NCTA warns the FCC about reclassifying OTT
Michelle Clancy
| 31 October 2014
In a move that few will see as shocking, the US National Cable & Telecommunications Association (NCTA) is warning US TV and communications regulator the FFC not to give over-the-top (OTT) video providers status as multichannel video providers.

In a statement responding to FCC Chairman Tom Wheeler's proposal to define linear OTT providers as multichannel video programming distributors (MVPDs), putting them on parity with cable MSOs and satellite companies and thereby giving them access to local broadcast feeds, the industry group noted that, "in today's video marketplace, consumers are reaping the benefits of robust competition and an ever expanding menu of video options. Redefining what it means to be an MVPD raises profound questions about how government will extend regulation to Internet video services and how any would-be virtual MVPDs will meet their 'social compact' obligations."

The commission is considering extending its programme access rules to online providers that offer linear video streams, and allow them to negotiate retransmission deals with broadcasters.

The idea is to create a technology-neutral definition of an MVPD, thus eliminating the requirement of having a facilities-based transmission path in order to be guaranteed access to TV stations via must-carry rules and retransmission.

The change would have implications for the likes of, for instance, Aereo. It went to the Supreme Court in April to defend its right to exist in the face of copyright infringement suits from every major broadcaster — they argued that because the company broadcasts local feeds via the Internet without paying retransmission fees, it's essentially stealing their content. Aereo has counter-argued that because it provides dime-sized antennae to its subscribers — who pay $8 per month for access to a couple dozen channels — it constitutes an over-the-air, rabbit ears-based service, which is exempt from retrans fees. It has also argued that its content is delivered to a single cloud-based DVR device for one subscriber and can therefore not be categorised as a public broadcast service, subject to fees and regulations.

The Supreme Court sided with the broadcasters, after which Aereo tried to gain cableco status in order to gain access to programming — which the courts ultimately blocked. The FCC's reclassification of OTT providers as multichannel video providers would change the game for Aereo and its entire ilk.

But, "with so many unknowns, the FCC should take great care in any such examination so as to avoid creating new problems that would result in unintended consequences and would fail to honour principles of competitive neutrality among rival providers," NCTA said.