Upfront: Bill would lift OTT companies to MVPD status
Sen. Jay Rockefeller is planning a bill that aims to give upstart online video services the chance to compete on an equal footing with classic MVPDs by guaranteeing their rights to content.
That includes content not only from classic cable TV networks and channels but also from broadcast networks.
Under Rockefeller’s bill, the Consumer Choice in Online Video Act, online video distributors can elect to be classified as non-facilities based MVPDs.
In addition to benefitting over-the-top (OTT) distributors like Netflix and Hulu, the bill also empowers companies like Aereo. The bill describes a service that rents antennas to subscribers, and it explicitly bars broadcasters from collecting retransmission consent fees from any company using that operating model.
The bill explicitly encourages online video distributors to offer channels on an a la carte basis.
In the words of the bill itself, the intent is to enable online video distributors “to disrupt the traditional multichannel video distribution market.” The bill directs the FCC to determine if any steps are necessary “to allow a non-facilities based multichannel video programming vendor to offer a subscriber greater choice over the video programming that is part of the subscriber’s service.” The bulk of the legislation opens the way for online video distributors to gain access to content that many of them have sought but thus far have rarely, if ever, been able to get.
In negotiating rights to programming, MVPDs will be barred from including any provision that serves as a substantial disincentive for the video programming vendor to sell its content to an online video distributor. MVPDs will be barred from engaging in any other practice that would provide such a disincentive. Retaliating against a programmer for granting such rights to a competitive service is explicitly barred.
MVPDs will be barred from making contract provisions that prevent a programmer from making content available through any products capable of hosting the video. (Think Roku box or Apple TV.) They will also be barred from contractually preventing any programmer from making its content available for free, should the programmer so choose.
The bill says broadcast stations would have to negotiate with online video distributors for carriage of their signals in local markets.
Online video distributors would be explicitly prohibited from offering any subscriber more than two signals from affiliates of the same broadcast network. Retransmission consent rules would apply. Online distributors will not be compelled to carry any local broadcaster’s signal, and they will be able to offer the broadcast channels on an a la carte basis. They will be exempt from any local franchise requirements.
Classic MVPDs are also leading ISPs, and the bill includes a number of provisions aimed at discouraging them from abusing their power.
They will not be able to use usage-based billing to deter the use of online video distributors.
ISPs will not be allowed to degrade or block traffic from online video distributors, nor improve the delivery of affiliates in an unreasonably discriminate manner. The FCC will have authority to judge what constitutes unreasonably discriminate behavior.
If an ISP were to move to adopt usage billing (which Time Warner Cable, Comcast, Mediacom, and many other service providers are experimenting with), the ISP would have to provide plain-language explanations of how it would be applied and what it would mean in terms of subscriber consumption. ISPs would have to provide their customers with tools they can use to monitor their usage, and furthermore notify each customer of their consumption to date in the middle of each billing cycle.
The bill explicitly gives the FCC the authority to create and monitor these rules, and to revise them as necessary to meet the goals of the bill.