed access to programming that has to date not been made available by the pay-TV provider.

Wheeler said that the time was now right for the FFC to act in opening access to cable programme as well as local television. The result, he asserted, should be to give consumers more alternatives from which to choose so they can buy the programme they want.

Outlining the basis of his reasoning, Wheeler said: "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 OTT 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. So-called linear channels, which offer the viewer a pre-scheduled line-up of programmes, have been the largely exclusive purview of over-the-air broadcasting, cable, and satellite TV. But these kinds of packages of programming are coming to the Web as well. "

In his statement, the FCC chairman noted the recent launches by both CBS and HBO of OTT services offering access to their content which hitherto had only been available as part of pay-TV bundles.

Wheeler added that he would ask the FCC to begin a rule-making proceeding in which it could modernise its interpretation of the term multichannel video programming distributor (MVPD) so that it would be technology-neutral. The technical adjustment would aim 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 the United States Congress gave to satellite systems in order to ensure competitive video markets. This definition has recently provided very contentious in law suits involving the Aereo and FilmOn services who have both sought MVPD status to continue to operate in the face of legal action from content companies.

"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," he explained. "Twenty-first century consumers shouldn't be shackled to rules that only recognise 20th century technology. 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."

Ultimately Wheeler insisted that by adopting his proposals there would be benefit to both consumers as well as OTT firm. He speculated that the new regulation my see the emergence of new OTT suppliers providing smaller or specialised packages of video programming, so consumers will be able to mix-and-match to suit their tastes. "Updating the definition of an MVPD will provide consumers with new choices. And perhaps consumers will not be forced to pay for channels they never watch," he concluded.