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Federal Communications Commission FCC 14-210 |
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Before the |
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Federal Communications Commission |
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Washington, D.C. 20554 |
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In the Matter of |
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Promoting Innovation and Competition in the |
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Provision of Multichannel Video Programming |
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Distribution Services |
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MB Docket No. 14-261 |
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NOTICE OF PROPOSED RULEMAKING |
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Adopted: December 17, 2014 Released: December 19, 2014 |
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Comment Date: [30 days after date of publication in the Federal Register] |
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Reply Comment Date: [45 days after date of publication in the Federal Register] |
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By the Commission: Chairman Wheeler and Commissioners Clyburn and Rosenworcel issuing separate |
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statements; Commissioners Pai and O’Rielly concurring and issuing separate |
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statements. |
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TABLE OF CONTENTS |
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Heading Paragraph # |
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I. INTRODUCTION.................................................................................................................................. 1 |
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II. BACKGROUND.................................................................................................................................... 9 |
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III. DISCUSSION ...................................................................................................................................... 13 |
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A. Defining MVPD............................................................................................................................. 16 |
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1. Proposed “Linear Programming Interpretation” ..................................................................... 18 |
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2. Alternative “Transmission Path Interpretation” ...................................................................... 29 |
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B. Regulatory Implications of Alternative Interpretations................................................................. 33 |
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1. Application of MVPD-Specific Regulatory Privileges and Obligations to InternetBased |
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Distributors of Video Programming ............................................................................. 35 |
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a. General Privileges and Obligations .................................................................................. 36 |
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b. Specific Privileges and Obligations.................................................................................. 39 |
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(i) Privileges.................................................................................................................... 39 |
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(ii) Obligations................................................................................................................. 46 |
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2. Impact on Content Owners...................................................................................................... 65 |
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a. Broadcast Content............................................................................................................. 66 |
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b. Cable-Affiliated Content................................................................................................... 67 |
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c. Non-Broadcast, Non-Cable-Affiliated Content ................................................................ 70 |
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C. Regulatory Treatment of Cable Operators and DBS Providers that Provide Linear Video |
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Services via IP ............................................................................................................................... 71 |
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1. Cable Service Provided via IP Over the Operator’s Facilities ................................................ 72 |
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2. Cable Operators Offering OTT Services................................................................................. 78 |
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3. DBS Providers Offering OTT Services................................................................................... 79 |
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IV. PROCEDURAL MATTERS................................................................................................................ 80 |
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V. ORDERING CLAUSES....................................................................................................................... 88 |
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APPENDIX A – Proposed Rules |
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APPENDIX B – Initial Regulatory Flexibility AnalysisFederal Communications Commission FCC 14-210 |
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2 |
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I. INTRODUCTION |
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1. In this Notice of Proposed Rulemaking (“NPRM”), we propose to update our rules to |
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better reflect the fact that video services are being provided increasingly over the Internet. Specifically, |
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we propose to modernize our interpretation of the term “multichannel video programming distributor” |
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(“MVPD”) by including within its scope services that make available for purchase, by subscribers or |
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customers, multiple linear streams of video programming, regardless of the technology used to distribute |
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the programming. Such an approach will ensure both that incumbent providers will continue to be subject |
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to the pro-competitive, consumer-focused regulations that apply to MVPDs as they transition their |
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services to the Internet1 |
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and that nascent, Internet-based video programming services2 will have access to |
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the tools they need to compete with established providers. |
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3 |
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2. Here the Commission faces, as it has before, the impact of technology transition. |
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Incumbent cable systems have made plain their intent to use a new transmission standard that will permit |
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cable systems to deliver video via IP, and other innovative companies are also experimenting with new |
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business models based on Internet distribution. |
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4 That is not surprising: Over-the-air television has moved |
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from analog transmission to digital. The telephone networks of the 20th Century have become broadband |
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networks, providing a critical pathway to the Internet. And, in our January Technology Transitions Order, |
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the Commission encouraged experiments that assess the impact on consumers of the coming transition |
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from traditional copper facilities to new telecommunications networks composed of fiber, copper, coaxial |
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cable, and/or wireless connections. |
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1 |
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We see daily news that cable operators and satellite television providers are obtaining rights for online distribution |
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of content. Sam Adams and Christian Plumb, Verizon CEO says to launch Web TV product in 2015, REUTERS, |
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September 11, 2014, available at http://www.reuters.com/article/2014/09/11/us-verizon-comms-towersidUSKBN0H61KB20140911 |
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(reporting that Sony, Dish Network, DIRECTV and Verizon are each developing |
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Internet-delivered streaming video services that are a “viable alternative to cable TV service.”); Edmund Lee, Scott |
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Moritz and Alex Sherman, Dish Leads in Race to Offer Online TV to Compete With Cable, BLOOMBERG, March 15, |
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2014, available at http://www.bloomberg.com/news/2014-03-04/dish-takes-lead-in-race-to-offer-streaming-tv-torival-cable.html |
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(“If Dish goes ahead with an online service, competitors could follow -- including cable companies |
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like Comcast and Cablevision Systems Corp., which could move out of their traditional regions to offer TV |
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nationwide, said Bernard Gershon, a digital media consultant in New York.”); Chris Young, Industry awaits linear |
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OTT experiment, SNL KAGAN, July 18, 2014, available at |
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http://www.snl.com/interactivex/article.aspx?id=28627040&KPLT=2; Comcast branches out cloud DVR, live |
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streaming service, CED MAGAZINE, May 8, 2014, available at |
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http://www.cedmagazine.com/news/2014/05/comcast-branches-out-cloud-dvr-live-streaming-service (“Like other |
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video service providers, Comcast is focused on offering live streaming out of the home.”). AT&T’s U-Verse service |
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is delivered via Internet Protocol (“IP”) today. See AT&T, WHAT IS IPTV? (2009), available at |
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https://www.att.com/Common/about_us/files/pdf/IPTV_background.pdf. In recognition of the increasing |
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prevalence of Internet distribution of video, the National Cable & Telecommunications Association has renamed its |
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annual Cable Show as INTX: the Internet and Television Expo, “in an effort to broaden the three-day gathering to |
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include online video providers and distributors beyond the traditional Cable Show crowd.” Kent Gibbons, NCTA: |
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‘Cable Show’ Convention Becoming INTX, MULTICHANNEL NEWS (Sept. 17, 2014), |
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http://www.multichannel.com/ncta-cable-show-convention-becoming-intx/383922. |
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2 |
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For readability throughout this NPRM, we use the term “Internet-delivered” to refer to any service delivered using |
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IP whether or not it uses the public Internet, except for cable service. See infra ¶ 71. |
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3 |
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See Letter from Seth Greenstein, Counsel to Aereo, to Marlene H. Dortch, Secretary, Federal Communications |
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Commission, MB Docket No. 12-83, at 2 (filed Oct. 10, 2014) (“Particularly in the wake of adverse judicial and |
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agency decisions over the last several years, linear online streaming services likely cannot attract the level of |
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investment necessary to create meaningful competition to incumbent business models without a clear path of |
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regulatory certainty.”). |
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4 |
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See supra n.1. See also Brian Santo and Mike Robuck, DOCSIS 3.1 takes center stage at Cable-Tec Expo, CED |
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MAGAZINE, (Nov. 21, 2012, 9:56 AM), http://www.cedmagazine.com/articles/2012/11/docsis-31-takes-center-stageat-cable-tec-expo.Federal |
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Communications Commission FCC 14-210 |
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3 |
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3. The Commission has recognized that innovation must be encouraged, but not at the |
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expense of technology-neutral public policies. That is why the January Technology Transitions Order |
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emphasized the importance of preserving competition, consumer protection, and public safety. And that |
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is why this NPRM proposes to ensure that the rights and responsibilities of an MVPD are not jeopardized |
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by changes in technology. This IP transition will enable cable operators to untether their video offerings |
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from their current infrastructure, and could encourage them to migrate their traditional services to Internet |
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delivery. With these changes on the horizon, it becomes important to interpret the statutory definition of |
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MVPD to ensure that our rules apply sensibly and in a way that encourages innovation regardless of how |
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service is delivered and that the pro-consumer values embodied in MVPD regulation will continue to be |
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served. In so doing, we take note of the regulatory requirements that cable operators must adhere to as |
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they use new technology to offer services, and we invite comment on the regulatory treatment of |
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additional services that cable operators may offer. |
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4. Adoption of a technology-neutral MVPD definition will not only preserve current |
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responsibilities, it may create new competitive opportunities that will benefit consumers. Increasingly, |
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companies – incumbents and new entrants alike – are interested in using the Internet as the transmission |
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path for packages of video channels.5 |
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In initiating this proceeding, our goal is to bring our rules into |
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synch with the realities of the current marketplace and consumer preference where video is no longer tied |
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to a certain transmission technology. |
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6 |
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5. Specifying the circumstances under which an Internet-based provider may qualify as an |
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MVPD, possessing the rights as well as responsibilities that attend that status, may incent new entry that |
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will increase competition in video markets. In particular, extending program access protections to |
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Internet-based providers would allow them to “access[] critical programming needed to attract and retain |
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subscribers.”7 |
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And extending retransmission consent protections and obligations to those providers would |
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allow them to enter the market “for the disposition of the rights to retransmit broadcast signals.”8 |
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Broadcast and cable-affiliated programming could make Internet-based services attractive to customers, |
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who would access the services via broadband. The resulting increased demand for broadband may in turn |
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provide a boost to the deployment of high-speed broadband networks. |
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6. In this NPRM, we seek comment on possible interpretations of the term MVPD as used in |
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the Communications Act of 1934, as amended (the “Act”) and seek comment on how each of those |
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interpretations would affect the industry and consumers. In Section III.A, we seek comment on two |
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possible interpretations: |
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We propose to interpret the term MVPD to mean distributors of multiple linear video |
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programming streams, including Internet-based services. |
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5 |
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See supra n.1. |
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6 |
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See Technology Transitions; AT&T Petition to Launch a Proceeding Concerning the TDM-to-IP Transition; |
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Connect America Fund; Structure and Practices of the Video Relay Service Program; Telecommunications Relay |
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Services And Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities; Numbering Policies |
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for Modern Communications, 29 FCC Rcd 1433, 1446, ¶ 37 (2014) (“we seek both to advance new network |
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technologies and learn how best to protect and enhance the core statutory values of public safety, universal access, |
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competition, and consumer protection.”); Closed Captioning of Internet Protocol-Delivered Video Programming: |
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Implementation of the Twenty-First Century Communications and Video Accessibility Act of 2010, 27 FCC Rcd 787, |
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791-2, ¶ 5 (2012) (recounting the evolution of video distribution methods). |
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7 Revision of the Commission’s Program Access Rules, Report and Order and Further Notice of Proposed |
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Rulemaking, 27 FCC Rcd 12605, 12608, ¶ 3 (2012). |
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8 |
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S. Rep. No. 92, 102nd Cong., 1st Sess. (1991), reprinted in 1992 U.S.C.C.A.N. 1133, 1169.Federal Communications Commission FCC 14-210 |
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4 |
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o We tentatively conclude that this interpretation is a reasonable interpretation of the |
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Act, and is most consistent with consumer expectations and conditions in the |
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industry. |
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We also seek comment on an alternative interpretation that would require a programming |
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distributor to have control over a transmission path to qualify as an MVPD. |
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o We invite comment on whether this interpretation is consistent with the Act and |
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Congressional intent and how this interpretation would apply as companies begin to |
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offer subscription linear video services over the Internet. |
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7. In Section III.B, we seek comment on the effects that either interpretation would have on |
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entities that are classified as MVPDs, consumers, and content owners. |
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We seek comment on how each interpretation would benefit and burden entities that would |
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be subject to our rules. |
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o We also ask whether we should consider exemption or waiver of certain regulations, |
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if allowed under the statute. |
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o We seek comment on whether to modify our retransmission consent “good faith” |
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negotiation rules with respect to Internet-based MVPDs to protect local broadcasters. |
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We seek comment on what impact these interpretations would have on content owners, |
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including broadcasters and cable-affiliated programmers. |
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Finally, we seek comment on how to ensure that our interpretation will promote competition |
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and broadband adoption, consistent with the Act and Commission policy. |
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8. In Section III.C, we note that the fact that an entity uses IP to deliver cable service does |
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not alter the classification of its facility as a cable system and does not alter the classification of the entity |
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as a cable operator. In other words, those video programming services provided over the operator’s |
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facilities remain subject to regulation as cable services. We seek comment on the regulatory status of |
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purely Internet-based linear video programming services that cable operators and direct broadcast satellite |
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(“DBS”) providers may choose to offer in addition to their traditional services. |
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II. BACKGROUND |
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9. The Act defines an MVPD as: |
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[A] person such as, but not limited to, a cable operator, a multichannel multipoint |
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distribution service, a direct broadcast satellite service, or a television receive-only |
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satellite program distributor, who makes available for purchase, by subscribers or |
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customers, multiple channels of video programming.9 |
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The Act also defines the terms “channel” and “video programming,” which are used in the MVPD |
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definition. A “channel” is defined as “a portion of the electromagnetic frequency spectrum which is used |
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in a cable system and which is capable of delivering a television channel (as television channel is defined |
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9 |
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47 U.S.C. § 522(13); see also 47 C.F.R. §§ 76.64(d), 76.71(a), 76.905(d), 76.1000(e), 76.1200(b), 76.1300(d). Federal Communications Commission FCC 14-210 |
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5 |
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by the Commission by regulation).”10 |
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The Act defines “video programming” as “programming provided |
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by, or generally considered comparable to programming provided by, a television broadcast station.”11 |
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10. On March 24, 2010, Sky Angel U.S., LLC (“Sky Angel”), a provider of multiple streams |
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of prescheduled programming over the Internet, filed a complaint and petition for temporary standstill for |
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program access relief, which is available only to MVPDs. On April 21, 2010, the Commission’s Media |
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Bureau denied the petition for standstill, holding that Sky Angel failed to carry its burden of |
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demonstrating that it is likely to succeed in showing on the merits that it is an MVPD entitled to seek |
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relief under the program access rules.12 |
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The Media Bureau determined that the term “channel” as used in |
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the definition of MVPD appears to include a transmission path as a necessary element.13 |
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Based on the |
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limited record at the time, the Bureau was unable to find that Sky Angel provides its subscribers with a |
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transmission path.14 |
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Sky Angel’s complaint, a second petition for injunctive relief, a motion for |
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sanctions, and discovery requests are pending. In 2012, Sky Angel filed a Petition for Writ of Mandamus |
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with the United States Court of Appeals for the D.C. Circuit, asking the court to require the Commission |
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to adopt and release a final order on the merits of its complaint,15 and the court denied the Petition |
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“without prejudice to renewal in the event of significant delay.”16 |
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In March 2012, the Media Bureau |
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issued a Public Notice in connection with the Sky Angel complaint, seeking comment on the most |
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appropriate interpretation of the definition of an MVPD (the “March 2012 Public Notice”) to ensure that |
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the Commission has the benefit of broad public input.17 |
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In June 2014, Sky Angel notified the |
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10 47 U.S.C. § 522(4). The Commission’s regulations define a “television channel” as “a band of frequencies 6 MHz |
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wide in the television broadcast band and designated either by number or by the extreme lower and upper |
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frequencies.” 47 C.F.R. § 73.681; see also 47 C.F.R. §§ 73.603, 73.606, 73.682(a)(1). The Commission’s |
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regulations also define a “cable television channel” as a “signaling path provided by a cable television system.” 47 |
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C.F.R. § 76.5(r)-(u). |
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11 47 U.S.C. § 522(20). |
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12 See Sky Angel U.S., LLC, Order, 25 FCC Rcd 3879, 3882-83, ¶ 7 (MB, 2010) (“Sky Angel Standstill Denial”). |
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The procedural background of this case is complex: In March 2010, Sky Angel filed a program access complaint |
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against Discovery Communications, LLC and its affiliate, Animal Planet, L.L.C. (collectively, “Discovery”), as well |
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as a petition for a standstill extending rights it had under its affiliation agreement with Discovery. See Sky Angel |
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Program Access Complaint; Sky Angel U.S., LLC, Emergency Petition for Temporary Standstill, MB Docket No. |
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12-80, File No. CSR-8605-P (March 24, 2010). When Sky Angel filed its complaint, it provided a national |
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subscription-based service of approximately eighty channels of video and audio programming including MLB |
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Network, NFL Network, Hallmark Channel, and Weather Channel via a set-top box that has a broadband Internet |
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input and video outputs that connect directly to a television set. See Sky Angel Complaint at 1-9. Sky Angel filed |
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its complaint and standstill request with the Commission after receiving notice that Discovery intended to terminate |
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its affiliation agreement with Sky Angel covering certain Discovery networks. The Media Bureau denied the |
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standstill request on the basis that Sky Angel failed to carry its burden of demonstrating that it is likely to succeed in |
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showing on the merits that it is an MVPD entitled to seek relief under the program access rules. Sky Angel Standstill |
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Denial, 25 FCC Rcd at 3882-83, ¶ 7. Sky Angel subsequently filed a renewed petition for standstill. See Sky Angel |
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U.S., LLC, Renewed Petition for Temporary Standstill, MB Docket No. 12-80 (May 27, 2011). |
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13 See Sky Angel Standstill Denial, 25 FCC Rcd at 3882-83, ¶ 7. |
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14 See id. |
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15 See Sky Angel U.S., LLC, Petition for Writ of Mandamus, Case No. 12-1119 (filed Feb. 27, 2012). |
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16 Sky Angel U.S., LLC, Order, Case No. 12-1119 (D.C. Cir. 2012). |
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17 See Media Bureau Seeks Comment on Interpretation of the Terms “Multichannel Video Programming |
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Distributor” and “Channel” as Raised in Pending Program Access Complaint Proceeding, MB Docket No. 12-83, |
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Public Notice, 27 FCC Rcd 3079 (MB 2012) (“March 2012 Public Notice”). Federal Communications Commission FCC 14-210 |
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6 |
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Commission that it had “suspended its video and audio distribution services” in January 2014 because it |
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is unable “to acquire programming in a fair and nondiscriminatory way.”18 |
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11. More recently, issues have arisen regarding the status of Aereo, Inc., a former provider of |
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online linear video programming, under the Copyright Act and Communications Act. On June 25, 2014, |
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the Supreme Court found that Aereo violated certain copyright holders’ exclusive right to perform their |
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works publicly as provided under the Copyright Act.19 |
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Aereo then filed with the Copyright Office to pay |
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statutory royalties to retransmit broadcast signals as a cable system. The Copyright Office accepted the |
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filing “on a provisional basis,” pending “further regulatory or judicial developments,”20 including this |
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Commission’s interpretation of the term MVPD and the outcome of the case that was pending before the |
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U.S. District Court for the Southern District of New York. |
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21 |
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On November 21, 2014, Aereo filed to |
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reorganize under Chapter 11 of the U.S. Bankruptcy Code.22 |
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12. Comments filed in response to the March 2012 Public Notice reveal a wide range of |
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views.23 |
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By initiating this rulemaking proceeding, we propose an interpretation that we based on many |
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comments in the record of that proceeding. But we continue to seek broad public input, including |
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discussions with stakeholders, which will fully inform us as we seek to clarify the scope of the definition |
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of MVPD. We note that the Media Bureau recently changed the ex parte status of the March 2012 Public |
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Notice. |
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24 And today, the Bureau issued a decision holding the Sky Angel proceeding in abeyance pending |
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the outcome of this proceeding and terminating the March 2012 Public Notice docket. These actions will |
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allow parties to discuss with the Commission the definitional and policy issues raised herein without |
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running afoul of the ex parte rules. |
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III. DISCUSSION |
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13. As discussed below, we tentatively conclude that the statutory definition of MVPD |
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includes certain Internet-based distributors of video programming. |
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25 |
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Specifically, we propose to interpret |
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the term MVPD to mean all entities that make available for purchase, by subscribers or customers, |
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multiple streams of video programming distributed at a prescheduled time. In reaching this conclusion, |
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18 Supplemental Comments of Sky Angel U.S., LLC, MB Docket No. 12-80, File No. CSR-8605-P, at 1 (June 10, |
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2014). |
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19 American Broadcasting Companies, Inc. v. Aereo, Inc., 134 S.Ct. 2498 (2014). |
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20 Letter from Jacqueline C. Charlesworth, General Counsel and Associate Register of Copyrights, U.S. Copyright |
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Office, to Matthew Calabro, Director of Financial Planning & Analysis and Revenue, Aereo, Inc. (July 16, 2014). |
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The letter rejected Aereo’s argument that it is a cable operator under the Copyright Act but indicated that the |
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Copyright Office might revisit that conclusion if the Commission should find Aereo to be an MVPD under the |
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Communications Act. On October 23, 2014, the Federal District Court for the Southern District of New York |
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granted certain broadcast stations’ request for a preliminary injunction to stop Aereo’s live and near-live streaming |
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of their broadcast signals over the Internet. The court appeared to leave open the possibility that Aereo could be |
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entitled to a statutory copyright license if the Copyright Office and this Commission changed our interpretations of |
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our respective statutes. See American Broadcasting Companies, Inc. et al. v. Aereo, Inc., Nos. 12–cv–1540, 12–cv– |
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1543, 2014 WL 5393867, at *5, n.3 (SDNY Oct. 23, 2014). |
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21 Eriq Gardner, Appeals Court Denies Aereo’s Request for New Hearing, THE HOLLYWOOD REPORTER (Aug. 22, |
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2014, 6:38 AM), http://www.hollywoodreporter.com/thr-esq/appeals-court-denies-aereos-request-727009. |
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22 See Chet Kanojia, The Next Chapter, AEREO BLOG (Nov. 21, 2014), http://blog.aereo.com/2014/11/next-chapter/. |
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23 Unless otherwise noted, all comments and reply comments discussed and cited herein were filed on May 14, 2012 |
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and June 13, 2012, respectively, in MB Docket No. 12-83. |
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24 See “Permit But Disclose” Ex Parte Procedures Established for Docket Seeking Comment on Interpretation of |
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the Terms “Multichannel Video Programming Distributor” and “Channel” as Raised in Pending Program Access |
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Complaint Proceeding, Public Notice, DA 14-1214 (MB rel. September 30, 2014). |
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25 See supra n.2.Federal Communications Commission FCC 14-210 |
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7 |
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we understand that the market for Internet-based distribution of video programming is nascent and that |
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companies continue to experiment with business models. The current business models include, but are |
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not limited to, the following types of Internet-based video service offerings, including combinations of |
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these offerings: |
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Subscription Linear. We use this term to refer to Internet-based distributors that make |
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available continuous, linear26 streams of video programming on a subscription basis. This |
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category includes Sky Angel’s service as it existed before 2014 and Aereo’s service as it |
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existed before the Supreme Court decision. |
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Subscription On-Demand. We use this term to refer to Internet-based distributors that make |
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video programming available to view on-demand27 on a subscription basis, allowing |
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subscribers to select and watch television programs, movies, and/or other video content |
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whenever they request to view the content without having to pay an additional fee beyond |
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their recurring subscription fee. This category includes Amazon Prime Instant Video, Hulu |
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Plus, and Netflix.28 |
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Transactional On-Demand. We use this term to refer to Internet-based distributors that make |
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video programming available to view on-demand, with consumers charged on a per-episode, |
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per-season, or per-movie basis to rent the content for a specific period of time or to download |
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the content for storage on a hard drive for viewing at any time. |
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29 |
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This category includes |
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Amazon Instant Video, CinemaNow (Best Buy), Google Play, iTunes Store (Apple), Sony |
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Entertainment Network, Vudu (Walmart), and Xbox Video (Microsoft). |
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30 |
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Ad-based Linear and On-Demand. We use this term to refer to Internet-based distributors |
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that make video programming available to view linearly or on demand, with consumers able |
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to select and watch television programs, movies, and/or other video content whenever they |
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request on a free, ad-supported basis. This category includes Crackle, FilmOn, Hulu, Yahoo! |
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Screen, and YouTube as they exist today. |
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26 In this NPRM, we use the terms linear and pre-scheduled interchangeably, consistent with prior Commission use. |
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See Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Notice of |
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Inquiry, 29 FCC Rcd 1597, 1603, ¶ 15, n.23 (2014) (“A linear channel is one that distributes programming at a |
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scheduled time. Non-linear programming, such as video-on-demand (‘VOD’) and online video content, is available |
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at a time of the viewer’s choosing.”); Implementation of Section 304 of the Telecommunications Act of 1996, Fourth |
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Further Notice of Proposed Rulemaking, 25 FCC Rcd 4303, 4308, ¶ 14 n.43 (2010) (“The term ‘linear |
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programming’ is generally understood to refer to video programming that is prescheduled by the programming |
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provider. Cf. 47 U.S.C. § 522(12) (defining ‘interactive on-demand services’ to exclude ‘services providing video |
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programming prescheduled by the programming provider’).”). |
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27 We use the term “on-demand” to refer to programming that is not prescheduled by the programming provider. |
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See 47 U.S.C. § 522(12) (defining “interactive on-demand service” as “a service providing video programming to |
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subscribers over switched networks on an on-demand, point-to-point basis, but does not include services providing |
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video programming prescheduled by the programming provider.” (emphasis added)). |
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28 See Annual Assessment of the Status of Competition in the Market for Delivery of Video Programming, Fourteenth |
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Report, 27 FCC Rcd 8610, 8722, ¶ 246, 8725, ¶ 252, 8726, ¶ 254 (2012) (“14th Annual Report”). |
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29 “Electronic sell through” (“EST”) services are a subset of “on demand” services that make content available to |
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consumers on a download-to-own basis. See Anytime On Demand, Media Centre: Glossary of Terms, |
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http://www.anytimeondemand.com/glossary_of_terms.html#electronic; Project Concord, Inc. v. NBCUniversal |
|
Media, LLC, Order on Review, DA 12-1958 (Nov. 13, 2012), at ¶ 12 n.55. We use the term Transactional OnDemand |
|
to refer to both rental and download-to-own services. |
|
30 See 14th Annual Report, 27 FCC Rcd at 8724, ¶ 249, 8725-26, ¶¶ 253-54, 8727, ¶¶ 256-57.Federal Communications Commission FCC 14-210 |
|
8 |
|
Transactional Linear. We use this term to refer to non-continuous linear programming that is |
|
offered on a transactional basis. This category includes Ultimate Fighting Championship’s |
|
UFC.TV pay-per-view service. |
|
We invite commenters to identify other categories and examples of Internet-based distributors of video |
|
programming not mentioned here. |
|
14. As explained below, we seek comment on our tentative conclusion that entities that |
|
provide Subscription Linear video services are MVPDs as that term is defined in the Act because they |
|
make multiple channels of video programming available for purchase. We seek comment also on whether |
|
any of the other categories of Internet-based distributors of video programming identified above fall |
|
within the statutory definition of an MVPD. Because these other Internet-based distributors of video |
|
programming either (1) make programming available for free, and not “for purchase” as required by the |
|
definition of an MVPD, or (2) do not provide prescheduled programming that is comparable to |
|
programming provided by a television broadcast channel,31 we believe they fall outside the statutory |
|
definition.32 |
|
We seek comment on this view. |
|
15. Below, we begin by seeking comment on our proposed interpretation of the definition of |
|
the term MVPD and on alternative interpretations. |
|
33 |
|
We then seek comment on the public policy |
|
ramifications of these alternatives and any other alternatives commenters may suggest. We note that an |
|
entity that uses IP to deliver cable service does not alter the classification of its facility as a cable system |
|
and does not alter the classification of the entity as a cable operator. Finally, we seek comment on how to |
|
treat Internet-based linear video programming services that cable operators and DBS providers may |
|
choose to offer in addition to their traditional services. |
|
A. Defining MVPD |
|
16. To qualify as an MVPD under the Communications Act, an entity must “make[] available |
|
for purchase, by subscribers or customers, multiple channels of video programming.”34 |
|
The Commission |
|
has previously held that video distributed over the Internet qualifies as “video programming.”35 |
|
Thus, the |
|
key remaining definitional issue is how to interpret the phrase “multiple channels of video programming.” |
|
We seek comment on this issue as set forth below. |
|
17. The Act defines a “channel” as “a portion of the electromagnetic frequency spectrum |
|
which is used in a cable system and which is capable of delivering a television channel (as television |
|
channel is defined by the Commission by regulation).”36 |
|
As discussed in the Media Bureau’s March 2012 |
|
|
|
31 See 47 U.S.C. § 522(20) (defining “video programming”). |
|
32 47 U.S.C. § 522(13); see 14th Annual Report, 27 FCC Rcd at 8722, ¶ 246, 8723, ¶ 248. |
|
33 This NPRM does not define or opine on which services or providers are in the same relevant product market as a |
|
service designated as an MVPD. |
|
34 47 U.S.C. § 522(13). |
|
35 The Act defines “video programming” as “programming provided by, or generally considered comparable to |
|
programming provided by, a television broadcast station.” 47 U.S.C. § 522(20). Although the Commission stated a |
|
decade ago that “Internet video, called ‘streaming video’ . . . has not yet achieved television quality . . . and |
|
therefore is not consistent with the definition of video programming,” it recently reached the opposite conclusion in |
|
light of technological developments. Compare Inquiry Concerning High-Speed Access to the Internet Over Cable |
|
and Other Facilities, Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd 4798, 4834, ¶ 63 n.236 |
|
(2002) with Preserving the Open Internet, Report and Order, 25 FCC Rcd 17905, 17976, ¶ 129 n.408 (2010), |
|
vacated on other grounds, Verizon v. FCC, 740 F.3d 623 (DC Cir 2014) (“intervening improvements in streaming |
|
technology and broadband availability enable such programming to be ‘comparable to programming provided by . . . |
|
a television broadcast station’”) (quoting definition of “video programming” in 47 U.S.C. § 522(20)). |
|
36 47 U.S.C. § 522(4). Federal Communications Commission FCC 14-210 |
|
9 |
|
Public Notice and in further detail below, there are at least two possible interpretations of the term |
|
“channel” within the definition of MVPD.37 |
|
We tentatively conclude that the best reading is that |
|
“channels of video programming” means streams of linear video programming (the “Linear Programming |
|
Interpretation”). Under this interpretation, linear video programming networks, such as ESPN, The |
|
Weather Channel, and other sources of video programming that are commonly referred to as television or |
|
cable “channels,” would be considered “channels” for purposes of the MVPD definition, regardless of |
|
whether the provider also makes available physical transmission paths.38 |
|
We also seek comment on an |
|
alternative interpretation under which the definition of MVPD would include only entities that make |
|
available transmission paths in addition to content, and thus exclude those Internet-based distributors of |
|
video programming that do not own or operate facilities for delivering content to consumers (the |
|
“Transmission Path Interpretation”).39 |
|
We seek comment on which interpretation is most consistent with |
|
the text, purpose, legislative history, and structure of the Act and which interpretation best serves |
|
Congressional intent. We also invite commenters to identify any other interpretation of MVPD that is |
|
consistent with the statute and would better serve Congressional intent. For example, some commenters |
|
call for a “functional equivalency” standard, whereby an entity would qualify as an MVPD if it looks and |
|
functions like a traditional MVPD from the perspective of consumers; others suggest that Internet-based |
|
distributors should be allowed to elect whether or not to avail themselves of MVPD status, taking on both |
|
the benefits of such status (such as program access) as well as the regulatory obligations.40 To the extent |
|
that any commenters favor these or other interpretations, they should explain how their proposed |
|
interpretation comports with the statute, how it would be administered or adjudicated in particular cases, |
|
and describe the policy ramifications. |
|
1. Proposed “Linear Programming Interpretation” |
|
18. Under our proposed rule, we would interpret the term “channels of video programming” |
|
to mean prescheduled streams of video programming (which we refer to in this NPRM as “linear” |
|
programming), without regard to whether the same entity is also providing the transmission path. |
|
41 |
|
We |
|
believe that this is the better interpretation for three reasons: (i) it is a reasonable interpretation of the Act |
|
and most consistent with Congressional intent, (ii) it best aligns with consumer expectations and industry |
|
developments, and (iii) it is consistent with the common meaning of the word channel. We seek comment |
|
on the interpretation as set forth below. We seek comment also on our proposal to define “linear video” |
|
as a “stream of video programing that is prescheduled by the programmer.”42 |
|
19. We tentatively conclude that our proposed Linear Programming Interpretation is |
|
consistent with the language of the statute. The statutory definition of MVPD begins by stating that an |
|
|
|
37 See March 2012 Public Notice, 27 FCC Rcd at 3079, ¶ 1. |
|
38 See id.. |
|
39 In denying Sky Angel’s standstill request, the Media Bureau expressed tentative approval of the Transmission |
|
Path Interpretation. See Sky Angel Standstill Denial, 25 FCC Rcd at 3882-83, ¶ 7. In doing so, the Media Bureau |
|
cautioned that its action “should not be read to state or imply that the Commission, or the Bureau acting on |
|
delegated authority, will ultimately conclude, in resolving the underlying complaint, that Sky Angel does not meet |
|
the definition of an MVPD.” Id. at 3884, ¶ 10. We also note that staff-level decisions are not binding on the |
|
Commission. See Comcast Corp. v. FCC, 526 F.3d 763, 769 (D.C. Cir. 2008). |
|
40 See Sky Angel Comments at 19-20; Comments of Syncbak, Inc. at 3 (“Syncbak Comments”) (calling for a |
|
“functional equivalency” standard); see also Reply Comments of M3X Media, Inc. at 3-4 (“M3X Reply |
|
Comments”); Reply Comments of Syncbak, Inc. at 6 (“Syncbak Reply Comments”) (suggesting that the |
|
Commission should allow entities to choose whether to have MVPD status); see also infra ¶¶ 33-64 (discussing the |
|
regulatory privileges and obligations of MVPD status). |
|
41 See Appendix A (proposing new rule section 76.5(ss)). |
|
42 See Appendix A (proposing new rule section 76.5(rr)). The Commission has used the word “linear” to refer |
|
generally to prescheduled video programming. See supra n.26. Federal Communications Commission FCC 14-210 |
|
10 |
|
MVPD is a “person such as, but not limited to, a cable operator, a multichannel multipoint distribution |
|
service, a direct broadcast satellite service, or a television receive-only satellite program distributor . . . |
|
.”43 |
|
In the Sky Angel Standstill Denial, the Media Bureau stated that, although the list is preceded by the |
|
phrase “not limited to,” making it clear that the list is illustrative rather than exclusive, it is also preceded |
|
by the phrase “such as,” which suggests that other covered entities should be “similar” to those listed.44 |
|
|
|
We tentatively conclude that the essential element that binds the illustrative entities listed in the provision |
|
is that each makes multiple streams of prescheduled video programming available for purchase, rather |
|
than that the entity controls the physical distribution network.45 |
|
Therefore, we believe that our |
|
interpretation is consistent with the illustrative list of MVPDs that the statutory definition provides. |
|
20. In addition, the Commission has previously held that an entity need not own or operate |
|
the facilities that it uses to distribute video programming to subscribers in order to qualify as an MVPD.46 |
|
|
|
Rather, an MVPD may use a third party’s distribution facilities in order to make video programming |
|
available to subscribers.47 |
|
We find, therefore, that our proposed interpretation is consistent with |
|
Commission precedent. We seek comment on this finding. |
|
21. We also find the term “channel” used in the context of the MVPD definition (i.e., |
|
“multiple channels of video programming”) to be ambiguous. Further, we tentatively conclude that |
|
Congress did not intend the term “channel” in this context to be interpreted in accordance with the |
|
definition in Section 602(4) of the Act,48 but rather intended the term to be given its ordinary and common |
|
meaning. The Act states that “the term ‘cable channel’ or ‘channel’ means a portion of the |
|
electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a |
|
|
|
43 47 U.S.C. § 522(13) (emphasis added). |
|
44 Sky Angel Standstill Denial, 25 FCC Rcd at 3883, n.41; see also ACA Comments at 7-8; Cablevision Comments |
|
at 9; Discovery Comments at 4. |
|
45 See Comments of Public Knowledge at 8-9 (“Public Knowledge Comments”); see also ABC/CBS/NBC Affiliates |
|
Reply Comments at 4 (“The statute contains no express limitation predicated on the technological method by which |
|
video programming is delivered to subscribers or customers . . . .”) (emphasis in original). Consistent with this |
|
interpretation, DIRECTV and SkyAngel note that one of the statutory examples – “a television receive-only satellite |
|
program distributor” – does not provide or control the transmission path used to provide video programming to |
|
subscribers or customers, thereby supporting our tentative conclusion. See DIRECTV Comments at 8-10; Sky Angel |
|
Comments at 16-17; see also Implementation of Sections of the Cable Television Consumer Protection and |
|
Competition Act of 1992: Rate Regulation, Report and Order and Further Notice of Proposed Rulemaking, 8 FCC |
|
Rcd 5631, 5651-52, ¶ 23 (1993) (“TCI asserts that, by including television receive-only satellite programming |
|
distributors in the definition of a multichannel video programming distributor, Congress showed that a distributor |
|
need not be facilities-based in order to come within the scope of the effective competition test. We agree with TCI |
|
that a qualifying distributor need not own its own basic transmission and distribution facilities.”) (“1993 Rate |
|
Regulation Order”); ABC/CBS/NBC Affiliates Reply Comments at 7-9; DIRECTV Reply Comments at 3-5; Sky |
|
Angel Reply Comments at 15-16. Other commenters dispute DIRECTV and Sky Angel’s assertion that receive-only |
|
satellite programming distributors are not facilities based. See Cablevision Comments at 8; Comcast/NBCU Reply |
|
Comments at 5-6; NCTA Reply Comments at 4-5. |
|
46 See Implementation of Section 302 of the Telecommunications Act of 1996, Third Report and Order and Second |
|
Order on Reconsideration, 11 FCC Rcd 20227, 20301, ¶ 171 (1996) (“[W]e find Rainbow’s argument that video |
|
programming providers cannot qualify as MVPDs because they may not operate the vehicle for distribution to be |
|
unsupported by the plain language of Section 602(13), which imposes no such requirement.”) (“OVS Second Order |
|
on Recon”); see also1993 Rate Regulation Order, 8 FCC Rcd at 5651-52, ¶ 23. |
|
47 The Commission noted that the effective competition test in Section 623 of the Act suggests that an MVPD can |
|
use another entity’s facilities (e.g., that of a local exchange carrier or its affiliate) to provide video programming. |
|
See OVS Second Order on Recon, 11 FCC Rcd at 20301, ¶ 171; see also 47 U.S.C. § 543(l)(1)(D) (referring to video |
|
programming provided by “a local exchange carrier or its affiliate (or any multichannel video programming |
|
distributor using the facilities of such carrier or its affiliate)”). |
|
48 47 U.S.C. § 522(4).Federal Communications Commission FCC 14-210 |
|
11 |
|
television channel (as television channel is defined by the Commission by regulation).49 |
|
This definition |
|
was adopted in the 1984 Cable Act, which focused primarily on the regulation of cable television.50 |
|
In |
|
contrast, the term “MVPD” was adopted by Congress eight years later in 1992, when new competitors to |
|
cable were emerging, and is specifically “not limited” solely to cable operators. |
|
51 |
|
Therefore, we |
|
tentatively conclude that we should not rely on the cable-specific definition of the term “channel” to |
|
interpret the definition of “MVPD,” which is explicitly defined to encompass video programming |
|
distributors that include, but are not limited to, cable operators. |
|
52 |
|
|
|
22. Moreover, using the cable-specific definition of “channel” to interpret the definition of |
|
“MVPD” does not seem consistent with the illustrative list of MVPDs that is included in the definition. |
|
53 |
|
|
|
For example, DBS providers are specifically included in the definition as MVPDs, but the linear streams |
|
of video programming that they provide to subscribers do not align with the definition of “channel” in |
|
Section 602(4) of the Act, because that definition specifically refers to the electromagnetic spectrum |
|
“used in a cable system.” If Congress intended an entity to have control over the transmission path in |
|
order to be deemed an MVPD, presumably it would have explicitly specified that in the definition of |
|
MVPD, as it did with the definition of cable system. |
|
54 |
|
Therefore, we tentatively conclude that, when |
|
Congress defined an MVPD as an entity that “makes available . . . channels of video programming,” it did |
|
not intend to limit the types of entities that meet the definition to only those that control the physical |
|
method of delivery (i.e., a transmission path). As a consequence, we believe that this is a reasonable |
|
interpretation of the Act. We seek comment on this position. |
|
23. We believe that our proposed interpretation is consistent with Congress’s intent to define |
|
“MVPD” in a broad and technology-neutral way to ensure that it would not only cover video providers |
|
using technologies that existed in 1992, but rather be sufficiently flexible to cover providers using new |
|
|
|
49 47 U.S.C. § 522(4) (emphasis added). |
|
50 See Cable Communications Policy Act of 1984, Pub. L. No. 98-549, § 2, 98 Stat. 2779 (“1984 Cable Act”); see |
|
also H.R. Rep. No. 98-934 (1984), at 19, reprinted in 1984 U.S.C.C.A.N. 4655, 4656 (stating that the bill |
|
“establishes a national policy that clarifies the current system of local, state and federal regulation of cable |
|
television”). |
|
51 See Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, § 2, 106 Stat. |
|
1460 (1992) (adding Section 602(13) to the Act); see also 47 U.S.C. § 522(13) (defining MVPD as a “person such |
|
as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite |
|
service, or a television receive-only satellite program distributor . . .”) (emphasis added). |
|
52 See Comments of DIRECTV, LLC at 5 (“There is simply no way that the cable-centric definition of ‘channel’ can |
|
be squared with the list of non-cable providers listed in the definition of ‘MVPD.’”) (“DIRECTV Comments”); see |
|
also ABC/CBS/NBC Affiliates Comments at 7-8; AT&T Comments at 5; Comments of Sky Angel U.S., LLC at 20- |
|
23 (“Sky Angel Comments”). |
|
53 See ABC/CBS/NBC Affiliates Comments at 7; DIRECTV Comments at 5; Sky Angel Comments at 22. We also |
|
note Section 336 of the Act, which addresses ancillary broadcast services. 47 U.S.C. § 336. Under that section, the |
|
Commission is prohibited from deeming a broadcaster that offers multiple linear streams of video programming for |
|
a fee to be an MVPD. 47 U.S.C. § 336(b)(3). This statutory provision would not have been necessary if Congress |
|
intended “channel” to mean “a portion of the electromagnetic frequency spectrum . . . which is capable of delivering |
|
a television channel” because a broadcast station cannot provide multiple portions of the electromagnetic frequency |
|
spectrum that are capable of delivering a television channel. Compare 47 U.S.C. § 336(b)(3) with 47 U.S.C. § |
|
602(4) (defining “channel”). Section 336(b)(3) makes sense only if we read “channel” in the definition of |
|
multichannel video programming distributor to mean linear stream of video programming. |
|
54 Compare 47 U.S.C. § 522(7) (defining a “cable system” as a “facility, consisting of a set of closed transmission |
|
paths”) with 47 U.S.C. § 522(13) (not referring to “transmission paths” in the definition of “multichannel video |
|
programming distributor”). Federal Communications Commission FCC 14-210 |
|
12 |
|
technologies such as Internet delivery.55 |
|
The Act imposes important pro-consumer responsibilities on |
|
MVPDs. As incumbent MVPDs transition to IP delivery, we must ensure that the definition of MVPD is |
|
read broadly enough to ensure that consumers do not lose the benefits those provisions are intended to |
|
confer. For example, we note that the goals of the program access provision of the Cable Television |
|
Consumer Protection and Competition Act of 1992 (“1992 Cable Act”) are to increase competition and |
|
diversity in the video programming market, to increase the availability of programming to persons in rural |
|
areas, and to spur the development of communications technologies.56 |
|
It would frustrate those goals to |
|
exclude from coverage new technologies and services that develop. Consumers are watching more online |
|
subscription video,57 and incumbent operators and new entrants alike are experimenting with or planning |
|
to launch linear video services over the Internet.58 |
|
Therefore, we tentatively conclude that the Linear |
|
Programming Interpretation is most consistent with consumer expectations and industry trends, and we |
|
believe that Congress’s goals are best served by an interpretation of MVPD that accommodates changing |
|
technology.59 |
|
We seek comment on our tentative conclusion that our proposed interpretation is most |
|
consistent with consumer expectations and industry trends. To the extent that commenters disagree with |
|
our interpretation, they should address why an interpretation of MVPD that focuses on the physical |
|
|
|
55 See ABC/CBS/NBC Affiliates Comments at 4-5 (“It is well settled, and has been recognized repeatedly and in a |
|
variety of contexts, that statutory language is not frozen in time as of its enactment but can and should, consistent |
|
with legislative purpose, take account of technological developments.”) (citing United States v. Southwestern Cable |
|
Co., 392 U.S. 157, 172 (1968)). We note that the Commission previously characterized the definition of “MVPD” |
|
as “broad in its coverage.” See Implementation of the Cable Television Consumer Protection and Competition Act |
|
of 1992; Broadcast Signal Carriage Issues, Notice of Proposed Rulemaking, 7 FCC Rcd 8055, 8065, ¶ 42 (1992); |
|
Implementation of Sections 12 and 19 of the Cable Television Consumer Protection and Competition Act of 1992; |
|
Development of Competition and Diversity in Video Programming Distribution and Carriage, Notice of Proposed |
|
Rulemaking, 8 FCC Rcd 194, 195, ¶ 6 n.13 (1992). |
|
56 See 47 U.S.C. § 548(a) (“The purpose of this section is to promote the public interest, convenience, and necessity |
|
by increasing competition and diversity in the multichannel video programming market, to increase the availability |
|
of satellite cable programming and satellite broadcast programming to persons in rural and other areas not currently |
|
able to receive such programming, and to spur the development of communications technologies.”). |
|
57 See Deana Myers and Wade Holden, Online video market remains hot, SNL KAGAN, June 30, 2014, available at |
|
http://www.snl.com/interactivex/article.aspx?id=28507994&KPLT=2. |
|
58 See, e.g., DishWorld – Watch Live International TV Instantly, http://www.dishworld.com/ (last visited Oct. 22, |
|
2014); supra n.1. |
|
59 See AT&T Comments at 5 (“[I]nsofar as Congress intended the 1992 amendments to the Cable Act (including the |
|
program access provisions) to promote competition from alternative providers and technologies in the video space, it |
|
plainly did not intend to limit the term MVPD to those using a particular technology.”); Sky Angel Comments at 15- |
|
16 (“Congress’ intent was to generally increase competition to monopoly cable operators and to spur the |
|
development of new communications technologies. And it intended for these goals to be achieved on a ‘technologyneutral |
|
basis.’ As such, it would be wholly unreasonable to exclude every service that Congress did not expressly |
|
include in the definition.”) (quoting S. Rep. 102-92 (1991), 1992 U.S.C.C.A.N. 1133, 1159 (“Without fair and ready |
|
access on a consistent, technology-neutral basis, an independent entity … cannot sustain itself in the market.”)); but |
|
see infra ¶ 30 (noting that Conference Report discussing the program access provision of the 1992 Cable Act stated |
|
that the “conferees intend that the Commission shall encourage arrangements which promote the development of |
|
new technologies providing facilities-based competition to cable and extending programming to areas not served by |
|
cable”) (emphasis added).Federal Communications Commission FCC 14-210 |
|
13 |
|
delivery method an entity uses to provide video programming (i) would serve Congress’s goals,60 (ii) |
|
would promote innovation, and (iii) is consistent with the statute.61 |
|
24. Finally, certain commenters suggest that the term “channel” can be interpreted both in the |
|
“content” sense and in the “container” sense: “In a video context, the Act uses the term both in a |
|
‘container’ sense, to refer to a range of frequencies used to transmit programming, and in a ‘content’ |
|
sense to refer to the programming itself, or the programmer.”62 |
|
Those commenters argue that, based on |
|
the context, the content sense applies when interpreting the definition of MVPD, “since only that reading |
|
is consistent with the Act’s pro-competitive purposes.” |
|
63 We note that the legislative history of the 1992 |
|
Cable Act refers to ESPN as a “sports channel” and CNN as a “news channel”; given that both of these |
|
are linear programming networks, this suggests that Congress used the term channel, at least in this |
|
instance, to refer to such programming networks and not to portions of the electromagnetic frequency |
|
spectrum. |
|
64 |
|
Commenters provide numerous examples of the use of the term “channel” in both the content |
|
sense (i.e., a linear video programming network) and the container sense (i.e., a range of frequencies used |
|
to transmit programming) in everyday usage65 and in dictionaries,66 as well as by Congress67 and the |
|
|
|
60 See Reply Comments of CBS Corp. at 7 (“The legislative history of the 1992 Cable Act plainly reveals the intent |
|
of Congress that broadcasters have the opportunity to consent to - and seek compensation for - the retransmission of |
|
their signals by any person or entity, whatever its nature.”) (“CBS Reply Comments”); see also ABC/CBS/NBC |
|
Affiliates Comments at 15-16; Disney Reply Comments at 5; Fox Reply Comments at 8. |
|
61 See ACA Comments at 19-20; Discovery Reply Comments at 13 (arguing that policy goals cannot override “the |
|
Commission’s duty to adhere to the statute.”). |
|
62 Public Knowledge Comments at 2-3; see Reply Comments of ABC Television Affiliates Association, CBS |
|
Television Network Affiliates Association, and NBC Television Affiliates at vi-vii, 19-20, 21-22 (“ABC/CBS/NBC |
|
Affiliates Reply Comments”). |
|
63 Public Knowledge Comments at 4; see ABC/CBS/NBC Affiliates Reply Comments at vi-vii, 18-20, 21-22. See |
|
also DIRECTV Comments at 6 (quoting Atlantic Cleaners & Dyers, Inc. v. U.S., 286 U.S. 427, 433 (1932) and |
|
Environmental Defense Fund v. Duke Energy Corp., 549 U.S. 561, 575-76 (2007); Sky Angel Comments at 23-24. |
|
But see Cablevision Comments at 6, 12 (“Generally, where a term is defined in a statute, the Commission is not free |
|
to ignore that defined term, even when it appears in other provisions of the statute.”) (citing Sorenson v. Secretary of |
|
Treasury, 475 U.S. 851, 860 (1986) and United States v. Altamirano-Quintero, 511 F. 3d 1087, 1101 (10th Cir. |
|
2007) (explaining that where a term is defined in the statute, “we typically apply the same meaning to the term each |
|
time it appears in the statute”)); Discovery Comments at 3 (“Although the definition of ‘channel’ refers only to |
|
‘cable systems,’ Congress is presumed to have been aware of the definition of ‘channel’ when it used that term in |
|
defining MVPD, and to have used the term deliberately.”); NCTA Reply Comments at 2 (noting the “wellestablished |
|
(and Supreme Court-endorsed) canon of statutory construction that ‘[a]s a rule, ‘[a] definition which |
|
declares what a term ‘means’ . . . excludes any meaning that is not stated.’’”) (quoting Colautti v. Franklin, 439 U.S. |
|
379, 393 (1979) (quoting 2A C. Sands, Statutes and Statutory Construction § 47.07 (4th ed. Supp. 1978))); see also |
|
Comcast/NBCU Reply Comments at 6-8. |
|
64 See S. Rep. No. 102-92 (1991), at 24, reprinted in 1992 U.S.C.C.A.N. 1133, 1157 (“[T]here are certain major |
|
programmers that are more able to fend for themselves. It is difficult to believe a cable system would not carry the |
|
sports channel, ESPN, or the news channel, CNN.”) (emphasis added); see also ABC/CBS/NBC Affiliates |
|
Comments at 9. But see TWC Comments at 5 (noting that Congress referred to “networks” in the 1992 Cable Act |
|
and its legislative history, which it claims undermines the position that Congress would have used the defined term |
|
“channel” when it actually intended to refer to a “network.”) (citing 47 U.S.C. §§ 534(b)(2)(B), (b)(5), 535(b)(3)(C), |
|
(f), 548(c)(3)(B); H.R. Rep. No. 102-628, at 28, 31, 40-41 (1992); S. Rep. No. 102-92 (1991), reprinted in 1992 |
|
U.S.C.C.A.N. 1133, 1144, 1158, 1162, 1168). |
|
65 See ABC/CBS/NBC Affiliates Reply Comments at 19-20 (“When a viewer says that her favorite channel is |
|
‘Channel 5,’ she certainly does not mean that her favorite swath of spectrum is 76 MHz to 82 MHz.”) (emphasis in |
|
original); DIRECTV Reply Comments at 5 (“MVPDs commonly post a ‘Channel Lineup’ that lists the programming |
|
networks they carry, not the six megahertz of bandwidth into which their systems have been divided. . . . [M]any |
|
networks [] call themselves ‘Channel,’ [such as] ‘Discovery Channel.’”); see also Public Knowledge Comments at |
|
11; Sky Angel Reply Comments at 28; but see Cablevision Comments at 13. Federal Communications Commission FCC 14-210 |
|
14 |
|
Commission.68 |
|
Because the term “channel” as used in the definition of MVPD is ambiguous, we |
|
tentatively conclude that it is reasonable to read the term to have its common, everyday meaning of a |
|
stream of prescheduled video programming when we interpret the definition of MVPD. As discussed |
|
above, we believe our proposed interpretation is most consistent with the Act’s goals of increased video |
|
competition and broadband deployment.69 In addition, we believe that it is most consistent with consumer |
|
expectations because consumers are focused on the content they receive, rather than the specific method |
|
used to deliver it to them. |
|
70 |
|
We seek comment on this tentative conclusion. |
|
25. Scope of the Linear Programming Interpretation. We also seek comment on whether, |
|
under the Linear Programming Interpretation, we can and should carve out certain types of entities that |
|
make available multiple linear streams of video programming from the MVPD definition. If we interpret |
|
“multiple channels of video programming” to mean multiple linear streams of video programming, could |
|
we, consistent with the statute, narrow the category of entities that would qualify as MVPDs? For |
|
example, are there niche online subscription programming providers or other small entities that would not |
|
be able to remain in business if they qualify as MVPDs? A “multichannel” video programming |
|
distributor is required by definition to make multiple channels of video programming available. We seek |
|
comment on how to interpret the term “multiple” in the definition of MVPD.71 Although we believe it is |
|
important to modernize our interpretation of MVPD to capture entities that provide service similar to or |
|
competitive with more traditional MVPD service but through new distribution methods, we also wish to |
|
ensure that our rules do not impede innovation by imposing regulations on business models that may be |
|
better left to develop unfettered by the rules applicable to MVPDs. Should we interpret the term MVPD |
|
to require that a certain number of channels of video programming, such as twenty, be made available?72 |
|
|
|
Would twenty channels be too low or too high? Is there justification for a different number? What if an |
|
entity makes multiple channels available nationwide, but makes only one channel available for purchase |
|
to each subscriber?73 |
|
Should we interpret the term “channels of video programming” to require a certain |
|
(Continued from previous page) |
|
66 See Public Knowledge Comments at 7 (citing Oxford English Dictionary); ABC/CBS/NBC Affiliates Reply |
|
Comments at 19-20; but see Cablevision Comments at 13-14 (citing Merriam-Webster Dictionary and American |
|
Heritage Dictionary); Discovery Comments at 7 (citing Webster’s II New College Dictionary). |
|
67 See Sky Angel Comments at 25-28 (providing 23 references to the legislative history of the 1992 Cable Act in |
|
which members of Congress referred to a “channel” as a video programming network); ABC/CBS/NBC Affiliates |
|
Comments at 9; ABC/CBS/NBC Affiliates Reply Comments at 20-21; but see Discovery Comments at 7-8 |
|
(providing examples from the U.S. Code where the term “channel” refers to a pathway); ACA Comments at 20; |
|
TWC Comments at 5. |
|
68 See ABC/CBS/NBC Affiliates Comments at 9; DIRECTV Comments at 11; Public Knowledge Comments at 5-7; |
|
Sky Angel Comments at 28-31; but see Cablevision Comments at 14-15. |
|
69 See supra ¶ 23 (discussing how this interpretation would further the 1992 Cable Act’s goal of increased |
|
“competition and diversity in the multichannel video programming market”). |
|
70 See Michiel Willems, Co-CEO of thePlatform: “TV Everywhere is the natural evolution” of subscription video, |
|
SNL KAGAN, Sept. 15, 2014, available at https://www.snl.com/interactivex/article.aspx?id=29204558&KPLT=6 |
|
(“We even see a growing interest from operators looking at ways to deliver live linear channels via the cloud in |
|
order to support consumer demand across devices.”); Advanced Television Systems and their Impact upon the |
|
Existing Television Broadcast Service, Sixth Further Notice Of Proposed Rulemaking, 11 FCC Rcd. 10968, 11000 |
|
(1996) (suggesting that, to viewers, “the term ‘channel’ implies a single stream of video programming.”). |
|
71 |
|
See Merriam-Webster definition of multiple, http://www.merriam-webster.com/dictionary/multiple (defining |
|
multiple to mean “more than one” but also “many, manifold”). See also infra ¶ 29 (seeking comment on the |
|
meaning of “multiple” in the context of the Transmission Path Interpretation). |
|
72 See id. |
|
73 For example, CBS recently launched an Internet-based linear subscription streaming service that provides |
|
subscribers with their local market’s CBS channel. At launch, each subscriber can access a single channel (the |
|
channel in the subscriber’s local market); the service launched in 14 different local markets. See Dylan Love, CBS |
|
(continued….)Federal Communications Commission FCC 14-210 |
|
15 |
|
number of programming hours per day or per week or to exempt certain niche programmers? Is there |
|
justification to require eighteen hours of programming per day, seven days per week, or some other |
|
number? We tentatively conclude that an entity that makes linear services available via the Internet is an |
|
MVPD, and our regulations apply to all of the MVPD’s video services. Are there other factors that we |
|
should consider? For example, should we exempt from the interpretation of linear programming discrete, |
|
intermittent events that occur at prescheduled times, such as live individual sporting events? While these |
|
events are prescheduled by the programming provider, they are presented sporadically, in contrast to most |
|
television channels that broadcast continuously throughout the day. If such events are considered linear |
|
programming, our proposed Linear Programming Interpretation would appear to apply to online |
|
subscription video packages that stream multiple sporting events, such as those offered by Major League |
|
Baseball, Major League Soccer, the National Basketball Association, and the National Hockey League.74 |
|
We seek comment on whether distributors of these types of services should be included within our |
|
interpretation of MVPD and, if not, on the statutory basis for excluding them and bright-line tests that we |
|
could use to evaluate whether such an exclusion would apply. |
|
26. We tentatively conclude that we should interpret MVPD so that the definition would not |
|
apply to a distributor that makes available only programming that it owns—for example, sports leagues or |
|
stand-alone program services like CBS’s new streaming service.75 |
|
A potential consequence of the Linear |
|
Programming Interpretation would be that a programmer that decides to sell two or more of its own |
|
programming networks directly to consumers online, either instead of or in addition to selling them |
|
through cable or DBS operators’ programming packages, might subject itself to the benefits and burdens |
|
of MVPD status. For example, if Disney were to offer, for purchase by subscribers, a package of linear |
|
feeds of the Disney Channel, Disney XD, and Disney Junior for online streaming to customers, would |
|
that make Disney an MVPD? Would this unduly limit consumer options? Would bringing such an |
|
offering into our MVPD regulations discourage innovation? We seek comment on our statutory authority |
|
to adopt our tentative conclusion. |
|
27. Under the Act, an entity is an MVPD only if it makes multiple channels of video |
|
programming “available for purchase.”76 |
|
We seek comment on what it means to make video |
|
programming available for purchase, particularly as that term would apply if we were to adopt our |
|
proposed Linear Programming Interpretation. We tentatively conclude that the term means making an |
|
offer to consumers to exchange video service for money. We seek comment on this tentative conclusion. |
|
Are there other forms of consideration that a consumer could use to purchase services? If a cable or |
|
satellite company offers its subscribers access to supplemental online linear video services without a |
|
separate charge, but as part of their paid television packages, does this offering constitute making the |
|
online services “available for purchase”?77 Do any cable or satellite companies charge subscribers for |
|
those services indirectly? Is there any way to trace general subscription fees specifically to supplemental |
|
online linear video services? We seek comment on how our proposed interpretation could affect new |
|
(Continued from previous page) |
|
On ‘All Access’: We're Not Disrupting Cable TV; Just Bolstering Local TV Stations, INTERNATIONAL BUSINESS |
|
TIMES (Oct. 17, 2014, 2:45PM), http://www.ibtimes.com/cbs-all-access-were-not-disrupting-cable-tv-justbolstering-local-tv-stations-1707086 |
|
(quoting a CBS executive’s description of the service: “We're not launching a |
|
national feed, you get your local market’s feed.”). |
|
74 See MLB.tv, http://mlb.mlb.com/mlb/subscriptions/; MLS Live, http://live.mlssoccer.com/mlsmdl/; What is NBA |
|
League Pass?, http://www.nba.com/nba_tv/league_pass.html; NHL GameCenter Live, |
|
https://gamecenter.nhl.com/nhlgc/secure/gclsignup?CMPID=GCL:vnty. |
|
75 See id.; CBS All Access FAQ, |
|
https://cbsi.secure.force.com/CBSi/knowledgehome_allaccess?referer=cbs.com/vod&categories=CBS_Entertainmen |
|
t%3AAll_Access |
|
76 47 U.S.C. § 522(13). |
|
77 See, e.g., Xfinity TV Go, http://xfinitytv.comcast.net/watch-live-tv; Time Warner Cable TWC TV, |
|
https://video2.timewarnercable.com/; DISH Anywhere, http://www.dishanywhere.com/.Federal Communications Commission FCC 14-210 |
|
16 |
|
business models that do not conform with the traditional monthly subscription model, and whether we |
|
should treat those business models on a case-by-case basis. |
|
28. We also seek comment on how our proposed interpretation would apply to entities that |
|
are located overseas but make linear video programming networks available for purchase in the United |
|
States over the Internet. An entity could meet the definition of MVPD under our proposed definition even |
|
if it has no physical presence in the United States.78 |
|
We tentatively conclude that the Commission should |
|
not assert jurisdiction over these entities. If commenters disagree, they should provide the authority under |
|
which the Commission could assert jurisdiction. If we assert jurisdiction solely over entities with a |
|
physical presence in the United States, will some Internet-based distributors of video programming locate |
|
their operations overseas to avoid Commission regulation? Would the alternative interpretation discussed |
|
below, which would consider an entity to be an MVPD only if it maintains control over a transmission |
|
path, avoid this result by requiring an MVPD to have a jurisdictional presence in the United States? |
|
2. Alternative “Transmission Path Interpretation” |
|
29. We seek comment also on an alternative approach that would interpret the term channel |
|
in this context as requiring a transmission path. This is the approach for which the Media Bureau |
|
expressed tentative support in denying Sky Angel’s standstill request. Citing the statutory definition of |
|
“channel” as “a portion of the electromagnetic frequency spectrum which is used in a cable system and |
|
which is capable of delivering a television channel,”79 the Media Bureau expressed the tentative view that |
|
the term “channel” as used in the definition of MVPD “appear[s] to include a transmission path as a |
|
necessary element.”80 |
|
Under this interpretation, we would not consider Internet-based linear video |
|
providers to be MVPDs unless they control at least some portion of the physical means by which the |
|
programming is delivered—for example, via a physical cable that the provider owns or via spectrum that |
|
the provider is licensed to use. We seek comment on the Transmission Path Interpretation. How would |
|
we reconcile the Transmission Path Interpretation with previous Commission decisions that held that an |
|
entity need not own or operate the facilities that it uses to distribute video programming to qualify as an |
|
MVPD?81 |
|
Would an entity have to make available multiple transmission paths (or, using the language in |
|
the definition of “channel,” multiple “portions of the electromagnetic frequency spectrum”) to each |
|
subscriber or customer to qualify as an MVPD? Do all traditional MVPDs make available multiple |
|
“portions of the electromagnetic frequency spectrum” to each subscriber or customer, including cable |
|
|
|
78 See Comcast Comments at 13 n.45; NCTA Reply Comments at 7 (raising the question of how the Commission |
|
would enforce rules against foreign entities). |
|
79 47 U.S.C. § 522(4) (emphasis added). The Commission’s regulations also define a “cable television channel” as a |
|
“signaling path provided by a cable television system.” 47 C.F.R. § 76.5(r)-(u). |
|
80 Sky Angel Standstill Denial, 25 FCC Rcd at 3882-83, ¶ 7. Based on the limited record at the time, the Media |
|
Bureau found that Sky Angel did not appear to provide its subscribers with a transmission path; rather, it is the Sky |
|
Angel subscriber’s Internet service provider that provides the transmission path. See id. |
|
81 See Implementation of Section 302 of the Telecommunications Act of 1996, Third Report and Order and Second |
|
Order on Reconsideration, 11 FCC Rcd 20227, 20301, ¶ 171 (1996) (“[W]e find Rainbow’s argument that video |
|
programming providers cannot qualify as MVPDs because they may not operate the vehicle for distribution to be |
|
unsupported by the plain language of Section 602(13), which imposes no such requirement.”) (“OVS Second Order |
|
on Recon”); see also Implementation of Sections of the Cable Television Consumer Protection and Competition Act |
|
of 1992: Rate Regulation, Report and Order and Further Notice of Proposed Rulemaking, 8 FCC Rcd 5631, 5651- |
|
52, ¶ 23 (1993) (“TCI asserts that, by including television receive-only satellite programming distributors in the |
|
definition of a multichannel video programming distributor, Congress showed that a distributor need not be |
|
facilities-based in order to come within the scope of the effective competition test. We agree with TCI that a |
|
qualifying distributor need not own its own basic transmission and distribution facilities.”) (“1993 Rate Regulation |
|
Order”). Federal Communications Commission FCC 14-210 |
|
17 |
|
operators using switched digital video (“SDV”) technology82 or an IP-based system in which no unique |
|
transmission path is associated with any video programming stream? |
|
83 |
|
Is there a reasonable basis to |
|
believe that Congress intended to regulate as MVPDs only those entities that make available two or more |
|
transmission paths to each subscriber or customer, but not those that make available only one |
|
transmission path? If we adopt the Transmission Path Interpretation, how can we ensure that our |
|
regulations keep up with technology, particularly as incumbent MVPDs transition their services to |
|
Internet delivery? |
|
30. We also seek comment on whether Congress intended to promote only facilities-based |
|
competition in the video distribution market, which might support the Transmission Path Interpretation. |
|
The Conference Report accompanying the 1992 Cable Act includes a statement that Congress intended to |
|
promote “facilities-based” competition.84 |
|
Moreover, the Commission has previously stated that |
|
“‘[f]acilities-based competition’ is a term used in the legislative history of the Act to emphasize that |
|
program competition can only become possible if alternative facilities to deliver programming to |
|
subscribers are first created. The focus in the 1992 Cable Act is on assuring that facilities-based |
|
competition develops.”85 |
|
On the other hand, the ABC/CBS/NBC Affiliates note that “there is but one |
|
reference to ‘facilities-based competition’ in the lengthy House Report. . . . Certainly, that single |
|
reference cannot support the incorporation of a ‘transmission path’ requirement into a statutory definition |
|
that does not, on its face, contain any such restriction.”86 |
|
Accordingly, we seek comment on whether |
|
Congress sought to increase facilities-based competition exclusively, or sought to encourage competition |
|
to incumbent cable operators more generally, regardless of how the competitive service is delivered. |
|
31. Scope of the Transmission Path Interpretation. As we note above, incumbent MVPDs |
|
are obtaining rights to distribute content online at a rapid pace and appear prepared to launch online linear |
|
video services that are not tied to their facilities.87 |
|
We seek comment on our regulatory authority under |
|
|
|
82 SDV is “a method of delivering programming to subscribers only when those subscribers actively request that |
|
programming, as opposed to delivering all programming feeds at the same time to all subscribers.” Annual |
|
Assessment of the Status of Competition in the Market for Delivery of Video Programming, Notice of Inquiry, 24 |
|
FCC Rcd 750, 764, ¶ 30 (2009); Carriage of Digital Television Broadcast Signals, Third Report and Order and |
|
Third Further Notice of Proposed Rulemaking, 22 FCC Rcd 21064, 21095, ¶ 60 (2007); see also Sky Angel |
|
Comments at 22 (claiming that requiring an entity to provide “multiple transmission paths” would exclude cable |
|
systems that rely on SDV technology, because these systems “transmit only a single ‘cable channel’ . . . to each |
|
home rather than simultaneously transmit ‘multiple channels’ to every subscriber”); Sky Angel Reply Comments at |
|
29 (same). |
|
83 See AT&T Reply Comments at 2-3 (“[I]n an IP-based network/system, such as our own Uverse TV service, which |
|
is an MVPD service, there is no unique ‘transmission path’ associated with any particular ‘channel’ or programming |
|
stream, or over which programming packets are routed. Rather, the packets of multiple programming streams (or |
|
channels) share the same transmission path – often at the same time (such as when multiple viewers in a home are |
|
watching different channels at the same time).”). |
|
84 See H.R. Rep. No. 102-862 (1992) (Conf. Rep.), at 93, reprinted in 1992 U.S.C.C.A.N. 1231, 1275 (discussing the |
|
program access provision of the 1992 Cable Act and stating that the “conferees intend that the Commission shall |
|
encourage arrangements which promote the development of new technologies providing facilities-based competition |
|
to cable and extending programming to areas not served by cable”). |
|
85 Implementation of Sections 12 and 19 of the Cable Television Consumer Protection and Competition Act of 1992: |
|
Development of Competition and Diversity in Video Programming Distribution and Carriage, First Report and |
|
Order, 8 FCC Rcd 3359, 3384, n.79 (1993) (“1993 Program Access Order”). |
|
86 ABC/CBS/NBC Affiliates Reply Comments at 10-11 (emphasis in original). See also Sky Angel Reply |
|
Comments at 16. |
|
87 See supra n.1.Federal Communications Commission FCC 14-210 |
|
18 |
|
the Transmission Path Interpretation in these cases. |
|
88 |
|
The Transmission Path Interpretation seems |
|
difficult to apply in certain cases because an entity’s status would change depending on how and where |
|
the subscriber receives the content. For example, consider a subscriber who views video at her home on a |
|
tablet over broadband infrastructure that the video distributor owns, and then visits a local coffee shop |
|
and views video on that same tablet via the Internet using broadband infrastructure that the video |
|
distributor does not own. In that case, the video provider would be an MVPD at the subscriber’s home, |
|
but not at the coffee shop. We believe that this would lead to regulatory uncertainty, thus providing more |
|
support for the Linear Programming Interpretation. We seek comment on this analysis. |
|
32. We invite comment on any other interpretation the Commission should consider in |
|
addition to the Linear Programming Interpretation and the Transmission Path Interpretation. |
|
B. Regulatory Implications of Alternative Interpretations |
|
33. Below, we seek comment on the policy ramifications of the various interpretations set |
|
forth above. To the extent possible, we encourage commenters to quantify any costs and benefits and |
|
submit supporting data. In addition to the specific effects that we ask about below, we invite commenters |
|
to identify other possible effects of the Linear Programming Interpretation and the Transmission Path |
|
Interpretation and how those effects should influence our interpretation. |
|
34. We realize that under our proposed Linear Programming Interpretation, several new and |
|
planned services may be considered MVPD services. On the one hand, DISH, Sony, and Verizon have |
|
each announced linear Internet-based subscription video services whose launch is imminent.89 These |
|
services reportedly will carry programming from some of the largest content companies in the world.90 |
|
|
|
On the other hand, Aereo, FilmOn, and Sky Angel launched or planned to launch Internet-based |
|
subscription video services, but they claim that regulatory uncertainty has limited their ability to develop |
|
a subscriber base, limited investment in their services, and hindered their ability to compete.91 In light of |
|
these contrasting examples, we seek comment on whether the privileges and obligations set forth in this |
|
section tilt in favor of or against our proposed Linear Programming Interpretation. Would the proposal (i) |
|
give innovative companies access to programming that consumers want, or (ii) unduly and unnecessarily |
|
burden companies seeking to offer innovative new services? |
|
1. Application of MVPD-Specific Regulatory Privileges and Obligations to |
|
Internet-Based Distributors of Video Programming |
|
35. As discussed in further detail below, our proposed interpretation would ensure that |
|
incumbent MVPDs do not evade our regulations by migrating their services to the Internet. It would also |
|
allow Internet-based distributors of video programming, including those that do not control any facilities, |
|
|
|
88 We also seek comment below on our tentative conclusion that video programming services that a cable operator |
|
may offer over the Internet should not be regulated as cable services, but rather as non-cable MVPD services. See |
|
infra ¶ 78. |
|
89 See supra n.1. |
|
90 See Lance Whitney, Sony to launch PlayStation Vue, an online TV service that challenges cable, CNET (Nov. 13, |
|
2014, 7:02 AM), http://www.cnet.com/news/sony-to-launch-online-tv-service-to-challenge-cable-tv/; David |
|
Lieberman, Scripps Networks Agrees To Supply Channels To Dish Network’s Planned Streaming Video Service, |
|
DEADLINE (Sept. 16, 2014), http://deadline.com/2014/09/scripps-networks-offers-channels-dish-streaming-service- |
|
834957/; Chris Welch, Verizon's internet TV service coming in mid-2015, may let you pick only channels you want, |
|
THE VERGE (Sept. 11, 2014, 11:37 AM), http://www.theverge.com/2014/9/11/6135737/verizon-internet-tv-comingmid-2015. |
|
|
|
91 See Letter from Rebecca Rini, Counsel to FilmOnX, LLC, to Marlene H. Dortch, Secretary, Federal |
|
Communications Commission, MB Docket No. 12-83, at 2 (Nov. 10, 2014); Letter from Seth D. Greenstein, |
|
Counsel to Aereo, to Marlene Dortch, Secretary, Federal Communications Commission, MB Docket No. 12-83, at |
|
2-3 (Oct. 10, 2014); Supplemental Comments of Sky Angel U.S. at 1-2, MB Docket No. 12-80 (filed June 10, 2014).Federal Communications Commission FCC 14-210 |
|
19 |
|
to take advantage of the privileges of MVPD status but would also require them to comply with the legal |
|
obligations applicable to MVPDs. Conversely, the Transmission Path Interpretation could allow many if |
|
not most Internet-based distributors of video programming to avoid regulation, including obligations that |
|
promote important public interest benefits, and would also deprive them of certain regulatory privileges. |
|
We seek comment on these policy ramifications below. |
|
a. General Privileges and Obligations |
|
36. An entity that meets the definition of an MVPD is subject to both privileges and legal |
|
obligations under the Communications Act and the Commission’s rules. The regulatory privileges of |
|
MVPD status include the right to seek relief under the program access rules92 and the retransmission |
|
consent rules.93 |
|
Among the regulatory obligations of MVPDs are statutory and regulatory requirements |
|
relating to (i) program carriage;94 (ii) the competitive availability of navigation devices (including the |
|
integration ban);95 (iii) good faith negotiation with broadcasters for retransmission consent;96 (iv) Equal |
|
Employment Opportunity (“EEO”);97 (v) closed captioning;98 (vi) video description;99 (vii) access to |
|
emergency information;100 (vi) signal leakage;101 (vii) inside wiring; |
|
102 and (viii) the loudness of |
|
commercials.103 |
|
37. To the extent that an Internet-based distributor of video programming falls within the |
|
definition of an MVPD, it will be able to take advantage of the privileges of MVPD status but will also be |
|
subject to MVPD obligations, unless the Commission waives some or all of them if authorized to do so. |
|
We seek comment on the overall costs and benefits of applying these regulatory privileges and |
|
obligations to Internet-based distributors of video programming, including incumbent operators who |
|
migrate to Internet delivery. We also seek comment on specific privileges and obligations below. Would |
|
waiver or exemption from certain regulations be an appropriate approach for regulating Internet-based |
|
distributors? If so, what regulations should be waived or modified to exempt Internet-based distributors, |
|
and do we have authority to do so under the Act? Alternatively, does the statute permit us to allow these |
|
entities to choose whether they wish to be classified as MVPDs? |
|
|
|
92 See 47 U.S.C. § 548; 47 C.F.R. §§ 76.1000-1004. Among other things, these rules require cable-affiliated |
|
programmers to make their programming available to MVPDs on nondiscriminatory rates, terms, and conditions. |
|
93 See 47 U.S.C. § 325(b)(3)(C)(ii); 47 C.F.R. § 76.65. Among other things, these rules require broadcasters to |
|
negotiate in good faith with MVPDs for retransmission consent. |
|
94 See 47 U.S.C. § 536; 47 C.F.R. §§ 76.1300-1302. |
|
95 See 47 U.S.C. § 549; 47 C.F.R. §§ 76.1200-1210. |
|
96 See 47 U.S.C. § 325(b)(3)(C)(iii); 47 C.F.R. § 76.65(b). |
|
97 See 47 C.F.R. §§ 76.71-79, 76.1792, 76.1802. |
|
98 See 47 C.F.R. § 79.1. We note, however, that video programming delivered via Internet protocol is subject to |
|
separate closed captioning obligations under 47 C.F.R. § 79.4. |
|
99 See 47 C.F.R. § 79.3. |
|
100 See 47 C.F.R. § 79.2. |
|
101 See 47 C.F.R. § 76.610; see also 47 C.F.R. §§ 76.605(a)(12), 76.611, 76.614, 76.1803; 1.1705(a)(1) (FCC Form |
|
320 – Basic Signal Leakage Performance Report). These rules apply only to the extent that aeronautical frequencies |
|
are used. |
|
102 See 47 C.F.R. §§ 76.800-806. These rules apply only to the extent the MVPD owns inside wiring. |
|
103 See Commercial Advertisement Loudness Mitigation (“CALM”), Pub. L. No. 111-311, 124 Stat. 3294 (2010) |
|
(codified at 47 U.S.C. § 621); see also 47 C.F.R. § 76.607; Implementation of the Commercial Advertisement |
|
Loudness Mitigation (CALM) Act, Report and Order, 26 FCC Rcd 17222 (2011).Federal Communications Commission FCC 14-210 |
|
20 |
|
38. Would subjecting Internet-based distributors to MVPD regulations deter investment in |
|
new technologies and drive some current or prospective Internet-based distributors from the market?104 |
|
|
|
On the other hand, would subjecting Internet-based distributors to MVPD regulations provide regulatory |
|
certainty that could reassure consumers and spur investment by service providers? To what extent should |
|
we consider increasing consumer adoption of non-traditional MVPDs as a factor in regulatory treatment |
|
of entities that provide similar services but use different delivery mechanisms? |
|
105 |
|
If Internet-based |
|
distributors compete with traditional MVPDs, |
|
106 should they be subject to the same regulatory obligations |
|
as traditional MVPDs? |
|
107 |
|
|
|
b. Specific Privileges and Obligations |
|
(i) Privileges |
|
39. Below, we seek comment on the specific privileges of MVPD status and how they would |
|
apply to Internet-based distributors of video programming. Would applying the privileges of MVPD |
|
status to Internet-based distributors of video programming impose costs on third parties, such as cableaffiliated |
|
programmers and broadcasters? To what extent would the public be harmed if these privileges |
|
did not extend to Internet-based distributors of video programming? |
|
(a) Program Access |
|
40. As required by Section 628 of the Act, the Commission’s program access rules provide |
|
certain protections to MVPDs in their efforts to license cable-affiliated programming.108 |
|
These rules: (i) |
|
prohibit a cable operator or its affiliated, satellite-delivered programmer from engaging in “unfair |
|
methods of competition or unfair or deceptive acts or practices” that have the “purpose or effect” of |
|
|
|
104 See CCIA Comments at 4-5; Open Internet Coalition Comments at 5; Google Reply Comments at 3 n.11 (arguing |
|
that imposing MVPD requirements on online video companies will damage the still-developing market for those |
|
services); see also MPAA Comments at 3-4; Verizon Comments at 1-2; Comcast/NBCU Reply Comments at 11; |
|
Discovery Reply Comments at 3-5; but see Sky Angel Reply Comments at 35-36 (stating that commenters “greatly |
|
exaggerate” the burdens of regulations applicable to MVPDs). |
|
105 See DIRECTV Comments at 15-16 (“[T]he Commission must recognize the rapidly developing capabilities of |
|
OVDs and other new-entrant MVPDs which are becoming true competitors to traditional MVPDs. . . . Nontraditional |
|
MVPDs have gone from mere curiosities to emerging competitors in a very short period of time, and |
|
continue to develop rapidly as the speed and ubiquity of broadband infrastructure improves. In these circumstances, |
|
it is appropriate to apply core regulatory rights and responsibilities to both traditional and non-traditional MVPDs.”); |
|
DIRECTV Reply Comments at 7-8; Reply Comments of the National Association of Broadcasters at 2 (“NAB |
|
Reply”); Sky Angel Reply Comments at 34-35. |
|
106 The Commission has stated that online distributors of video programming “offer a tangible opportunity to bring |
|
customers substantial benefits” and that they “can provide and promote more programming choices, viewing |
|
flexibility, technological innovation and lower prices.” Comcast Corporation, General Electric Company and NBC |
|
Universal, Inc., Memorandum Opinion and Order, 26 FCC Rcd 4238, 4268-69, ¶ 78 (2011) (“Comcast/NBCU |
|
Order”). While the Commission concluded that consumers do not perceive online distributors as a substitute for |
|
traditional MVPD service, it stated that online distributors are a “potential competitive threat” and that they “must |
|
have a similar array of programming” if they are to “fully compete against a traditional MVPD.” Id. at 4269, ¶ 79, |
|
4272-73, ¶ 86; see also id. at 4266, ¶ 70 (“Without access to online content on competitive terms, an MVPD would |
|
suffer a distinct competitive disadvantage compared to Comcast, to the detriment of competition and consumers.”). |
|
107 We note that even if an Internet-based distributor qualifies as an MVPD it will not be subject to a number of |
|
regulations and statutory requirements applicable to cable and DBS operators unless it also qualifies as one of those |
|
services. See, e.g., 47 C.F.R. §§ 76.92, 76.122 (network non-duplication rules, which apply to cable operators) ; 47 |
|
U.S.C. §§ 338, 534, 535 (carry-one, carry-all and must carry requirements, which apply to DBS and cable operators, |
|
respectively); 47 U.S.C. § 315, 335(a), 47 C.F.R. §§ 76.205-206, 76.1611, 76.1701; 47 C.F.R. § 25.701(b)-(d) |
|
(political programming and candidate access obligations for DBS and cable operators). |
|
108 See 47 U.S.C. § 548.Federal Communications Commission FCC 14-210 |
|
21 |
|
“hinder[ing] significantly or prevent[ing]” an MVPD from providing programming to subscribers or |
|
consumers (the “unfair act” prohibition); |
|
109 (ii) prohibit a cable operator from unduly or improperly |
|
influencing the decision of its affiliated, satellite-delivered programmer to sell, or unduly or improperly |
|
influencing the programmer’s prices, terms, and conditions for the sale of, satellite-delivered |
|
programming to any unaffiliated MVPD (the “undue or improper influence” rule);110 and (iii) prohibit a |
|
cable-affiliated, satellite-delivered programmer from discriminating in the prices, terms, and conditions of |
|
sale or delivery of satellite-delivered programming among or between competing MVPDs (the “nondiscrimination” |
|
rule). |
|
111 |
|
To the extent that an MVPD believes that a cable-affiliated programmer has |
|
violated these rules, it may file a complaint with the Commission.112 |
|
|
|
41. If the program access rules were to apply, would cable-affiliated programmers be |
|
required to negotiate with and license programming to potentially large numbers of Internet-based |
|
distributors? |
|
113 |
|
How will this impact the value of cable-affiliated programming to traditional MVPDs, |
|
especially as compared to non-cable-affiliated programming? |
|
114 |
|
To the extent that licensing programming |
|
to a particular Internet-based distributor presents reasonable concerns about signal security and piracy, do |
|
the program access rules adequately address this issue by recognizing these concerns as a legitimate |
|
reason for a cable-affiliated programmer to withhold programming from an MVPD?115 |
|
Would extending |
|
the reach of the program access rules have a positive effect for consumers? |
|
|
|
109 See 47 U.S.C. § 548(b); 47 C.F.R. § 76.1001(a); Revision of the Commission’s Program Access Rules, Report |
|
and Order, 27 FCC Rcd 12605, 12640-45, ¶¶ 52-58 (2012) (“2012 Program Access Order”) (explaining the process |
|
for challenging exclusive contracts involving satellite-delivered, cable-affiliated programming pursuant to the unfair |
|
act prohibition); Review of the Commission’s Program Access Rules and Examination of Programming Tying |
|
Arrangements, First Report and Order, 25 FCC Rcd 746 (2010) (“2010 Program Access Order”), affirmed in part |
|
and vacated in part sub nom. Cablevision Sys. Corp. et al. v. FCC, 649 F.3d 695 (D.C. Cir. 2011) (“Cablevision II”) |
|
(establishing procedures for challenging allegedly unfair acts involving terrestrially delivered, cable-affiliated |
|
programming pursuant to the unfair act prohibition). |
|
110 See 47 U.S.C. § 548(c)(2)(A); 47 C.F.R. § 76.1002(a). |
|
111 See 47 U.S.C. § 548(c)(2)(B); 47 C.F.R. § 76.1002(b). |
|
112 See 47 U.S.C. § 548(d); 47 C.F.R. § 76.1003. |
|
113 See Comcast Comments at 11-12 (arguing that thousands of entities would make program access claims); NCTA |
|
Reply Comments at 6-7; but see DIRECTV Comments at 13; DIRECTV Reply Comments at 8; Sky Angel Reply |
|
Comments at 11-12 (asserting that few companies would qualify as MVPDs). |
|
114 See Discovery Comments at 13 (“Negotiated license fees between MVPDs and programmers today are based in |
|
part on an MVPD’s expectation of whether the availability of a network is likely to induce subscribers to use the |
|
MVPD’s services. While nearly every MVPD today faces competition from several other distributors, the number |
|
and popularity of those distributors is fairly easily identified and factored into the price as necessary. If the same |
|
programming network is available through an unknown and unlimited number of online sources, that network’s |
|
value to the facilities-based MVPD may be diminished, as may be the price the MVPD is willing to pay for it.”); |
|
Discovery Reply Comments at 5-7; Ovation Reply Comments at 4. |
|
115 See Cellularvision of New York, L.P. v. Sportschannel Associates, Order on Reconsideration, 11 FCC Rcd 3001, |
|
3003, ¶ 11 (Cable Servs. Bur., 1996) (“While the program access provisions clearly allow programmers to refuse to |
|
provide programming for a legitimate business reason, such as concerns about signal security, the Commission |
|
cannot simply defer to a programmer’s assessment of whether its concerns are reasonable.”); see also 47 U.S.C. § |
|
548(c)(2)(B)(i) (providing that the program access rule prohibiting discrimination does not preclude a cableaffiliated |
|
programmer from “imposing reasonable . . . standards regarding . . . technical quality”); 47 C.F.R. § |
|
76.1002(b)(1) (same). We also note that the statute provides permissible factors for programmers to consider when |
|
they set rates for programming. See Implementation of Sections 12 and 19 of the Cable Television Consumer |
|
Protection and Competition Act of 1992: Development of Competition and Diversity in Video Programming |
|
Distribution and Carriage, First Report and Order, 8 FCC Rcd 3359, 3364, ¶ 14 (1993) (“[W]e will find price |
|
discrimination to have occurred if the difference in the price charged to competing distributors is not explained by |
|
the statute’s permissible factors. In general terms, these factors involve (1) cost differences at the wholesale level in |
|
(continued….)Federal Communications Commission FCC 14-210 |
|
22 |
|
42. We also seek comment on whether and how our proposed rule and alternative |
|
interpretations would impact competition in the video distribution market (both at present and in the |
|
future), specifically with respect to the program access rules. |
|
116 |
|
Among other things, the program access |
|
rules are intended to prevent cable-affiliated programmers from discriminating among similarly situated |
|
MVPDs.117 |
|
If Internet-based distributors of video programming are deemed not to be MVPDs because |
|
they do not make available transmission paths (and therefore are ineligible for the benefits of the program |
|
access rules), would there be any regulatory or other constraint that would prevent a cable-affiliated |
|
programmer from making its affiliated programming available for online distribution to only certain |
|
Internet-based distributors of video programming, such as those owned by its affiliated cable operator, but |
|
not to those owned by other MVPDs? |
|
118 |
|
In such a scenario, because the cable-affiliated programmer |
|
would not be differentiating among “MVPDs,” would different treatment be permissible under the |
|
program access rules? How would this impact competition in the video distribution market? Cablevision |
|
contends that extending the program access rules to Internet-based distributors would give them too much |
|
flexibility compared to existing MVPD competitors. |
|
119 |
|
Is this a concern that we should consider, and if |
|
so, why? We note that the Commission receives few program access complaints; should this affect our |
|
analysis? Or does it reflect that programmers are following our program access rules and they are |
|
working? |
|
(b) Retransmission Consent |
|
43. Section 325(b) of the Act benefits MVPDs by requiring broadcasters to negotiate in good |
|
faith with MVPDs for retransmission consent120 and prohibiting broadcasters from negotiating exclusive |
|
retransmission consent agreements with any MVPD.121 |
|
Absent these provisions, broadcasters could |
|
potentially refuse to negotiate with and thereby withhold their signals from MVPDs that wish to carry |
|
(Continued from previous page) |
|
providing a program service to different distributors; (2) volume differences; (3) differences in creditworthiness, |
|
financial stability, or character; and (4) differences in the way the service is offered.”). |
|
116 See supra n.106 (discussing Internet-based distributors as a potential competitive threat to traditional MVPDs); |
|
see also Comments of the Writers Guild of America, West, Inc. at 4 (“Without including these new entities within |
|
the MVPD definition, vertically integrated MVPDs such as DirecTV, Comcast and Cablevision could opt to |
|
withhold their programming from new competitors.”) (“WGA-West Comments”); Sky Angel Comments at 36-39. |
|
117 See 47 U.S.C. § 548(c)(2)(B) (requiring the Commission to adopt regulations that “prohibit discrimination by a |
|
satellite cable programming vendor in which a cable operator has an attributable interest or by a satellite broadcast |
|
programming vendor in the prices, terms, and conditions of sale or delivery of satellite cable programming or |
|
satellite broadcast programming among or between cable systems, cable operators, or other multichannel video |
|
programming distributors, or their agents or buying groups . . . .”). |
|
118 We seek comment below on whether networks have the rights to license this programming for online distribution |
|
at all. See infra ¶¶ 67-69. |
|
119 See Cablevision Comments at 2 (arguing that “cable operators, saddled with legacy rules and business practices, |
|
could find [it] difficult to match” services offered by Internet-based services). But see Reply Comments of Public |
|
Knowledge at 9 (“online MVPDs will have capital and content costs like any others”); DIRECTV Comments at 13- |
|
14. |
|
120 See 47 U.S.C. § 325(b)(3)(C)(ii); 47 C.F.R. § 76.65. This provision also imposes a reciprocal obligation on |
|
MVPDs to negotiate in good faith with broadcasters for retransmission consent. See 47 U.S.C. § 325(b)(3)(C)(iii); |
|
47 C.F.R. § 76.65. We discuss this obligation below. See infra ¶¶ 50-53. |
|
121 See 47 U.S.C. § 325(b)(3)(C)(ii); 47 C.F.R. § 76.65(l).Federal Communications Commission FCC 14-210 |
|
23 |
|
these signals.122 |
|
To the extent that an MVPD believes that a broadcaster has violated these provisions, it |
|
may file a complaint with the Commission.123 |
|
44. We seek comment on the impact that our proposed interpretation of the definition of |
|
MVPD and alternative interpretations would have on the retransmission consent process. |
|
124 Under our |
|
proposal, would the retransmission consent rules force broadcasters to negotiate with and license their |
|
signals to potentially large numbers of Internet-based distributors? |
|
125 |
|
We seek comment also on whether |
|
and how competition in the video distribution market (both at present and in the future) would be |
|
impacted if Internet-based distributors of video programming are not considered MVPDs and therefore |
|
are not able to benefit from the retransmission consent rules. |
|
126 |
|
|
|
45. Section 325(b)(1)(A) of the Act provides that “no cable system or other multichannel |
|
video programming distributor” shall retransmit a broadcast signal without the broadcaster’s consent.127 |
|
|
|
But an entity wishing to retransmit a broadcast signal also must obtain authorization to publicly perform |
|
the copyrighted works within the broadcast signal.128 |
|
If we adopt the Linear Programming Interpretation |
|
and the Copyright Office does not afford statutory licenses to Internet-based video providers, how would |
|
we construe a broadcaster’s obligation to negotiate in good faith? What effect should the answer to that |
|
question have on our policy analysis? |
|
129 |
|
(ii) Obligations |
|
46. Below, we seek comment on specific obligations imposed on MVPDs and how those |
|
obligations would apply to Internet-based distributors of video programming. How costly would it be for |
|
Internet-based distributors of video programming to comply with these regulations? Would the public be |
|
harmed if these obligations did not extend to Internet-based distributors of video programming and such |
|
distribution became prevalent? |
|
47. The interpretation of MVPD that we ultimately adopt in this proceeding may subject |
|
certain Internet-based distributors of video programming to Commission regulation that are not currently |
|
subject to such regulation. What transition period should we allow these entities to come into compliance |
|
with each of the relevant rules? |
|
(a) Program Carriage |
|
48. The program carriage rules prohibit MVPDs from (i) requiring a financial interest in a |
|
video programming vendor’s program service as a condition for carriage;130 (ii) coercing a video |
|
|
|
122 Section 325(b)(1)(A) of the Act provides that “No cable system or other multichannel video programming |
|
distributor shall retransmit the signal of a broadcasting station, or any part thereof, except— (A) with the express |
|
authority of the originating station . . . .” 47 U.S.C. § 325(b)(1)(A). |
|
123 See 47 C.F.R. § 76.65(c). |
|
124 We seek comment below on how the interpretation of the definition of the MVPD will impact the statutory |
|
copyright licenses. See infra ¶ 66. |
|
125 See Comcast Comments at 11-12 (“If OVDs were deemed MVPDs . . . broadcasters potentially would face the |
|
prospect of having to negotiate retransmission consent agreements – and the duty to bargain in good faith – with |
|
thousands of OVDs. . . . [T]here are bound to be disputes that will lead to complaints at the Commission, |
|
undermining ongoing marketplace negotiations and burdening Commission staff and resources.”). |
|
126 See supra n.106 (discussing Internet-based distributors as a potential competitive threat to traditional MVPDs). |
|
127 47 U.S.C. § 325(b)(1)(A) (emphasis added); see also 47 C.F.R. § 76.64. |
|
128 17 U.S.C. §§ 106, 111; American Broadcasting Companies, Inc. v. Aereo, Inc., 134 S.Ct. 2498, 2507 (2014). |
|
129 See also infra ¶ 66. |
|
130 See 47 C.F.R. § 76.1301(a); see also 47 U.S.C. § 536(a)(1).Federal Communications Commission FCC 14-210 |
|
24 |
|
programming vendor to provide, or retaliating against a vendor for failing to provide, exclusive rights as a |
|
condition of carriage; 131 or (iii) unreasonably restraining the ability of an unaffiliated video programming |
|
vendor to compete fairly by discriminating in video programming distribution on the basis of affiliation or |
|
nonaffiliation of vendors in the selection, terms, or conditions for carriage.132 |
|
To the extent that a |
|
programming vendor believes that an MVPD is not in compliance with these rules, it may file a complaint |
|
with the Commission.133 |
|
|
|
49. What practical impact, if any, would these rules have on Internet-based distributors of |
|
video programming?134 |
|
As we note above, large, established cable operators, DBS providers, and |
|
technology companies have announced plans to launch Internet-based video programming services that |
|
would be MVPD services under the Linear Programming Interpretation.135 If these companies follow |
|
through with these plans, absent application of the program carriage rules there may be no regulatory |
|
constraint preventing them from demanding a financial interest or exclusive rights from programmers as a |
|
condition for carriage. |
|
136 Does this argue in favor of adopting an interpretation of MVPD that would |
|
cover providers of these services under the program carriage rules? Moreover, as more Internet-based |
|
distributors invest in their own programming, they may have an incentive to favor their affiliated |
|
programming over unaffiliated programming on the basis of affiliation. |
|
137 |
|
We seek comment on the effect |
|
that the alternative interpretations will have on negotiations with programmers and Internet-based video |
|
programming services. What are the costs and benefits of applying the program carriage obligations to |
|
Internet-based video programming services? |
|
(b) Retransmission Consent |
|
50. As discussed above, Section 325(b)(1)(A) of the Act provides that “No cable system or |
|
other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or |
|
any part thereof, except— (A) with the express authority of the originating station . . . .”138 |
|
Thus, to the |
|
extent that an Internet-based distributor of video programming qualifies as an MVPD, it must receive the |
|
consent of the broadcaster before retransmitting the broadcaster’s signal. Moreover, Section 325(b) of the |
|
Act imposes an obligation on MVPDs to negotiate in good faith with broadcasters in obtaining |
|
retransmission consent.139 |
|
If a broadcaster believes that an MVPD has violated these provisions, it may |
|
file a complaint with the Commission.140 |
|
|
|
|
|
131 See 47 C.F.R. § 76.1301(b); see also 47 U.S.C. § 536(a)(2). |
|
132 See 47 C.F.R. § 76.1301(c); see also 47 U.S.C. § 536(a)(3). |
|
133 See 47 U.S.C. § 536(a)(4); see also 47 C.F.R. § 76.1302. |
|
134 See Sky Angel Reply Comments at 35 (“The program carriage rules would have little, if any effect, because they |
|
do not mandate carriage.”). |
|
135 See supra n.1 (citing press reports that Sony, Dish Network, DIRECTV and Verizon each plan to launch online |
|
linear video services). |
|
136 See 47 C.F.R. § 76.1301(a)-(b); see also 47 U.S.C. § 536(a)(1)-(2). |
|
137 See Neil Irwin, Netflix vs. Amazon, and the New Economics of Television, THE NEW YORK TIMES, April 25, 2014, |
|
available at http://www.nytimes.com/2014/04/27/upshot/netflix-vs-amazon-and-the-new-economics-oftelevision.html?abt=0002&abg=0; |
|
47 C.F.R. § 76.1301(c); see also 47 U.S.C. § 536(a)(3). |
|
138 47 U.S.C. § 325(b)(1)(A) (emphasis added); see also 47 C.F.R. § 76.64. |
|
139 See 47 U.S.C. § 325(b)(3)(C)(iii); 47 C.F.R. § 76.65. This provision also imposes a reciprocal obligation on |
|
broadcasters to negotiate in good faith with MVPDs for retransmission consent. See 47 U.S.C. § 325(b)(3)(C)(ii); |
|
47 C.F.R. § 76.65. We discuss this obligation in greater detail above. See supra ¶¶ 43-45. |
|
140 See 47 C.F.R. § 76.65(c). Federal Communications Commission FCC 14-210 |
|
25 |
|
51. We seek comment above on how the retransmission consent rules can benefit MVPDs, as |
|
we propose to interpret that term. We now seek comment on the practical impact the obligations of |
|
MVPDs under the retransmission consent rules would have on Internet-based distributors of video |
|
programming that qualify as MVPDs. What impact will the obligation to negotiate in good faith with |
|
broadcasters have on the resources of Internet-based distributors of video programming that qualify as |
|
MVPDs? In particular, will Internet-based distributors of video programming that operate on a |
|
nationwide basis have to engage in negotiations with thousands of broadcasters throughout the nation? |
|
52. Are some Internet-based distributors of video programming likely to prefer not to carry |
|
broadcast signals? For example, to the extent that an Internet-based provider provides service nationwide |
|
it may prefer not to offer local content. In that case, would the good faith negotiation requirements allow |
|
these distributors to simply reject all carriage terms offered by a broadcaster and to refrain from making |
|
any carriage offers of their own? Or, would this conduct amount to a violation of the duty to negotiate in |
|
good faith? 141 |
|
Would it matter whether the distributor declined to negotiate with any broadcast stations? |
|
How will the answers to these questions impact the business models of Internet-based distributors of |
|
video programming that qualify as MVPDs but would prefer not to carry broadcast signals? Is it likely or |
|
possible that Internet-based distributors will want to carry broadcast network programming, or to carry |
|
broadcast stations nationwide? |
|
53. How do network affiliation agreements impact the carriage of broadcast stations on |
|
Internet-based MVPDs? Specifically, to what extent do existing network affiliation agreements limit or |
|
prohibit local network stations’ ability to grant retransmission consent rights to Internet-based MVPDs?142 |
|
|
|
Would limiting or prohibiting these provisions harm localism? |
|
(c) Other MVPD Obligations |
|
54. Closed Captioning. Section 79.1 of the Commission’s rules (the “television closed |
|
captioning rules”) requires MVPDs143 to provide closed captioning, defined as the “visual display of the |
|
audio portion of video programming pursuant to the technical specifications set forth in this part.”144 |
|
|
|
Internet video services are not subject to these requirements.145 |
|
Internet-based distributors of video |
|
|
|
141 See 47 C.F.R. § 76.65(b)(1)(i) (providing that the refusal by a Negotiating Entity (defined to include an MVPD) |
|
to negotiate retransmission consent violates the Negotiating Entity’s duty to negotiate in good faith); 47 C.F.R. § |
|
76.65(b)(1)(iv) (providing that the refusal by a Negotiating Entity (defined to include an MVPD) to put forth more |
|
than a single, unilateral proposal violates the Negotiating Entity’s duty to negotiate in good faith); but see 47 C.F.R. |
|
§ 76.65(a)(2) (“If a television broadcast station or multichannel video programming distributor negotiates in |
|
accordance with the rules and procedures set forth in this section, failure to reach an agreement is not an indication |
|
of a failure to negotiate in good faith.”); 2005 Reciprocal Bargaining Order, 20 FCC Rcd at 10345, ¶ 14 |
|
(“[P]rovided that a party to a reciprocal bargaining negotiation complies with the requirements of the Commission’s |
|
rules, failure to reach agreement would not violate either Section 325(b)(3)(C) or Section 76.65 of the Commission’s |
|
rules. Accordingly, NCTA’s argument that the reciprocal bargaining obligation will lead to another form of must |
|
carry is incorrect.”); Sky Angel Reply Comments at 35 (claiming that the “retransmission consent rules do not |
|
mandate carriage, but rather simply require MVPDs to act in good faith while ensuring that broadcasters are |
|
adequately compensated for the retransmission of their signals”). |
|
142 For example, do any network affiliation agreements prohibit a local network-affiliated station from permitting the |
|
retransmission of the entirety of its signal over the Internet? Do they limit the retransmission of network |
|
programming over the Internet? |
|
143 See 47 C.F.R. § 79.1(a)(2). |
|
144 47 C.F.R. § 79.1(a)(4); see also 47 U.S.C. § 613. |
|
145 Closed Captioning and Video Description of Video Programming, Report and Order, 13 FCC Rcd 3272, 3385, ¶¶ |
|
249-51 (1997) (“[W]e recognize that there are issues that need to be addressed relating to the convergence of |
|
television receivers and computers and the growth of Internet video like programming that may need to be addressed |
|
in the future. . . . [W]e believe that further study of these issues relating to new technologies and captioning is |
|
needed.”); Implementation of the Child Safe Viewing Act, Report, 24 FCC Rcd 11413, 11478, ¶ 149 (2009).Federal Communications Commission FCC 14-210 |
|
26 |
|
programming, however, are subject to the Commission’s Internet protocol (“IP”) closed captioning |
|
requirements set forth in Section 79.4 of the Commission’s rules (the “IP closed captioning rules”) to the |
|
extent that they make video programming available directly to end users through a distribution method |
|
that uses IP.146 |
|
The IP closed captioning rules are narrower than the television closed captioning rules, |
|
insofar as the IP closed-captioning rules require closed captioning of IP-delivered video programming |
|
only if the programming is published or exhibited on television with captions,147 whereas the television |
|
closed captioning rules require closed captioning for all new nonexempt English- and Spanish-language |
|
video programming.148 |
|
The Commission has explained that the “IP closed captioning rules do not apply |
|
to traditional managed video services that MVPDs provide to their MVPD customers within their service |
|
footprint, regardless of the transmission protocol used; rather, such services are already subject to Section |
|
79.1 of the Commission’s rules.”149 To the extent that some Internet-based distributors of video |
|
programming qualify as MVPDs, how will this impact their obligations with respect to closed |
|
captioning?150 |
|
Will they be subject to Section 79.1 or 79.4 of the Commission’s rules, or will the |
|
Commission need to develop another set of requirements tailored to these services? |
|
151 Will we need to |
|
amend our closed captioning rules if we adopt the Linear Programming Interpretation, and if so, how? |
|
55. Video Description. As required by the CVAA,152 the Commission’s rules require MVPD |
|
systems that serve 50,000 or more subscribers to provide 50 hours per quarter of video description, which |
|
makes video programming accessible to people who are blind or visually impaired, |
|
153 on each of the five |
|
most popular nonbroadcast networks.154 |
|
In general, MVPDs of any size must pass through any video |
|
|
|
146 See Closed Captioning of Internet Protocol-Delivered Video Programming: Implementation of the Twenty-First |
|
Century Communications and Video Accessibility Act of 2010, Report and Order, 27 FCC Rcd 787 (2012) (“IP |
|
Closed Captioning Order”); see also 47 U.S.C. § 613(c); 47 C.F.R. § 79.4(a)(3). |
|
147 See 47 U.S.C. § 613(c)(2)(A); see also 47 C.F.R. § 79.4(b); IP Closed Captioning Order, 27 FCC Rcd at 804-05, |
|
¶ 25 (the IP closed captioning requirement “is triggered only after the programming has been shown on television |
|
with closed captions”). |
|
148 See 47 C.F.R. § 79.1(b); IP Closed Captioning Order, 27 FCC Rcd at 795-96, ¶ 11. See 47 C.F.R. § 79.1(b); IP |
|
Closed Captioning Order, 27 FCC Rcd at 795-96, ¶ 11. “New” programming refers to analog video programming |
|
first published or exhibited on or after January 1, 1998, or digital video programming first published or exhibited on |
|
or after July 1, 2002. 47 C.F.R. §§ 79.1(a)(5). The Commission’s television closed captioning rules also require |
|
closed captioning of 75% of a programming distributor’s pre-rule, nonexempt English and Spanish language |
|
programming that is distributed and exhibited on each channel during each calendar quarter. 47 C.F.R. §§ |
|
79.1(b)(2)(ii), (b)(4)(ii). “Pre-rule” programming refers to analog video programming first published or exhibited |
|
before January 1, 1998, or digital video programing first published or exhibited before July 1, 2002. 47 C.F.R. § |
|
79.1(a)(8). See 47 C.F.R. § 79.1(b); IP Closed Captioning Order, 27 FCC Rcd at 795-96, ¶ 11. |
|
149 See IP Closed Captioning Order, 27 FCC Rcd at 795-96, ¶ 11. |
|
150 Because the Commission to date has not determined the extent to which Internet-based distributors of video |
|
programming qualify as MVPDs (and thus would be covered by the television closed captioning rules), we expect |
|
that Internet-based distributors of video programming are currently complying with at least the IP closed captioning |
|
rules. |
|
151 See IP Closed Captioning Order, 27 FCC Rcd at 795-96, ¶ 11. |
|
152 See Twenty-First Century Communications and Video Accessibility Act of 2010, Pub. L. No. 111-260, Title II, § |
|
202(a), 124 Stat. 2751, 2767-70 (2010) (codified at 47 U.S.C. § 613(f)) (“CVAA”); see also 47 C.F.R. § 79.3; Video |
|
Description: Implementation of the Twenty-First Century Communications and Video Accessibility Act of 2010, |
|
Report and Order, 26 FCC Rcd 11847 (2011) (“Video Description Order”). |
|
153 Video description is defined as “the insertion of audio narrated descriptions of a television program’s key visual |
|
elements into natural pauses between the program’s dialogue.” 47 U.S.C. § 613(h)(1); 47 C.F.R. § 79.3(a)(3). |
|
154 47 C.F.R. § 79.3(b)(4). The top five national nonbroadcast networks for the purposes of these rules are USA, the |
|
Disney Channel, TNT, Nickelodeon, and TBS. See Video Description Order, 26 FCC Rcd at 11854, ¶ 13. This list |
|
will be updated on July 1, 2015 and at three-year intervals. See id. at 11857, ¶ 18; see also 47 C.F.R. § 79.3(b)(4).Federal Communications Commission FCC 14-210 |
|
27 |
|
description provided with programming they carry, including broadcast channels, as long as they have the |
|
technical capability to do so.155 |
|
Section 79.105 of the Commission’s rules requires apparatus designed to |
|
receive or play back video programming to decode and make available the secondary audio stream, if |
|
technically feasible, to facilitate the transmission and delivery of video description.156 |
|
We seek comment |
|
on the costs as well as the practical impact these obligations will have on an Internet-based distributor of |
|
video programming that qualifies as an MVPD.157 |
|
Are there attributes of Internet-based distributors of |
|
video programming that make compliance with these requirements more burdensome than for traditional |
|
MVPDs?158 |
|
We also seek comment on our authority to extend our video description regulations to |
|
Internet-delivered MVPDs under the Linear Programming Interpretation.159 |
|
Will we need to amend our |
|
video description rules if we adopt the Linear Programming Interpretation, and if so, how? |
|
56. Accessibility of Emergency Information. Section 79.2 of the Commission’s rules requires |
|
MVPDs to comply with certain requirements pertaining to the accessibility of emergency information by |
|
persons with disabilities.160 |
|
And to make emergency information accessible to individuals who are blind |
|
or visually impaired, Section 79.105 of the Commission’s rules requires apparatus designed to receive or |
|
play back video programming to decode and make available the secondary audio stream, if technically |
|
feasible.161 |
|
We seek comment on the costs as well as the practical impact these obligations will have on |
|
Internet-based distributors of video programming that qualify as MVPDs.162 Will we need to amend our |
|
emergency information accessibility rules if we adopt the Linear Programming Interpretation, and if so, |
|
how? |
|
57. Accessible User Interfaces, Guides, and Menus. Section 79.108 of the Commission’s |
|
rules requires MVPDs to “ensure that the on-screen text menus and guides provided by navigation |
|
devices for the display or selection of multichannel video programming are audibly accessible in real time |
|
upon request by individuals who are blind or visually impaired.” |
|
163 We seek comment on the costs and |
|
the practical impact these obligations will have on Internet-based distributors of video programming that |
|
|
|
155 47 C.F.R. § 79.3(b)(5). |
|
156 47 C.F.R. § 79.105. |
|
157 See Sky Angel Reply Comments at 36 (claiming that the video description rules are not burdensome because they |
|
“apply only to large MVPDs, and only with respect to the top-five non-broadcast networks” and because they “only |
|
require fifty hours of described programming per calendar quarter, and these descriptions likely will be provided by |
|
programmers, not MVPDs”). As noted above, all MVPDs, not just large ones, have certain pass-through |
|
obligations. |
|
158 In another proceeding arising under the CVAA, the Commission is considering whether MVPDs must comply |
|
with video description obligations when they allow subscribers to access linear programming on tablets, laptops, |
|
personal computers, smartphones, or similar devices. See Accessible Emergency Information, and Apparatus |
|
Requirements for Emergency Information and Video Description: Implementation Of The Twenty-First Century |
|
Communications And Video Accessibility Act Of 2010, Report and Order and Further Notice of Proposed |
|
Rulemaking, 28 FCC Rcd 4871, 4927-28, ¶¶ 83-84 (2013) (“Video Description Further Notice”). |
|
159 See Video Description: Implementation of the Twenty-First Century Communications and Video Accessibility Act |
|
of 2010, Report, 29 FCC Rcd 8011, 8012, n.2 (MB 2014) (“Video programming delivered using [IP] includes, but is |
|
not limited to, video programming that is available on the Internet . . . To the extent a multichannel video |
|
programming distributor [MVPD] uses IP to distribute its traditional managed video services to its MVPD |
|
customers within its service footprint, however, that service is subject to the existing video description rules that |
|
apply to MVPDs, notwithstanding the use of IP technology.”). |
|
160 See 47 C.F.R. § 79.2. |
|
161 See 47 C.F.R. § 79.105. |
|
162 The Commission is also considering this issue in the Video Description Further Notice. 28 FCC Rcd at 4926- |
|
4928, ¶¶ 80-84. |
|
163 47 C.F.R. § 79.108.Federal Communications Commission FCC 14-210 |
|
28 |
|
qualify as MVPDs, particularly in light of the fact that digital apparatus (aside from navigation devices) |
|
that are designed to receive digital video (including IP video) must be accessible to and useable by |
|
individuals who are blind or visually impaired.164 |
|
Will we need to amend our user interface accessibility |
|
rules if we adopt the Linear Programming Interpretation, and if so, how? |
|
58. Equal Employment Opportunities (“EEO”). The Commission’s EEO rules apply to |
|
MVPDs.165 |
|
In general terms, these rules (i) require MVPDs to provide equal opportunity in employment |
|
to all qualified persons and prohibit MVPDs from discriminating in employment based on race, color, |
|
religion, national origin, age, or sex;166 (ii) require MVPDs to engage in certain outreach and recruitment |
|
activities;167 and (iii) require MVPDs to comply with certain reporting and recordkeeping requirements.168 |
|
|
|
We seek comment on the practical impact these obligations will have on Internet-based distributors of |
|
video programming that qualify as MVPDs. Do Internet-based distributors of video programming |
|
currently meet some or all of these requirements?169 |
|
Will we need to amend our EEO rules if we adopt |
|
the Linear Programming Interpretation, and if so, how? |
|
59. Navigation Devices. Section 629 of the Act directs the Commission to adopt regulations |
|
to assure the commercial availability of navigation devices used by consumers to access services from |
|
MVPDs.170 |
|
The Commission has adopted several regulations that allow consumers to attach non-harmful |
|
devices to MVPD networks, require MVPDs to offer separate conditional access elements if they use |
|
navigation devices to perform conditional access functions, and prohibit MVPDs from using integrated |
|
conditional access in the devices that they lease or sell to their consumers.171 |
|
We seek comment on the |
|
practical impact as well as the costs these obligations will have on Internet-based distributors of video |
|
programming that qualify as MVPDs. To what extent do Internet-based distributors of video |
|
programming use navigation devices in the provision of their video programming service? If they do use |
|
such devices, do they currently meet these requirements? What devices do they use to provide |
|
programming to subscribers? Sky Angel, for example, states that its service cannot be viewed without its |
|
“proprietary set-top box, which Sky Angel directly and remotely controls at all times for purposes ranging |
|
from periodic service and software updates to service activation or termination.”172 |
|
Do Internet-based |
|
distributors meet the requirements for an exemption from the integration ban?173 |
|
Are there aspects of |
|
Internet-based video services that make compliance with these requirements more burdensome than for |
|
traditional MVPDs? Will we need to amend our navigation device rules if we adopt the Linear |
|
Programming Interpretation, and if so, how? |
|
|
|
164 47 C.F.R. § 79.107. |
|
165 See 47 U.S.C. § 554(h); 47 C.F.R. § 76.71(a); see also 47 C.F.R. § 25.601 (extending EEO obligations to DBS). |
|
166 See 47 U.S.C. § 554(b); 47 C.F.R. § 76.73(a); see also 47 U.S.C. § 554(c); 47 C.F.R. § 76.73(b). |
|
167 See 47 C.F.R. § 76.75(a)-(b), (e). |
|
168 See 47 C.F.R. §§ 76.75(c); 76.77(a), (d); 76.1702; 76.1802. |
|
169 Sky Angel claims that the Commission’s EEO requirements “are not oppressive, and in fact are less burdensome |
|
than many states’ generally applicable EEO laws.” Sky Angel Reply Comments at 36. |
|
170 See 47 U.S.C. § 549; 47 C.F.R. §§ 76.1200-1210. |
|
171 See 47 C.F.R. §§ 76.1201-76.1204 |
|
172 Sky Angel Comments at 19. |
|
173 See Sky Angel Reply Comments at 36 (claiming that, “although the navigation device requirement ‘nominally |
|
applies to all MVPDs,’ the Commission ‘has applied its rules only to cable operators’”). Despite Sky Angel’s claim, |
|
MVPDs are exempt from the integration ban if they support navigation devices that “operate throughout the |
|
continental United States” and are available from retail sources that are not affiliated with the MVPD. 47 C.F.R. § |
|
76.1204(a)(2)(ii). Many of the requirements in Sections 76.1200-76.1210 apply to MVPDs, and MVPDs that |
|
disregard those rules are subject to enforcement. Federal Communications Commission FCC 14-210 |
|
29 |
|
60. Signal Leakage. The Commission’s rules require specified MVPDs to comply with |
|
certain technical rules pertaining to signal leakage, |
|
174 as well as reporting175 and notification176 |
|
requirements related thereto.177 |
|
We expect that in general MVPDs that use Internet protocol to deliver |
|
video will not use aeronautical frequencies and thus will not be subject to these requirements. 178 We seek |
|
comment on this expectation, and any practical impact these obligations will have on Internet-based |
|
distributors of video programming that qualify as MVPDs. Will we need to amend our signal leakage |
|
rules if we adopt the Linear Programming Interpretation, and if so, how? |
|
61. Inside Wiring. The Commission’s cable inside wiring rules apply to all MVPDs.179 |
|
In |
|
general terms, these rules govern the disposition of home wiring180 and home run wiring181 after a |
|
subscriber terminates service. To what extent, if any, would these obligations affect Internet-based |
|
distributors of video programming that qualify as MVPDs, especially if they do not control the “last mile” |
|
of the transmission path used to deliver video programming to consumers but are affiliated with an entity |
|
that controls the transmission path? We expect that if we adopt the Linear Programming Interpretation |
|
that these inside wiring rules would not apply to Internet-based distributors of video programming. |
|
62. Commercial Loudness. As required by the CALM Act,182 the Commission’s rules require |
|
MVPDs to ensure that commercials are transmitted to consumers at an appropriate loudness level in |
|
accordance with a specified industry standard.183 |
|
Depending on the size of the MVPD and the type of the |
|
commercial at issue (i.e., inserted by the MVPD or embedded in the programing by a third-party), the |
|
Commission’s rules may require an MVPD to install equipment and associated software or perform spot |
|
checks or both.184 |
|
Do these requirements need to be modified to apply to Internet-based distributors of |
|
video programming that qualify as MVPDs, and if so, how? If the requirements do need to be modified, |
|
are there ways to make the rules less burdensome for Internet-based distributors of video programming |
|
while meeting our statutory mandates? |
|
|
|
174 See 47 C.F.R. § 76.610; see also 47 C.F.R. §§ 76.605(a)(12), 76.611, 76.612, 76.613, 76.614, 76.616, 76.617. |
|
175 See 47 C.F.R. §§ 76.1803 (signal leakage monitoring and reporting); 1.1705(a)(1) (FCC Form 320 – Basic Signal |
|
Leakage Performance Report). |
|
176 See 47 C.F.R. §§ 76.1804. |
|
177 The Commission is currently considering updating these rules to facilitate the transition from analog to digital |
|
transmission systems. See Cable Television Technical and Operational Requirements, Notice of Proposed |
|
Rulemaking, 27 FCC Rcd 9678 (2012). |
|
178 Section 76.610 provides that the specified Commission rules pertaining to signal leakage apply to “all MVPDs |
|
(cable and non-cable) transmitting carriers or other signal components carried at an average power level equal to or |
|
greater than 10-4 watts across a 25 kHz bandwidth in any 160 microsecond period, at any point in the cable |
|
distribution system in the frequency bands 108–137 and 225–400 MHz for any purpose.” 47 C.F.R. § 76.610. |
|
179 See 47 C.F.R. §§ 76.802(l), 76.804(f), 76.805, 76.806(d); see also 47 U.S.C. § 544(i). |
|
180 See 47 C.F.R. § 76.5(ll) (defining “cable home wiring” as the “internal wiring contained within the premises of a |
|
subscriber which begins at the demarcation point. Cable home wiring includes passive splitters on the subscriber’s |
|
side of the demarcation point, but does not include any active elements such as amplifiers, converter or decoder |
|
boxes, or remote control units.”). |
|
181 See 47 C.F.R. § 76.800(d) (defining “home run wiring” as the “wiring from the demarcation point to the point at |
|
which the MVPD’s wiring becomes devoted to an individual subscriber or individual loop”). |
|
182 See Pub. L. No. 111-311, 124 Stat. 3294 (2010) (codified at 47 U.S.C. § 621). |
|
183 See 47 C.F.R. § 76.607; Implementation of the Commercial Advertisement Loudness Mitigation (CALM) Act, |
|
Report and Order, 26 FCC Rcd 17222 (2011). |
|
184 See 47 C.F.R. § 76.607.Federal Communications Commission FCC 14-210 |
|
30 |
|
63. MDU Access. The Commission’s rules prohibit cable operators, common carriers (or |
|
their affiliates) that provide video programming, and OVS operators from enforcing or executing any |
|
provision in a contract that grants to it the exclusive right to provide any video programming service to a |
|
Multiple Dwelling Unit.185 |
|
The Commission has sought comment on whether to extend this prohibition to |
|
other MVPDs.186 |
|
To the extent the Commission were to do so, what impact, if any, would this prohibition |
|
have on Internet-based distributors of video programming that qualify as MVPDs? Is there any way a |
|
landlord could restrict a tenant’s ability to access certain content over the Internet to prevent a tenant from |
|
accessing an Internet-based linear video service? Will we need to amend our MDU access rules if we |
|
adopt the Linear Programming Interpretation, and if so, how? |
|
64. Other Regulatory Issues. We also seek comment on how other regulations should |
|
account for Internet-based distributors of video programming that qualify as MVPDs. For example, |
|
should we extend any cable or satellite-specific regulations to MVPDs more generally? If so, what would |
|
be our statutory basis for doing so? |
|
2. Impact on Content Owners |
|
65. As discussed in this section, our interpretation of the definition of an MVPD may impact |
|
content owners in their negotiations with broadcasters, cable networks, and MVPDs. We seek comment |
|
on these issues below. |
|
a. Broadcast Content |
|
66. Section 111 of the Copyright Act provides “cable systems” (as defined by the Copyright |
|
Act) a statutory license to retransmit copyrighted broadcast performances if the “cable system” pays a |
|
statutory fee for those performances.187 |
|
Some content creators and owners contend that the Commission, |
|
in interpreting the definition of MVPD in the Communications Act, should be cognizant of the interplay |
|
between Section 111 of the Copyright Act and the Communications Act188 and even suggest that a |
|
Commission decision interpreting the definition of MVPD to include Internet-based distributors would |
|
conflict with copyright law.189 |
|
But the market and legal landscape has changed significantly since content |
|
creators and owners made those claims. |
|
190 |
|
Therefore, we ask commenters to update the record with |
|
respect to how expanding the definition of MVPD in the Communications Act to include some Internetbased |
|
distributors interrelates with copyright law. |
|
|
|
185 See 47 C.F.R. § 76.2000(a); see also Exclusive Service Contracts for Provision of Video Services in Multiple |
|
Dwelling Units and Other Real Estate Developments, Report and Order and Further Notice of Proposed |
|
Rulemaking, 22 FCC Rcd 20235, 20260, ¶ 51 (2007) (“MDU Order and FNPRM”), aff’d sub nom. Nat’l Cable & |
|
Telecomm. Ass’n v. FCC, 567 F.3d 659 (D.C. Cir. 2009). The Commission’s rules provide that an “MDU shall |
|
include a multiple dwelling unit building (such as an apartment building, condominium building or cooperative) and |
|
any other centrally managed residential real estate development (such as a gated community, mobile home park, or |
|
garden apartment); provided however, that MDU shall not include time share units, academic campuses and |
|
dormitories, military bases, hotels, rooming houses, prisons, jails, halfway houses, hospitals, nursing homes or other |
|
assisted living facilities.” 47 C.F.R. § 76.2000(b). |
|
186 See MDU Order and FNPRM, 22 FCC Rcd at 20264-65, ¶¶ 61-62. |
|
187 17 U.S.C. § 111. |
|
188 See Cablevision Comments at 16; Comcast Comments at 2 n.4; MPAA Comments at 2; Disney Reply Comments |
|
at 5; Fox Reply Comments at 6. |
|
189 See Time Warner Reply Comments at 3; MPAA Comments at 3. |
|
190 See supra ¶¶ 10-11.Federal Communications Commission FCC 14-210 |
|
31 |
|
b. Cable-Affiliated Content |
|
67. Through application of the program access rules, Internet-based distributors that qualify |
|
as MVPDs will be entitled to non-discriminatory access to cable-affiliated networks. |
|
191 |
|
Generally |
|
speaking, a programmer licenses content from various content creators, aggregates the content into a |
|
network, and then licenses the network to MVPDs for distribution.192 |
|
Discovery claims, however, that |
|
cable-affiliated networks cannot license all of the content displayed on their networks for distribution on |
|
the Internet because they frequently do not possess the right to authorize Internet distribution of that |
|
content. |
|
193 |
|
Rather, Discovery argues that (i) content creators frequently retain for themselves the rights to |
|
Internet distribution in order to generate a separate revenue stream by displaying the content on their own |
|
websites or by selling the content to other video providers; |
|
194 and (ii) obtaining Internet distribution rights |
|
is simply too expensive for some networks.195 |
|
What effect should the Copyright Office’s decisions have |
|
on our statutory and policy analysis? |
|
68. To what extent do cable-affiliated networks possess – or have the ability to negotiate for |
|
– the right to authorize distribution of content displayed on their network over the Internet? If we adopt |
|
the Linear Video Interpretation, what impact does that have on existing rights for content distribution? |
|
We note that some cable-affiliated networks are made available over the Internet to authenticated MVPD |
|
subscribers. |
|
196 |
|
Does this reflect that cable-affiliated programmers possess the right to authorize |
|
distribution of content displayed on their network over the Internet?197 |
|
Does the concern about lack of |
|
rights to authorize Internet distribution of content apply only with respect to content not owned by the |
|
network? To what extent do cable-affiliated networks own the content displayed on their networks (or are |
|
affiliated with the content creators or otherwise possesses all of the rights with respect to distribution of |
|
that content)? To what extent is the content displayed on cable-affiliated networks owned by entities |
|
unaffiliated with the network? |
|
69. Would or should the adoption of the proposed definition of an MVPD have any effect on |
|
a cable-affiliated network that does not possess the right to authorize Internet distribution of content |
|
displayed on its network? In other words, would or should the network be required to obtain such rights |
|
to comply with the program access rules if certain Internet-based distributors qualify as MVPDs? We |
|
seek comment on how the resolution of this question would impact content creators, cable-affiliated |
|
programmers, and MVPDs, either traditional or Internet-based. We also seek comment on our authority |
|
to require entities to enter into contracts for these distribution rights. |
|
|
|
191 See supra ¶¶ 40-42. |
|
192 See Discovery Comments at 10. |
|
193 See Discovery Comments at 10; Discovery Reply Comments at 6. |
|
194 See Discovery Comments at 10; Discovery Reply Comments at 6. |
|
195 See Discovery Comments at 11; see also Ovation Reply Comments at 4. |
|
196 14th Annual Report, 27 FCC Rcd at 8612, ¶ 6 (describing “TV Everywhere” as “an MVPD initiative, which |
|
allows subscribers of certain services to access video programming on stationary and mobile Internet-connected |
|
devices, including television sets, computers, tablets, and smartphones”); id. at 8618, ¶ 21 n.30 (“TV Everywhere is |
|
an authentication system whereby certain movies and television shows are accessible online via a variety of display |
|
devices including personal computer, mobile, and television – but only if you can prove (or ‘authenticate’) that you |
|
have a subscription to an MVPD.”); id. at 8738, ¶ 287 (“TV Everywhere services allow MVPDs to compete with |
|
unaffiliated OVDs by providing free on-demand Internet video to authenticated MVPD customers.”). |
|
197 But see Comcast/NBCU Order, 26 FCC Rcd at 4280, ¶ 105 (“The Applicants further note that they may lack the |
|
rights necessary to provide certain programming online on an unauthenticated basis.”). Federal Communications Commission FCC 14-210 |
|
32 |
|
c. Non-Broadcast, Non-Cable-Affiliated Content |
|
70. If we were to require cable-affiliated networks to obtain Internet distribution rights from |
|
content creators to comply with the program access rules, what impact, if any, would or should this have |
|
on non-cable-affiliated networks? For example, Ovation claims that, if cable-affiliated networks are |
|
required to obtain Internet distribution rights, “marketplace pressures would foreseeably require other |
|
networks to do the same.”198 |
|
We seek comment on this concern. |
|
C. Regulatory Treatment of Cable Operators and DBS Providers that Provide Linear |
|
Video Services via IP |
|
71. It seems evident that merely using IP to deliver cable service does not alter the |
|
classification of a facility as a cable system or of an entity as a cable operator. That is, to the extent an |
|
operator may provide video programming services over its own facilities using IP delivery within its |
|
footprint it remains subject to regulation as a cable operator. At the same time, we understand that some |
|
cable operators and DBS providers are exploring new business models that might be indistinguishable |
|
from other over-the-top (“OTT”) services.199 |
|
As mentioned above, cable operators and DBS providers are |
|
obtaining rights for online distribution of content, and some have launched or may soon launch Internetbased |
|
video programming services.200 |
|
Below, we seek comment on the regulatory treatment of national |
|
OTT video services that a cable operator or DBS provider may provide nationally–as contrasted to the |
|
traditional services it offers. |
|
1. Cable Service Provided via IP Over the Operator’s Facilities |
|
72. The Act defines a cable operator as, essentially, an entity that provides cable service over |
|
a cable system.201 |
|
Thus, we must interpret the three terms – cable service, cable system, and cable |
|
operator – together to determine the proper regulatory treatment of IP-based services provided by cable |
|
operators. The Act defines cable service as “(A) the one-way transmission to subscribers of (i) video |
|
programming, or (ii) other programming service, and (B) subscriber interaction, if any, which is required |
|
for the selection or use of such video programming or other programming service.”202 The Commission |
|
and other authorities have previously concluded that the statute’s definition of “cable service” includes |
|
linear IP video service.203 |
|
|
|
|
|
198 Ovation Reply Comments at 4. See Comcast/NBCU Order, 26 FCC Rcd at 4267, ¶ 73 (“We also conclude that |
|
Comcast-NBCU will have increased leverage to negotiate restrictive online rights from third parties, again to the |
|
detriment of competition. Comcast-NBCU’s demand of restrictive online rights in exchange for carriage may also |
|
cause harms to consumer choice, diversity, and broadband investment.”); see also Public Knowledge Comments at |
|
17-18 (“While the program access rules prevent an MVPD from keeping a programmer from being carried by other |
|
current MVPDs, nothing at the moment prevents a company like Comcast demanding, as a condition for being |
|
carried on Comcast, that the programmer stay off of online platforms.”). |
|
199 In this NPRM, we use the term OTT to refer to linear video services that travel over the public Internet and that |
|
cable operators do not treat as managed video services on any cable system. |
|
200 See supra n.1. |
|
201 47 U.S.C. § 522(5). |
|
202 47 U.S.C. § 522(6). |
|
203 See Cable Television Technical and Operational Requirements, 27 FCC Rcd 9678, 9681, ¶ 5 (referring to “IP |
|
delivery of cable service”); Office of Consumer Counsel v. Southern New England Telephone Co., 515 F.Supp.2d |
|
269, 276 (D. Conn. 2007), vacated on other grounds, 368 Fed.Appx. 244 (2d Cir. 2010) (“Southern New England |
|
Telephone”) (“The statutory language itself appears to require the conclusion that [IP-based] video programming |
|
service does constitute a ‘cable service,’ as defined by the Cable Act.”).Federal Communications Commission FCC 14-210 |
|
33 |
|
73. Second, to the extent a cable operator uses “a set of closed transmission paths” to provide |
|
cable service, as one providing IP video programming over its copper wire (including coaxial cable) or |
|
fiber optic cable does,204 its facility meets the definition of cable system: |
|
a facility, consisting of a set of closed transmission paths and associated signal generation, |
|
reception, and control equipment that is designed to provide cable service which includes |
|
video programming and which is provided to multiple subscribers within a community, |
|
but such term does not include (A) a facility that serves only to retransmit the television |
|
signals of 1 or more television broadcast stations; (B) a facility that serves subscribers |
|
without using any public right-of-way; (C) a facility of a common carrier which is subject, |
|
in whole or in part, to the provisions of subchapter II of this chapter, except that such |
|
facility shall be considered a cable system (other than for purposes of section 541(c) of |
|
this title) to the extent such facility is used in the transmission of video programming |
|
directly to subscribers, unless the extent of such use is solely to provide interactive ondemand |
|
services; (D) an open video system that complies with section 573 of this title; or |
|
(E) any facilities of any electric utility used solely for operating its electric utility |
|
system.205 |
|
|
|
74. Finally, an entity that delivers cable services via IP is a cable operator to the extent it |
|
delivers those services as managed video services over its own facilities and within its footprint. |
|
206 |
|
This is |
|
compelled by the Act’s definition of a cable operator as a “person or group of persons (A) who provides |
|
cable service over a cable system and directly or through one or more affiliates owns a significant interest |
|
in such cable system, or (B) who otherwise controls or is responsible for, through any arrangement, the |
|
management and operation of such a cable system.”207 |
|
75. IP-based service provided by a cable operator over its facilities and within its footprint |
|
must be regulated as a cable service not only because it is compelled by the statutory definitions; it is also |
|
good policy, as it ensures that cable operators will continue to be subject to the pro-competitive, |
|
consumer-focused regulations that apply to cable even if they provide their services via IP. |
|
76. Congress and the Commission advanced several pro-competitive, consumer-focused |
|
values when they adopted the cable-specific provisions of the Act and the rules implementing these |
|
important provisions. The Act and our rules include many cable-specific requirements, including the |
|
following.: annual regulatory fees;208 Emergency Alert System (“EAS”) requirements;209 the V-Chip;210 |
|
|
|
204 The Commission previously analyzed the term “set of closed transmission paths,” and determined that Congress |
|
most likely meant a system of copper wire and/or fiber optic cable. See Definition of a Cable Television System, |
|
Report and Order, 5 FCC Rcd 7638, 7639, ¶ 7 (1990) (“by referring to a ‘closed’ transmission medium, the drafters |
|
contemplated that cable system facilities would use physically closed or shielded conducting media or ‘transmission |
|
paths,’ rather than radio waves alone. While the original Senate version of the Cable Act was not passed, we have no |
|
basis for thinking that the Senate and House did not share a common understanding of the virtually identical terms |
|
‘closed transmission path’ and ‘closed transmission media’ (which itself was defined as a ‘transmission path’) that |
|
were used in their respective definitions of cable systems.”). The Commission also defined the word subscriber in |
|
the phrase “provided to multiple subscribers within a community” to mean “a member of the general public who |
|
receives broadcast programming distributed by a cable television system[] and does not further distribute it.” |
|
Definition of a Cable Television System, Report and Order, 5 FCC Rcd 7638, 7642, ¶ 32 (1990). |
|
205 47 U.S.C. § 522(7). |
|
206 We note that this interpretation does not extend to services like “TV Everywhere” because they are not managed |
|
video services. We seek comment on how to treat such services below. See infra ¶ 78. |
|
207 47 U.S.C. § 522(5). |
|
208 See 47 C.F.R. § 1.1155 (this rule specifically includes facilities-based IPTV services).Federal Communications Commission FCC 14-210 |
|
34 |
|
commercial limits in children’s programs;211 network non-duplication;212 syndicated program |
|
exclusivity;213 notice to broadcasters regarding: (i) deletion or repositioning of a broadcast signal,214 (ii) a |
|
change in designation of principal headend,215 (iii) change in technical configuration,216 (iv) the provision |
|
of service to 1000 subscribers, thereby entitling broadcast stations to exercise non-duplication protection |
|
or syndicated exclusivity protection;217 political programming and candidate access rules;218 sponsorship |
|
identification;219 lotteries;220 public inspection file;221 public, educational, or governmental channels |
|
(“PEG”);222 program access;223 leased access;224 various reporting requirements;225 cross-ownership |
|
restrictions;226 prohibition on buy outs;227 national subscriber limits (horizontal ownership restriction);228 |
|
(Continued from previous page) |
|
209 See 47 C.F.R. §§ 11.1, 11.2(c)-(d), 11.11; see also 47 C.F.R. § 76.1711 (EAS recordkeeping requirements for |
|
cable systems). |
|
210 Congress adopted the V-chip requirement in 1996 as part of the Parental Choice in Television Programming Act. |
|
See 47 U.S.C. § 303(x) (added by The Telecommunications Act of 1996, Pub. L. No. 104-104, § 551(c), 110 Stat. |
|
56, 141 (1996)). Parents with a V-chip-equipped television set or converter box can block television programming |
|
based on its rating. See Implementation of Section 551 of the Telecommunications Act of 1996, Video Programming |
|
Ratings, Report and Order, 13 FCC Rcd 8232 (1998) (“TV Parental Guidelines Order”). The V-chip requirement |
|
currently applies to certain television broadcast receivers (based on size) and digital television receivers without an |
|
associated display device. See 47 C.F.R. § 15.120(b); Technical Requirements to Enable Blocking of Video |
|
Programming Based on Program Ratings, Report and Order, 13 FCC Rcd 11248 (1998). |
|
211 See 47 C.F.R. §§ 76.225, 76.1703. |
|
212 See 47 C.F.R. §§ 76.92-95. |
|
213 See 47 C.F.R. §§ 76.101-110. |
|
214 See 47 U.S.C. § 534(b)(9); see also 47 C.F.R. § 76.1601. |
|
215 See 47 C.F.R. §§ 76.1607, 76.1708. |
|
216 See 47 C.F.R. § 76.1608. |
|
217 See 47 C.F.R. § 76.1609. |
|
218 See 47 U.S.C. § 315; see also 47 C.F.R. §§ 76.205-206, 76.1611, 76.1701. |
|
219 See 47 C.F.R §§ 76.1615, 76.1715. |
|
220 See 47 C.F.R. § 76.213. |
|
221 See 47 C.F.R. §§ 76.1700-10, 1715-16. See also Media Bureau Seeks Comment on Petition for Rulemaking Filed |
|
by the Campaign Legal Center, Common Cause and the Sunlight Foundation Seeking Expansion of Online Public |
|
File Obligations to Cable and Satellite TV Operators, DA 14-1149, 79 Fed. Reg. 51136 (MB 2014) (seeking |
|
comment on a petition for rulemaking to require cable systems and satellite operators to post their public files to the |
|
Commission’s online database). |
|
222 See 47 U.S.C. §§ 531, 541(a)(4)(B). |
|
223 See 47 U.S.C. § 548; see also 47 C.F.R. §§ 76.1001-1002. |
|
224 See 47 U.S.C. § 532; see also 47 C.F.R. §§ 76.701, 76.970-978, 76.1707. |
|
225 See 47 C.F.R. § 76.403 (cable television system report: FCC Form 325); 47 C.F.R. § 76.1610 (change of cable |
|
system operational information (FCC Form 324)); 47 C.F.R. § 76.1801 (cable registration statement (FCC Form |
|
322)). |
|
226 See 47 U.S.C. § 533(a); see also 47 C.F.R. § 27.1202; 47 C.F.R. § 76.501. |
|
227 See 47 U.S.C. § 572; see also 47 C.F.R. §§ 76.505, 76.1404, 76.1616. |
|
228 See 47 U.S.C. § 533(f)(1)(A); 47 C.F.R. § 76.503(a); see also Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir. |
|
2009) (vacating the Commission’s cable horizontal ownership limits).Federal Communications Commission FCC 14-210 |
|
35 |
|
limits on carriage of vertically integrated programming;229 various franchising requirements;230 rate |
|
regulation, including a requirement to offer a basic service tier, a prohibition on negative option billing, |
|
an obligation to offer a tier buy-through option, and requirements pertaining to information on subscriber |
|
bills;231 regulation of services, facilities, and equipment, including minimum technical standards and |
|
notification to customers of changes in rates, programming services, or channel positions;232 consumer |
|
protection and customer service;233 consumer electronics equipment compatibility, including prohibition |
|
on scrambling or encrypting the basic service tier;234 support for unidirectional digital cable products |
|
(Plug and Play);235 protection of subscriber privacy;236 transmission of obscene programming;237 and |
|
scrambling of cable channels for non-subscribers.238 |
|
|
|
77. In particular, these obligations on cable operators are critical for noncommercial, local, |
|
and independent broadcasters. Sections 614 and 615 of the Communications Act and implementing rules |
|
adopted by the Commission entitle commercial and noncommercial television broadcasters to carriage on |
|
local cable television systems. |
|
239 |
|
When the Commission proposed implementing regulations, it noted that |
|
Congress emphasized strongly that the public interest demands that cable subscribers be able to access |
|
their local commercial and noncommercial broadcast stations.240 |
|
That congressional policy directive |
|
persists today; and the continued application of these requirements to cable operators that provide video |
|
programming over IP will ensure that local broadcasters will be carried, and that other cable-centric |
|
regulations will apply, regardless of the method that the cable operator uses to deliver the cable service. |
|
241 |
|
2. Cable Operators Offering OTT Services |
|
78. We tentatively conclude that video programming services that a cable operator may offer |
|
over the Internet should not be regulated as cable services. Some cable operators have announced plans |
|
|
|
229 See 47 U.S.C. § 533(f)(1)(B); 47 C.F.R. § 76.504(a); see also Time Warner Entertainment Co. v. FCC, 240 F.3d |
|
1126 (D.C. Cir. 2001) (reversing and remanding the Commission’s cable vertical ownership limits). |
|
230 See 47 U.S.C. §§ 541, 542, 545, 546, 547, 555, 555a; see also 47 C.F.R. §§ 76.41, 76.502. |
|
231 See 47 U.S.C. § 543; see also 47 C.F.R. §§ 76.901-963, 76.980-990, 76.1402, 76.1605-1606, 76.1800, 76.1805. |
|
232 See 47 U.S.C. § 544; see also 47 C.F.R. §§ 76.601, 76.605, 76.609, 76.1602-1604, 76.1618, 76.1704-06, |
|
76.1713, 76.1717. |
|
233 See 47 U.S.C. § 552; 47 C.F.R. §§ 76.309, 76.985, 76.1619. |
|
234 See 47 U.S.C. § 544a; 47 C.F.R. §§ 76.630, 76.1621-1622. |
|
235 See 47 C.F.R. § 76.640. |
|
236 See 47 U.S.C. § 551. |
|
237 See 47 U.S.C. § 559; 47 C.F.R. § 76.702. |
|
238 See 47 U.S.C. § 560. |
|
239 See 47 U.SC. §§ 534, 535; 47 C.F.R. §§ 76.55-62, 76.1614, 76.1617, 76.1709. Cable operators are required to |
|
carry the primary video, accompanying audio, and closed captioning data contained in line 21 of the vertical |
|
blanking interval and, to the extent technically feasible, program-related material carried in the vertical blanking |
|
interval or on subcarriers. See 47 U.S.C. § 534(b)(3)(A); 47 C.F.R. §§ 76.62(e)-(f), 76.606. |
|
240 Implementation of the Cable Television Consumer Protection and Competition Act of 1992: Broadcast Signal |
|
Carriage Issues, Notice of Proposed Rulemaking, 7 FCC Rcd. 8055, 8056, ¶ 4 (1992). |
|
241 We laud private market agreements like the public television digital cable carriage agreement that NCTA and the |
|
Association of Public Television Stations negotiated. See Letter from Diane Burstein, Deputy General Counsel, |
|
NCTA, to Marlene H. Dortch, Secretary, Federal Communications Commission, CS Docket No. 98-120 (filed Feb. |
|
2, 2005). We note, however, that the parties negotiated that agreement in the shadow of the Commission’s must |
|
carry regulations, which would have provided a safeguard to noncommercial broadcasters if those negotiations had |
|
broken down.Federal Communications Commission FCC 14-210 |
|
36 |
|
to offer video programming services via the Internet.242 |
|
If a cable operator delivers video programming |
|
service over the Internet, rather than as a managed video service over its own facilities, we tentatively |
|
conclude that this entity would be (i) a cable operator with respect to its managed video service, and (ii) a |
|
non-cable MVPD under our proposed Linear Programming Interpretation with respect to its OTT service. |
|
To the extent a consumer located within a cable operator’s footprint may access the cable operator’s OTT |
|
service using that cable operator’s broadband facilities for Internet access, how should this arrangement |
|
be classified? We tentatively conclude that such an OTT service, if provided to consumers without regard |
|
to whether they subscribe to the cable operator’s managed video service, would be a non-cable MVPD |
|
service inside and outside of the operator’s footprint, even if it is accessible over that cable operator’s |
|
broadband facilities. We seek comment on whether there is any reason that our tentative conclusion |
|
should change if a cable operator provides an OTT service within its footprint only, rather than nationally. |
|
Would our analysis change if the OTT service were bundled with the cable service? Finally, we seek |
|
comment on the likely forms that new OTT services will take, and on both the application of the statutory |
|
definitions discussed above to such services and the policy implications of classifying these services. |
|
3. DBS Providers Offering OTT Services |
|
79. Some DBS providers offer linear OTT services (and have announced plans to expand |
|
those services) via the Internet.243 |
|
To the extent that DBS providers offer video programming services |
|
over the Internet, we tentatively conclude that those services should not be regulated as DBS service, and |
|
therefore should not be subject to the regulatory and statutory obligations and privileges of such services. |
|
If we adopt our proposed Linear Programming Interpretation, those services would be MVPD services |
|
subject to the regulatory and statutory obligations and privileges of such services. |
|
244 |
|
We reach this |
|
tentative conclusion because that service does not use the providers’ satellite facilities, but rather relies on |
|
the Internet for delivery. We believe that this tentative conclusion is consistent with the Act and our |
|
rules.245 |
|
We seek comment on this tentative conclusion. |
|
IV. PROCEDURAL MATTERS |
|
80. Authority. This Notice of Proposed Rulemaking is issued pursuant to authority contained |
|
in Sections 4(i), 4(j), 303(r), 325, 403, 616, 628, 629, 634 and 713 of the Communications Act of 1934, as |
|
amended, 47 U.S.C §§ 154(i), 154(j), 303(r), 325, 403, 536, 548, 549, 554, and 613. |
|
81. Ex Parte Rules. The proceeding initiated by this Notice of Proposed Rulemaking shall be |
|
treated as “permit-but-disclose” proceedings in accordance with the Commission’s ex parte rules.246 |
|
|
|
|
|
242 See supra n.1. |
|
243 See DishWorld – Watch Live International TV Instantly, http://www.dishworld.com/ (last visited Oct. 22, 2014); |
|
Edmund Lee, Scott Moritz and Alex Sherman, Dish Leads in Race to Offer Online TV to Compete With Cable, |
|
BLOOMBERG, March 15, 2014, available at http://www.bloomberg.com/news/2014-03-04/dish-takes-lead-in-race-tooffer-streaming-tv-to-rival-cable.html. |
|
244 See supra ¶¶ 18-28. |
|
245 See 47 C.F.R. § 25.103 (defining Direct Broadcast Satellite Service as “A radiocommunication service in which |
|
signals transmitted or retransmitted by Broadcasting-Satellite Service space stations in the 12.2-12.7 GHz band are |
|
intended for direct reception by subscribers or the general public. For the purposes of this definition, the term direct |
|
reception includes individual reception and community reception.”). See also 47 U.S.C. § 335(b)(5) (stating that for |
|
purposes of that subsection, “‘provider of direct broadcast satellite service’ means—(i) a licensee for a Ku-band |
|
satellite system under part 100 of title 47 of the Code of Federal Regulations; or (ii) any distributor who controls a |
|
minimum number of channels (as specified by Commission regulation) using a Ku-band fixed service satellite |
|
system for the provision of video programming directly to the home and licensed under part 25 of title 47 of the |
|
Code of Federal Regulations.” The Commission eliminated Part 100 from the rules in 2002; DBS satellite facilities |
|
now are licensed under Part 25 of the rules. Policies and Rules for the Direct Broadcast Satellite Service, 17 FCC |
|
Rcd 11331 (2002).). |
|
246 47 C.F.R. §§ 1.1200 – 1.1216.Federal Communications Commission FCC 14-210 |
|
37 |
|
Persons making ex parte presentations must file a copy of any written presentation or a memorandum |
|
summarizing any oral presentation within two business days after the presentation (unless a different |
|
deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are |
|
reminded that memoranda summarizing the presentation must: (1) list all persons attending or otherwise |
|
participating in the meeting at which the ex parte presentation was made; and (2) summarize all data |
|
presented and arguments made during the presentation. If the presentation consisted in whole or in part of |
|
the presentation of data or arguments already reflected in the presenter’s written comments, memoranda, |
|
or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or |
|
her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers |
|
where such data or arguments can be found) in lieu of summarizing them in the memorandum. |
|
Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex |
|
parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule |
|
1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte |
|
presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must |
|
be filed through the electronic comment filing system available for that proceeding, and must be filed in |
|
their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should |
|
familiarize themselves with the Commission’s ex parte rules. |
|
82. Filing Requirements. Pursuant to Sections 1.415 and 1.419 of the Commission’s rules,247 |
|
interested parties may file comments and reply comments on or before the dates indicated on the first |
|
page of this document. Comments may be filed using the Commission’s Electronic Comment Filing |
|
System (“ECFS”).248 |
|
Electronic Filers: Comments may be filed electronically using the Internet by accessing the |
|
ECFS: http://fjallfoss.fcc.gov/ecfs2/. |
|
Paper Filers: Parties who choose to file by paper must file an original and one copy of each |
|
filing. If more than one docket or rulemaking number appears in the caption of this |
|
proceeding, filers must submit two additional copies for each additional docket or rulemaking |
|
number. |
|
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by |
|
first-class or overnight U.S. Postal Service mail. All filings must be addressed to the |
|
Commission’s Secretary, Office of the Secretary, Federal Communications Commission. |
|
o All hand-delivered or messenger-delivered paper filings for the Commission’s |
|
Secretary must be delivered to FCC Headquarters at 445 12th St., SW, Room TWA325, |
|
Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand |
|
deliveries must be held together with rubber bands or fasteners. Any envelopes and |
|
boxes must be disposed of before entering the building. |
|
o Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority |
|
Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. |
|
o U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 |
|
12th Street, SW, Washington DC 20554. |
|
83. Availability of Documents. Comments and reply comments will be available for public |
|
inspection during regular business hours in the FCC Reference Center, Federal Communications |
|
Commission, 445 12th Street, S.W., CY-A257, Washington, D.C., 20554. These documents will also be |
|
available via ECFS. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe |
|
Acrobat. |
|
|
|
247 See id. §§ 1.415, 1.419. |
|
248 See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).Federal Communications Commission FCC 14-210 |
|
38 |
|
84. People with Disabilities. To request materials in accessible formats for people with |
|
disabilities (braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call |
|
the FCC’s Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 |
|
(TTY). |
|
85. Additional Information. For additional information on this proceeding, contact Brendan |
|
Murray mailto:of the Media Bureau, Policy Division, (202) 418-1573. |
|
86. Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, |
|
see 5 U.S.C. § 604, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the |
|
possible significant economic impact on small entities of the policies and rules addressed in this |
|
document. The IRFA is set forth in Appendix B. Written public comments are requested in the IRFA. |
|
These comments must be filed in accordance with the same filing deadlines as comments filed in response |
|
to this Notice of Proposed Rulemaking as set forth on the first page of this document, and have a separate |
|
and distinct heading designating them as responses to the IRFA. |
|
87. Initial Paperwork Reduction Act Analysis. This Notice of Proposed Rulemaking seeks |
|
comment on a potential new or revised information collection requirement. If the Commission adopts any |
|
new or revised information collection requirement, the Commission will publish a separate notice in the |
|
Federal Register inviting the public to comment on the requirement, as required by the Paperwork |
|
Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small |
|
Business Paperwork Relief Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4), the Commission |
|
seeks specific comment on how it might “further reduce the information collection burden for small |
|
business concerns with fewer than 25 employees.” |
|
V. ORDERING CLAUSES |
|
88. Accordingly, IT IS ORDERED, pursuant to the authority contained in Sections 4(i), 4(j), |
|
303(r), 325, 403, 616, 628, 629, 634 and 713 of the Communications Act of 1934, as amended, 47 U.S.C |
|
§§ 154(i), 154(j), 303(r), 325, 403, 536, 548, 549, 554, and 613, that this Notice of Proposed Rulemaking |
|
IS ADOPTED. |
|
89. IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental |
|
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Notice of Proposed |
|
Rulemaking including the Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the |
|
Small Business Administration. |
|
FEDERAL COMMUNICATIONS COMMISSION |
|
Marlene H. Dortch |
|
SecretaryFederal Communications Commission FCC 14-210 |
|
39 |
|
APPENDIX A |
|
Proposed Rules |
|
1. Amend § 76.5 to read as follows: |
|
§ 76.5 Definitions. |
|
* * * * * |
|
(rr) Linear Video. A stream of video programing that is prescheduled by the programmer. |
|
(ss) Multichannel Video Programming Distributor. A person such as, but not limited to, a cable |
|
operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television |
|
receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, |
|
multiple channels of video programming. As used in this paragraph, channel means linear video without |
|
regard to the means by which the programming is distributed. |
|
2. Amend § 76.64(d) to read as follows: |
|
§ 76.64 Retransmission Consent. |
|
* * * * * |
|
(d) [Reserved] |
|
* * * * * |
|
3. Amend § 76.71(a) to read as follows: |
|
§ 76.71 Scope of application. |
|
(a) The provisions of this subpart shall apply to any corporation, partnership, association, jointstock |
|
company, or trust engaged primarily in the management or operation of any cable system. Cable |
|
entities subject to these provisions include those systems defined in § 76.5(a), all satellite master antenna |
|
television systems serving 50 or more subscribers, and any multichannel video programming distributor. |
|
For purposes of the provisions of this subpart, a multichannel video programming distributor is an entity |
|
such as, but not limited to, a cable operator, a BRS/EBS provider, a direct broadcast satellite service, a |
|
television receive-only satellite program distributor, or a video dialtone program service provider, who |
|
makes available for purchase, by subscribers or customers, multiple channels of video programming, |
|
whether or not a licensee. Multichannel video programming distributors do not include any entity which |
|
lacks control over the video programming distributed. For purposes of this subpart, an entity has control |
|
over the video programming it distributes, if it selects video programming channels or programs and |
|
determines how they are presented for sale to consumers. Notwithstanding the foregoing, the regulations |
|
in this subpart are not applicable to the owners or originators (of programs or channels of programming) |
|
that distribute six or fewer channels of commonly-owned video programming over a leased transport |
|
facility. For purposes of this subpart, programming services are “commonly-owned” if the same entity |
|
holds a majority of the stock (or is a general partner) of each program service. |
|
* * * * * |
|
4. Amend § 76.905(d) to read as follows: |
|
§ 76.905 Standards for identification of cable systems subject to effective |
|
competition. |
|
* * * * *Federal Communications Commission FCC 14-210 |
|
40 |
|
(d) [Reserved] |
|
* * * * * |
|
5. Amend § 76.1000(e) to read as follows: |
|
§ 76.1000 Definitions. |
|
* * * * * |
|
(e) Multichannel video programming distributor. The term “multichannel video programming |
|
distributor” means an entity that falls under the definition provided in Section 76.5(rr) engaged in the |
|
business of making available for purchase, by subscribers or customers, multiple channels of video |
|
programming. Such entities include, but are not limited to, a cable operator, a BRS/EBS provider, a direct |
|
broadcast satellite service, a television receive-only satellite program distributor, and a satellite master |
|
antenna television system operator, as well as buying groups or agents of all such entities. |
|
Note to paragraph (e): A video programming provider that provides more than one channel of video |
|
programming on an open video system is a multichannel video programming distributor for |
|
purposes of this subpart O and Section 76.1507. |
|
* * * * * |
|
6. Amend § 76.1200(b) to read as follows: |
|
§ 76.1200 Definitions. |
|
* * * * * |
|
(b) [Reserved] |
|
* * * * * |
|
7. Amend § 76.1300(d) to read as follows: |
|
§ 76.1300 Definitions. |
|
* * * * * |
|
(d) Multichannel video programming distributor. The term “multichannel video programming |
|
distributor” means an entity that falls under the definition provided in Section 76.5(rr)engaged in the |
|
business of making available for purchase, by subscribers or customers, multiple channels of video |
|
programming. Such entities include, but are not limited to, a cable operator, a BRS/EBS provider, a direct |
|
broadcast satellite service, a television receive-only satellite program distributor, and a satellite master |
|
antenna television system operator, as well as buying groups or agents of all such entities. |
|
* * * * *Federal Communications Commission FCC 14-210 |
|
41 |
|
APPENDIX B |
|
Initial Regulatory Flexibility Act Analysis |
|
1. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”)1 |
|
the |
|
Commission has prepared this present Initial Regulatory Flexibility Analysis (“IRFA”) concerning the |
|
possible significant economic impact on small entities by the policies and rules proposed in this Notice of |
|
Proposed Rulemaking (“NPRM”). Written public comments are requested on this IRFA. Comments |
|
must be identified as responses to the IRFA and must be filed by the deadlines for comments provided on |
|
the first page of the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the |
|
Chief Counsel for Advocacy of the Small Business Administration (“SBA”).2 |
|
In addition, the NPRM and |
|
IRFA (or summaries thereof) will be published in the Federal Register.3 |
|
A. Need for, and Objectives of, the Proposed Rule Changes |
|
2. The NPRM seeks comment on a proposed interpretation of the definition of |
|
“multichannel video programming distributor,” or MVPD. The Communications Act defines MVPD as |
|
[A] person such as, but not limited to, a cable operator, a multichannel multipoint |
|
distribution service, a direct broadcast satellite service, or a television receive-only |
|
satellite program distributor, who makes available for purchase, by subscribers or |
|
customers, multiple channels of video programming.4 |
|
3. Under the Commission’s proposed interpretation of this definition, providers of multiple |
|
streams of pre-scheduled online video (i.e., linear video channels) that are available for purchase will be |
|
considered MVPDs. We believe that this interpretation reflects the changing market for video services as |
|
more subscription linear video is made available online. As an alternative, we seek comment on an |
|
interpretation of the definition of MVPD that would require an entity to also control the physical means— |
|
the “transmission path—that the entity uses to deliver its video programming. We believe that it is |
|
important for the Commission to provide guidance on the definition of MVPD because companies are |
|
experimenting with new business models based on Internet distribution. |
|
4. We seek comment from the public about the effect that this interpretation will have. We |
|
seek comment on the potential benefits of this rule change for online video providers, namely program |
|
access5 |
|
and retransmission consent6 |
|
protections. We also seek comment on the potential burdens on |
|
online video providers relating to (i) program carriage;7 |
|
(ii) the competitive availability of navigation |
|
devices (including the integration ban);8 |
|
(iii) good faith negotiation with broadcasters for retransmission |
|
consent;9 |
|
(iv) Equal Employment Opportunity (“EEO”);10 (v) closed captioning;11 (vi) video description;12 |
|
|
|
1 |
|
See 5 U.S.C. § 603. The RFA, see 5 U.S.C. § 601 – 612, has been amended by the Small Business Regulatory |
|
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). |
|
2 |
|
See 5 U.S.C. § 603(a). |
|
3 |
|
See id. |
|
4 |
|
47 U.S.C. § 522(13); see also 47 C.F.R. §§ 76.64(d), 76.71(a), 76.905(d), 76.1000(e), 76.1200(b), 76.1300(d). |
|
5 |
|
See 47 U.S.C. § 548; 47 C.F.R. §§ 76.1000-1004. Among other things, these rules require cable-affiliated |
|
programmers to make their programming available to MVPDs on nondiscriminatory rates, terms, and conditions. |
|
6 |
|
See 47 U.S.C. § 325(b)(3)(C)(ii); 47 C.F.R. § 76.65. Among other things, these rules require broadcasters to |
|
negotiate in good faith with MVPDs for retransmission consent. |
|
7 |
|
See 47 U.S.C. § 536; 47 C.F.R. §§ 76.1300-1302. |
|
8 |
|
See 47 U.S.C. § 549; 47 C.F.R. §§ 76.1200-1210. |
|
9 |
|
See 47 U.S.C. § 325(b)(3)(C)(iii); 47 C.F.R. § 76.65(b). |
|
10 See 47 C.F.R. §§ 76.71-79, 76.1792, 76.1802.Federal Communications Commission FCC 14-210 |
|
42 |
|
(vii) access to emergency information;13 (vi) signal leakage;14 (vii) inside wiring;15 and (viii) the loudness |
|
of commercials. We invite comment on any other effects that these rules may have. |
|
B. Legal Basis |
|
5. The proposed action is authorized pursuant to Sections 4(i), 4(j), 303(r), 325, 403, 616, |
|
628, 629, 634 and 713 of the Communications Act of 1934, as amended, 47 U.S.C §§ 154(i), 154(j), |
|
303(r), 325, 403, 536, 548, 549, 554, and 613. |
|
C. Description and Estimate of the Number of Small Entities to Which the Proposed |
|
Rules Will Apply |
|
6. The RFA directs agencies to provide a description of, and where feasible, an estimate of |
|
the number of small entities that may be affected by the proposed rules, if adopted.16 |
|
The RFA generally |
|
defines the term “small entity” as having the same meaning as the terms “small business,” “small |
|
organization,” and “small governmental jurisdiction.”17 |
|
In addition, the term “small business” has the |
|
same meaning as the term “small business concern” under the Small Business Act.18 |
|
A small business |
|
concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of |
|
operation; and (3) satisfies any additional criteria established by the SBA.19 |
|
Below, we provide a |
|
description of such small entities, as well as an estimate of the number of such small entities, where |
|
feasible. |
|
7. Cable Television Distribution Services. Since 2007, these services have been defined |
|
within the broad economic census category of Wired Telecommunications Carriers, which was developed |
|
for small wireline businesses. This category is defined as follows: “This industry comprises |
|
establishments primarily engaged in operating and/or providing access to transmission facilities and |
|
infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using |
|
wired telecommunications networks. Transmission facilities may be based on a single technology or a |
|
combination of technologies. Establishments in this industry use the wired telecommunications network |
|
facilities that they operate to provide a variety of services, such as wired telephony services, including |
|
VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet |
|
services.”20 |
|
The SBA has developed a small business size standard for this category, which is: all such |
|
(Continued from previous page) |
|
11 See 47 C.F.R. § 79.1. |
|
12 See 47 C.F.R. § 79.3. |
|
13 See 47 C.F.R. § 79.2. |
|
14 See 47 C.F.R. § 76.610; see also 47 C.F.R. §§ 76.605(a)(12), 76.611, 76.614, 76.1803; 1.1705(a)(1) (FCC Form |
|
320 – Basic Signal Leakage Performance Report). |
|
15 See 47 C.F.R. §§ 76.800-806. |
|
16 5 U.S.C. § 603(b)(3). |
|
17 5 U.S.C. § 601(6). |
|
18 5 U.S.C. § 601(3) (incorporating by reference the definition of “small-business concern” in 15 U.S.C. § 632). |
|
Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency, after |
|
consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public |
|
comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and |
|
publishes such definition(s) in the Federal Register.” 5 U.S.C. § 601(3). |
|
19 15 U.S.C. § 632. |
|
20 U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” (partial definition), |
|
at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: broadband Internet service |
|
providers (e.g., cable, DSL); local telephone carriers (wired); cable television distribution services; long-distance |
|
telephone carriers (wired); closed circuit television (CCTV) services; VoIP service providers, using own operated |
|
wired telecommunications infrastructure; direct-to-home satellite system (DTH) services; telecommunications |
|
carriers (wired); satellite television distribution systems; and multichannel multipoint distribution services (MMDS).Federal Communications Commission FCC 14-210 |
|
43 |
|
businesses having 1,500 or fewer employees.21 |
|
Census data for 2007 shows that there were 3,188 that |
|
operated for that entire year.22 |
|
Of this total, 2,940 firms had fewer than 100 employees, and 248 firms |
|
had 100 or more employees.23 |
|
Therefore, under this size standard, we estimate that the majority of such |
|
businesses can be considered small entities. |
|
8. Cable Companies and Systems. The Commission has also developed its own small |
|
business size standards, for the purpose of cable rate regulation. Under the Commission’s rules, a “small |
|
cable company” is one serving 400,000 or fewer subscribers nationwide.24 |
|
Industry data shows that there |
|
were 1,100 cable companies at the end of December 2012.25 |
|
Of this total, all but ten cable operators |
|
nationwide are small under this size standard.26 |
|
In addition, under the Commission’s rate regulation rules, |
|
a “small system” is a cable system serving 15,000 or fewer subscribers.27 |
|
Current Commission records |
|
show 4,945 cable systems nationwide. |
|
28 |
|
Of this total, 4,380 cable systems have less than 20,000 |
|
subscribers, and 565 systems have 20,000 or more subscribers, based on the same records. Thus, under |
|
this standard, we estimate that most cable systems are small entities. |
|
9. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as |
|
amended, also contains a size standard for small cable system operators, which is “a cable operator that, |
|
directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the |
|
United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate |
|
exceed $250,000,000.”29 |
|
There are approximately 56.4 million incumbent cable video subscribers in the |
|
United States today.30 |
|
Accordingly, an operator serving fewer than 564,000 subscribers shall be deemed a |
|
|
|
21 13 C.F.R. § 121.201; 2012 NAICS code 517110. |
|
22 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007 |
|
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
23 Id. |
|
24 47 C.F.R. § 76.901(e). The Commission determined that this size standard equates approximately to a size |
|
standard of $100 million or less in annual revenues. Implementation of Sections of the Cable Television Consumer |
|
Protection And Competition Act of 1992: Rate Regulation, MM Docket No. 92-266, MM Docket No. 93-215, Sixth |
|
Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408, ¶ 28 (1995). |
|
25 NCTA, Industry Data, Number of Cable Operating Companies (December 2012), |
|
http://www.ncta.com/Statistics.aspx (visited Feb. 21, 2014). Depending upon the number of homes and the size of |
|
the geographic area served, cable operators use one or more cable systems to provide video service. See Annual |
|
Assessment of the Status of Competition in the Market for Delivery of Video Programming, MB Docket No. 12-203, |
|
Fifteenth Report, 28 FCC Rcd 10496, 10505-6, ¶ 24 (2013) (“15th Annual Competition Report”). |
|
26 See SNL Kagan, “Top Cable MSOs – 09/13 Q”; available at |
|
http://www.snl.com/InteractiveX/TopCableMSOs.aspx?period=2013Q3&sortcol=subscribersbasic&sortorder=desc. |
|
We note that, when applied to an MVPD operator, under this size standard (i.e., 400,000 or fewer subscribers) all |
|
but 14 MVPD operators would be considered small. See NCTA, Industry Data, Top 25 Multichannel Video Service |
|
Customers (2012), http://www.ncta.com/industry-data (visited Feb. 21, 2014). The Commission applied this size |
|
standard to MVPD operators in its implementation of the CALM Act. See Implementation of the Commercial |
|
Advertisement Loudness Mitigation (CALM) Act, MB Docket No. 11-93, Report and Order, 26 FCC Rcd 17222, |
|
17245-46, ¶ 37 (2011) (“CALM Act Report and Order”) (defining a smaller MVPD operator as one serving 400,000 |
|
or fewer subscribers nationwide, as of December 31, 2011). |
|
27 47 C.F.R. § 76.901(c). |
|
28 The number of active, registered cable systems comes from the Commission’s Cable Operations and Licensing |
|
System (COALS) database on Aug. 28, 2013. A cable system is a physical system integrated to a principal headend. |
|
29 47 U.S.C. § 543(m)(2); see 47 C.F.R. § 76.901(f) & nn. 1-3. |
|
30 See NCTA, Industry Data, Cable Video Customers (2012), http://www.ncta.com/industry-data (visited Feb. 21, |
|
2014).Federal Communications Commission FCC 14-210 |
|
44 |
|
small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do |
|
not exceed $250 million in the aggregate.31 |
|
Based on available data, we find that all but ten incumbent |
|
cable operators are small entities under this size standard.32 |
|
We note that the Commission neither |
|
requests nor collects information on whether cable system operators are affiliated with entities whose |
|
gross annual revenues exceed $250 million.33 |
|
Although it seems certain that some of these cable system |
|
operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at |
|
this time to estimate with greater precision the number of cable system operators that would qualify as |
|
small cable operators under the definition in the Communications Act. |
|
10. Television Broadcasting. This Economic Census category “comprises establishments |
|
primarily engaged in broadcasting images together with sound. These establishments operate television |
|
broadcasting studios and facilities for the programming and transmission of programs to the public.”34 |
|
|
|
The SBA has created the following small business size standard for such businesses: those having $38.5 |
|
million or less in annual receipts.35 |
|
The 2007 U.S. Census indicates that 808 firms in this category |
|
operated in that year. Of that number, 709 had annual receipts of $25,000,000 or less, and 99 had annual |
|
receipts of more than $25,000,000.36 |
|
Since the Census has no additional classifications on the basis of |
|
which to identify the number of stations whose receipts exceeded $38.5 million in that year, the |
|
Commission concludes that the majority of television stations were small under the applicable SBA size |
|
standard. |
|
11. Apart from the U.S. Census, the Commission has estimated the number of licensed |
|
commercial television stations to be 1,387 stations.37 |
|
Of this total, 1,221 stations (or about 88 percent) |
|
had revenues of $38.5 million or less, according to Commission staff review of the BIA Kelsey Inc. |
|
Media Access Pro Television Database (BIA) on July 2, 2014. In addition, the Commission has estimated |
|
the number of licensed noncommercial educational (NCE) television stations to be 395.38 NCE stations |
|
are non-profit, and therefore considered to be small entities.39 |
|
Based on these data, we estimate that the |
|
majority of television broadcast stations are small entities. |
|
12. We note, however, that in assessing whether a business concern qualifies as small under |
|
the above definition, business (control) affiliations40 must be included. Our estimate, therefore, likely |
|
|
|
31 47 C.F.R. § 76.901(f); see FCC Announces New Subscriber Count for the Definition of Small Cable Operator, |
|
Public Notice, 16 FCC Rcd 2225 (Cable Services Bureau 2001). |
|
32 See NCTA, Industry Data, Top 25 Multichannel Video Service Customers (2012), http://www.ncta.com/industrydata |
|
(visited Feb. 21, 2014). |
|
33 The Commission does receive such information on a case-by-case basis if a cable operator appeals a local |
|
franchise authority’s finding that the operator does not qualify as a small cable operator pursuant to § 76.901(f) of |
|
the Commission’s rules. See 47 C.F.R. § 76.901(f). |
|
34 U.S. Census Bureau, 2012 NAICS Definitions, “515120 Television Broadcasting,” at http://www.census.gov./cgibin/sssd/naics/naicsrch. |
|
35 13 C.F.R. § 121.201; 2012 NAICS code 515120. |
|
36 U.S. Census Bureau, Table No. EC0751SSSZ4, Information: Subject Series – Establishment and Firm Size: |
|
Receipts Size of Firms for the United States: 2007 (515120), |
|
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ4&prod |
|
Type=table |
|
37 See Broadcast Station Totals as of June 30, 2014, Press Release (MB rel. July 9, 2014) (Broadcast Station Totals) |
|
at https://apps.fcc.gov/edocs_public/attachmatch/DOC-328096A1.pdf. |
|
38 See Broadcast Station Totals, supra. |
|
39 |
|
See generally 5 U.S.C. §§ 601(4), (6). |
|
40 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other |
|
or a third party or parties controls or has to power to control both.” 13 C.F.R. § 21.103(a)(1).Federal Communications Commission FCC 14-210 |
|
45 |
|
overstates the number of small entities that might be affected by our action because the revenue figure on |
|
which it is based does not include or aggregate revenues from affiliated companies. In addition, an |
|
element of the definition of “small business” is that the entity not be dominant in its field of operation. |
|
We are unable at this time to define or quantify the criteria that would establish whether a specific |
|
television station is dominant in its field of operation. Accordingly, the estimate of small businesses to |
|
which rules may apply does not exclude any television station from the definition of a small business on |
|
this basis and is therefore possibly over-inclusive to that extent. |
|
13. In addition, the Commission has estimated the number of licensed noncommercial |
|
educational (NCE) television stations to be 396.41 |
|
These stations are non-profit, and therefore considered |
|
to be small entities.42 |
|
14. Direct Broadcast Satellite (DBS) Service. DBS service is a nationally distributed |
|
subscription service that delivers video and audio programming via satellite to a small parabolic “dish” |
|
antenna at the subscriber’s location. DBS, by exception, is now included in the SBA’s broad economic |
|
census category, Wired Telecommunications Carriers,43 which was developed for small wireline |
|
businesses. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer |
|
employees.44 |
|
Census data for 2007 shows that there were 3,188 firms that operated for that entire year.45 |
|
|
|
Of this total, 2,940 firms had fewer than 100 employees, and 248 firms had 100 or more employees.46 |
|
|
|
Therefore, under this size standard, the majority of such businesses can be considered small entities. |
|
However, the data we have available as a basis for estimating the number of such small entities were |
|
gathered under a superseded SBA small business size standard formerly titled “Cable and Other Program |
|
Distribution.” As of 2002, the SBA defined a small Cable and Other Program Distribution provider as |
|
one with $12.5 million or less in annual receipts.47 |
|
Currently, only two entities provide DBS service, |
|
which requires a great investment of capital for operation: DIRECTV and DISH Network.48 |
|
Each |
|
currently offers subscription services. DIRECTV and DISH Network each report annual revenues that |
|
are in excess of the threshold for a small business. Because DBS service requires significant capital, we |
|
|
|
41 See Jan. 8, 2014 Broadcast Station Totals Press Release. |
|
42 See generally 5 U.S.C. §§ 601(4), (6). |
|
43 See 13 C.F.R. § 121.201, 2012 NAICS code 517110. This category of Wired Telecommunications Carriers is |
|
defined as follows: “This industry comprises establishments primarily engaged in operating and/or providing access |
|
to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, |
|
sound, and video using wired telecommunications networks. Transmission facilities may be based on a single |
|
technology or a combination of technologies. Establishments in this industry use the wired telecommunications |
|
network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP |
|
services; wired (cable) audio and video programming distribution; and wired broadband Internet services. By |
|
exception, establishments providing satellite television distribution services using facilities and infrastructure that |
|
they operate are included in this industry.” (Emphasis added to text relevant to satellite services.) U.S. Census |
|
Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers,” at http://www.census.gov/cgibin/sssd/naics/naicsrch. |
|
44 13 C.F.R. § 121.201; 2012 NAICS code 517110. |
|
45 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007 |
|
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
46 Id. |
|
47 See 13 C.F.R. § 121.201, NAICS code 517510 (2002). |
|
48 See 15th Annual Competition Report, 28 FCC Rcd at 10507, ¶ 27. As of June 2012, DIRECTV is the largest DBS |
|
operator and the second largest MVPD in the United States, serving approximately 19.9 million subscribers. DISH |
|
Network is the second largest DBS operator and the third largest MVPD, serving approximately 14.1 million |
|
subscribers. Id. at 10507, 10546, ¶¶ 27, 110-11. Federal Communications Commission FCC 14-210 |
|
46 |
|
believe it is unlikely that a small entity as defined under the superseded SBA size standard would have the |
|
financial wherewithal to become a DBS service provider. |
|
15. Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable |
|
Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed |
|
transmission paths without using any public right-of-way. They acquire video programming and |
|
distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and |
|
condominiums, and commercial multiple tenant units such as hotels and office buildings. SMATV |
|
systems or PCOs are now included in the SBA’s broad economic census category, Wired |
|
Telecommunications Carriers,49 which was developed for small wireline businesses. Under this category, |
|
the SBA deems a wireline business to be small if it has 1,500 or fewer employees.50 |
|
Census data for 2007 |
|
shows that there were 3,188 firms that operated for that entire year.51 |
|
Of this total, 2,940 firms had fewer |
|
than 100 employees, and 248 firms had 100 or more employees.52 |
|
Therefore, under this size standard, the |
|
majority of such businesses can be considered small entities. |
|
16. Home Satellite Dish (HSD) Service. HSD or the large dish segment of the satellite |
|
industry is the original satellite-to-home service offered to consumers, and involves the home reception of |
|
signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses |
|
small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of |
|
unscrambled (free) programming and scrambled programming purchased from program packagers that |
|
are licensed to facilitate subscribers’ receipt of video programming. Because HSD provides subscription |
|
services, HSD falls within the SBA-recognized definition of Wired Telecommunications Carriers.53 |
|
The |
|
SBA has developed a small business size standard for this category, which is: all such businesses having |
|
1,500 or fewer employees.54 |
|
Census data for 2007 shows that there were 3,188 firms that operated for |
|
that entire year.55 |
|
Of this total, 2,940 firms had fewer than 100 employees, and 248 firms had 100 or |
|
more employees.56 |
|
Therefore, under this size standard, the majority of such businesses can be considered |
|
small entities. |
|
17. Open Video Systems. The open video system (OVS) framework was established in 1996, |
|
and is one of four statutorily recognized options for the provision of video programming services by local |
|
exchange carriers.57 The OVS framework provides opportunities for the distribution of video |
|
programming other than through cable systems. Because OVS operators provide subscription services,58 |
|
|
|
49 13 C.F.R. § 121.201; 2012 NAICS code 517110. |
|
50 See id. |
|
51 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007 |
|
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
52 Id. |
|
53 13 C.F.R. § 121.201; 2012 NAICS code 517110. |
|
54 See id. |
|
55 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007 |
|
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
56 Id. |
|
57 47 U.S.C. § 571(a)(3)-(4); see Implementation of Section 19 of the 1992 Cable Act and Annual Assessment of the |
|
Status of Competition in the Market for the Delivery of Video Programming, MB Docket No. 06-189, Thirteenth |
|
Report, 24 FCC Rcd 542, 606, ¶ 135 (2009) (“13 |
|
th Annual Competition Report”). |
|
58 See 47 U.S.C. § 573.Federal Communications Commission FCC 14-210 |
|
47 |
|
OVS falls within the SBA small business size standard covering cable services, which is “Wired |
|
Telecommunications Carriers.”59 The SBA has developed a small business size standard for this |
|
category, which is: all such businesses having 1,500 or fewer employees.60 |
|
Census data for 2007 shows |
|
that there were 3,188 firms that operated for that entire year.61 |
|
Of this total, 2,940 firms had fewer than |
|
100 employees, and 248 firms had 100 or more employees.62 |
|
Therefore, under this size standard, we |
|
estimate that the majority of these businesses can be considered small entities. In addition, we note that |
|
the Commission has certified some OVS operators, with some now providing service.63 Broadband |
|
service providers (BSPs) are currently the only significant holders of OVS certifications or local OVS |
|
franchises.64 The Commission does not have financial or employment information regarding the other |
|
entities authorized to provide OVS, some of which may not yet be operational. Thus, again, at least some |
|
of the OVS operators may qualify as small entities. |
|
18. Cable and Other Subscription Programming. The Census Bureau defines this category |
|
as follows: “This industry comprises establishments primarily engaged in operating studios and facilities |
|
for the broadcasting of programs on a subscription or fee basis. . . . These establishments produce |
|
programming in their own facilities or acquire programming from external sources. The programming |
|
material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for |
|
transmission to viewers.”65 |
|
The SBA has developed a small business size standard for this category, |
|
which is: all such businesses having $38.5 million dollars or less in annual revenues.66 |
|
Census data for |
|
2007 show that there were 396 firms that operated for that entire year.67 |
|
Of that number, 349 operated |
|
with annual revenues of $24,999,999 dollars or less.68 |
|
Forty-seven (47) operated with annual revenues of |
|
|
|
59 See 13 C.F.R. § 121.201, 2012 NAICS code 517110. This category of Wired Telecommunications Carriers is |
|
defined in part as follows: “This industry comprises establishments primarily engaged in operating and/or providing |
|
access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, |
|
sound, and video using wired telecommunications networks. Transmission facilities may be based on a single |
|
technology or a combination of technologies. Establishments in this industry use the wired telecommunications |
|
network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP |
|
services; wired (cable) audio and video programming distribution; and wired broadband Internet services.” U.S. |
|
Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers,” at |
|
http://www.census.gov/cgi-bin/sssd/naics/naicsrch. |
|
60 13 C.F.R. § 121.201; 2012 NAICS code 517110. |
|
61 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007 |
|
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
62 Id. |
|
63 A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html. |
|
64 See 13th Annual Competition Report, 24 FCC Rcd at 606-07, ¶ 135. BSPs are newer businesses that are building |
|
state-of-the-art, facilities-based networks to provide video, voice, and data services over a single network. |
|
65 U.S. Census Bureau, 2012 NAICS Definitions, “515210 Cable and Other Subscription Programming,” at |
|
http://www.census.gov/cgi-bin/sssd/naics/naicsrch. |
|
66 13 C.F.R. § 121.201; 2014 NAICS code 515210. |
|
67 See U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Receipts Size of Establishments for the United States: 2007 – 2007 Economic |
|
Census,” NAICS code 515210, Table EC0751SSSZ2; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
68 Id.Federal Communications Commission FCC 14-210 |
|
48 |
|
$25,000,000 or greater69 |
|
Thus, under this size standard, the majority of such businesses can be considered |
|
small entities. |
|
19. Motion Picture and Video Production. These entities may be indirectly affected by our |
|
action. The Census Bureau defines this category as follows: “This industry comprises establishments |
|
primarily engaged in producing, or producing and distributing motion pictures, videos, television |
|
programs, or television commercials.”70 |
|
We note that establishments in this category may be engaged in |
|
various industries, including cable programming. The SBA has developed a small business size standard |
|
for this category, which is: all such businesses having $32.5 million dollars or less in annual revenues.71 |
|
|
|
Census data for 2007 show that there were 9,095 firms that that operated that year.72 |
|
Of that number, |
|
8,995 had annual receipts of $24,999,999 or less, and 100 had annual receipts ranging from not less than |
|
$25,000,000 to $100,000,000 or more.73 |
|
Thus, under this size standard, the majority of such businesses |
|
can be considered small entities. |
|
20. Motion Picture and Video Distribution. The Census Bureau defines this category as |
|
follows: “This industry comprises establishments primarily engaged in acquiring distribution rights and |
|
distributing film and video productions to motion picture theaters, television networks and stations, and |
|
exhibitors.”74 |
|
We note that establishments in this category may be engaged in various industries, |
|
including cable programming. The SBA has developed a small business size standard for this category, |
|
which is: all such businesses having $32 million dollars or less in annual revenues.75 |
|
Census data for |
|
2007 show that there were 450 firms that operated for that entire year. |
|
76 |
|
Of that number, 434 had annual |
|
receipts of $24,999,999 or less, and 16 had annual receipts ranging from not less than $25,000,000 to |
|
$100,000,000 or more.77 |
|
Thus, under this size standard, the majority of such businesses can be |
|
considered small entities. |
|
21. Internet Publishing and Broadcasting and Web Search Portals. The Census Bureau |
|
defines this category as follows: “This industry comprises establishments primarily engaged in (1) |
|
publishing and/or broadcasting content on the Internet exclusively or (2) operating Web sites that use a |
|
search engine to generate and maintain extensive databases of Internet addresses and content in an easily |
|
searchable format (and known as Web search portals). The publishing and broadcasting establishments in |
|
this industry do not provide traditional (non-Internet) versions of the content that they publish or |
|
broadcast. They provide textual, audio, and/or video content of general or specific interest on the Internet |
|
exclusively. Establishments known as Web search portals often provide additional Internet services, such |
|
|
|
69 Id. |
|
70 U.S. Census Bureau, 2012 NAICS Definitions, NAICS Code 512110, at http://www.census.gov/cgibin/sssd/naics/naicsrch. |
|
71 13 C.F.R § 121.201, 2012 NAICS code 512110. |
|
72 See U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Receipts Size of Firms for the United States: 2007 – 2007 Economic Census,” |
|
NAICS code 512110, Table EC0751SSSZ4; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
73 See id. |
|
74 U.S. Census Bureau, 2012 NAICS Definitions, NAICS Code 512120, at http://www.census.gov/cgibin/sssd/naics/naicsrch. |
|
75 13 C.F.R. § 121.201, 2012 NAICS code 512120. |
|
76 See U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Receipts Size of Firms for the United States: 2007 – 2007 Economic Census,” |
|
NAICS code 512120, Table EC0751SSSZ4; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
77 See id.Federal Communications Commission FCC 14-210 |
|
49 |
|
as e-mail, connections to other web sites, auctions, news, and other limited content, and serve as a home |
|
base for Internet users.”78 |
|
The SBA has developed a small business size standard for this category, which |
|
is: all such businesses having 500 or fewer employees.79 |
|
Census data for 2007 shows that there were |
|
2,705 firms that operated for the entire year.80 |
|
Of this total, 2,682 firms had fewer than 500 employees, |
|
and 13 firms had between 500 and 999 employees.81 |
|
Therefore, under this size standard, the majority of |
|
such businesses can be considered small. |
|
D. Description of Projected Reporting, Recordkeeping, and Other Compliance |
|
Requirements |
|
22. The NPRM proposes to expand the scope of entities that would be subject to |
|
recordkeeping requirements. The NPRM seeks comment on the Commission’s proposal to interpret the |
|
definition of “multichannel video programming distributor” to include online linear subscription video |
|
providers. If the Commission adopts its proposed interpretation, online linear subscription video |
|
providers will be required to follow the Commission’s regulations that apply to MVPDs, which include |
|
recordkeeping requirements. The Commission seeks comment on the effect that this will have on online |
|
linear subscription video providers. |
|
23. Specifically, small entities that are deemed MVPDs would be subject to seven main areas |
|
of regulation as MVPDs. The first area is program carriage, which prohibits MVPDs from (i) requiring a |
|
financial interest in a video programming vendor’s program service as a condition for carriage;82 (ii) |
|
coercing a video programming vendor to provide, or retaliating against a vendor for failing to provide, |
|
exclusive rights as a condition of carriage; 83 or (iii) unreasonably restraining the ability of an unaffiliated |
|
video programming vendor to compete fairly by discriminating in video programming distribution on the |
|
basis of affiliation or nonaffiliation of vendors in the selection, terms, or conditions for carriage.84 The |
|
second area is competitive availability of navigation devices, which requires MVPDs to allow consumers |
|
to attach non-harmful devices to their networks, separate security from their receiver devices, and explain |
|
to interested parties how to make compatible devices.85 The third area is retransmission consent, which |
|
requires MVPDs to negotiate in good faith with broadcasters for carriage.86 The fourth area is Equal |
|
Employment Opportunity (“EEO”), which (i) require MVPDs to provide equal opportunity in |
|
employment to all qualified persons and prohibit MVPDs from discriminating in employment based on |
|
|
|
78 U.S. Census Bureau, 2012 NAICS Definitions, “519130 Internet Publishing and Broadcasting and Web Search |
|
Portals” at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: Internet book |
|
publishers, Internet sports sites, Internet entertainment sites, Internet video broadcast sites, Internet game sites, |
|
Internet news publishers, Internet periodical publishers, Internet radio stations, Internet search portals, Web search |
|
portals, and Internet search web sites. |
|
79 13 C.F.R. § 121.201; NAICS code 519130. |
|
80 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information: |
|
Subject Series – Estab and Firm Size: Employment Size of Firms for the United States: 2007 – 2007 Economic |
|
Census,” NAICS code 519130, Table EC0751SSSZ5; available at |
|
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. |
|
81 Id. |
|
82 See 47 C.F.R. § 76.1301(a); see also 47 U.S.C. § 536(a)(1). |
|
83 See 47 C.F.R. § 76.1301(b); see also 47 U.S.C. § 536(a)(2). |
|
84 See 47 U.S.C. § 536; 47 C.F.R. §§ 76.1300-1302. |
|
85 See 47 U.S.C. § 549; 47 C.F.R. §§ 76.1200-1210. Per Section 106 of the STELA Reauthorization Act of 2014, |
|
Pub. L. No. 113-200, the requirement that MVPDs rely on separate security in the devices that they provide to |
|
consumers terminates on December 4, 2015. |
|
86 See 47 U.S.C. § 325(b)(3)(C)(iii); 47 C.F.R. § 76.65(b).Federal Communications Commission FCC 14-210 |
|
50 |
|
race, color, religion, national origin, age, or sex;87 (ii) require MVPDs to engage in certain outreach and |
|
recruitment activities;88 and (iii) require MVPDs to comply with certain reporting and recordkeeping |
|
requirements.89 |
|
The fifth area is closed captioning, which requires MVPDs to provide closed captioning, |
|
defined as the “visual display of the audio portion of video programming pursuant to the technical |
|
specifications set forth in this part.”90 The sixth area video description and access to emergency |
|
information, which require MVPDs to make programming and emergency information accessible to the |
|
blind and visually impaired.91 And finally, MVPDs are required to meet certain standards to mitigate the |
|
loudness of commercials.92 |
|
E. Steps Taken to Minimize Significant Economic Impact on Small Entities, and |
|
Significant Alternatives Considered |
|
24. The RFA requires an agency to describe any significant alternatives that it has considered |
|
in reaching its proposed approach, which may include the following four alternatives (among others): (1) |
|
the establishment of differing compliance or reporting requirements or timetables that take into account |
|
the resources available to small entities; (2) the clarification, consolidation, or simplification of |
|
compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather |
|
than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small |
|
entities.93 |
|
25. The NPRM proposes to interpret the term MVPD to include all multichannel, |
|
subscription linear video providers, including Internet-based providers. The MVPD seeks comment on |
|
whether to phase in application of its rules to online linear subscription video providers, or whether to |
|
waive the rules in certain instances. The Commission has never proposed an interpretation of the term |
|
MVPD, and now seeks comment on the effect of the proposed interpretation, specifically whether the |
|
interpretation will burden online linear subscription video providers without a corresponding public |
|
interest benefit. The Commission proposes this interpretation, however, because it believes that it will |
|
provide small entities with access to programming that will allow those entities to compete with larger |
|
incumbent providers. The Commission understands that with MVPD status comes certain regulatory |
|
obligations (as summarized in Section D above), and the Commission seeks comment on whether the |
|
regulatory privileges—i.e., access to broadcast and cable-affiliated programming—outweigh those |
|
obligations. The Commission also seeks comment on whether the interpretation will have the desired |
|
effect of increasing video competition. To limit the burdens on small entities, the Commission also seeks |
|
comment on whether to waive regulations to the extent allowable under the Communications Act. And |
|
the Commission invites alternative interpretations of the term MVPD that would limit burdens on small |
|
entities. |
|
F. Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rule |
|
None. |
|
|
|
87 See 47 U.S.C. § 554(b); 47 C.F.R. § 76.73(a); see also 47 U.S.C. § 554(c); 47 C.F.R. § 76.73(b). |
|
88 See 47 C.F.R. § 76.75(a)-(b), (e). |
|
89 See 47 C.F.R. §§ 76.75(c); 76.77(a), (d); 76.1702; 76.1802. |
|
90 47 C.F.R. § 79.1; see also 47 U.S.C. § 613. |
|
91 See 47 C.F.R. §§ 79.2, 79.3. |
|
92 See 47 C.F.R. § 76.607; Implementation of the Commercial Advertisement Loudness Mitigation (CALM) Act, |
|
Report and Order, 26 FCC Rcd 17222 (2011). |
|
93 5 U.S.C. § 603(c)(1)-(c)(4)Federal Communications Commission FCC 14-210 |
|
51 |
|
STATEMENT OF |
|
CHAIRMAN TOM WHEELER |
|
Re: Promoting Innovation and Competition in the Provision of Multichannel Video Programming |
|
Distribution Services, MB Docket No. 14-261. |
|
Today, we begin a process to expand Internet video competition with cable and satellite services. |
|
Our proposal will mean more alternatives for consumers beyond the traditional cable or satellite bundle, |
|
including giving consumers more options to buy the programming they want. When digital technology |
|
made video simply zeroes and ones, it opened up the opportunity for new Internet-based competition to |
|
cable and satellite services. Yet efforts by new entrants to develop new video services have faltered |
|
because they could not get access to programming content that was owned by cable networks or |
|
broadcasters. |
|
With this Notice of Proposed Rulemaking, the Commission moves to update the Commission’s |
|
rules to give video providers who operate over the Internet – or any other method of transmission – the |
|
same access to programming that cable and satellite operators have. Big company control over access to |
|
programming should not keep programs from being available on the Internet. Today, we propose to break |
|
that bottleneck. |
|
More specifically, we propose to update our interpretation of the definition of a multichannel |
|
video programming distributor (MVPD) to make it technology-neutral. Video is no longer tied to a |
|
certain transmission technology, so our interpretation of MVPD should not be tied to transmission |
|
facilities. Under our proposal, any providers that make multiple linear streams of video programming |
|
available for purchase would be considered MVPDs, regardless of the technology used to deliver the |
|
programming. The effect of this change will be to improve the availability of programming that over-thetop |
|
providers need and consumers want. |
|
History has shown us how such a change can expand consumer choice. Back in 1992, Congress |
|
said that DBS competitors should be able to negotiate in good faith for video content, even if it is owned |
|
by cable companies and broadcasters. Greater access to high-demand content spurred the growth of the |
|
satellite video business in the 1990s. We propose to do the same thing for over-the-top video providers |
|
who deliver content, not via cable or satellite, but via the Internet. |
|
By facilitating access to such content, we expect Internet-based linear programming services to |
|
develop as a competitor to cable and satellite. Consumers should have more opportunities to buy the |
|
channels they want instead of having to pay for channels they don’t want. |
|
Our proposals will also help stimulate additional broadband deployment. An updated definition |
|
of MVPD would permit a new broadband competitor to offer customers the ability to reach a variety of |
|
over-the-top video packages, without having to enter the video business itself. |
|
This NPRM marks the beginning, not the end of the process. While it proposes to interpret the |
|
term MVPD to encompass distributors of multiple linear video programming streams, including Internetbased |
|
services, it also asks for comment on an alternative interpretation that would require an MVPD to |
|
have control over a transmission path. The NPRM also asks for comment on: |
|
o How each interpretation would impact MVPDs, consumers, and content owners, and how |
|
each would promote competition and broadband adoption; |
|
o How the Commission should apply its retransmission consent “good faith” negotiation |
|
rules with respect to Internet-based MVPDs to protect local broadcasters; and |
|
o Whether these proposals would affect the regulatory status of IP-delivered video services |
|
by cable operators and DBS providers.Federal Communications Commission FCC 14-210 |
|
52 |
|
This proposal is a big win for consumers and part of the Commission’s broader efforts to speed |
|
the transition to all-IP networks in a way that serves the public interest – enabling innovation, while |
|
preserving core values like competition and consumer choice. Federal Communications Commission FCC 14-210 |
|
53 |
|
STATEMENT OF |
|
COMMISSIONER MIGNON L. CLYBURN |
|
Re: Promoting Innovation and Competition in the Provision of Multichannel Video Programming |
|
Distribution Services, MB Docket No. 14-261. |
|
Change is both constant and continuous. |
|
As the media landscape evolves to reflect consumer demands and innovation, so too must our |
|
policies and regulatory regime. This has been a constant refrain for the FCC, as we seek to keep pace |
|
with the invariable changes in the global communications market. |
|
Our tastes, fashions, viewpoints and values are influenced by content transferred over our |
|
television, radio, desktop, or handheld devices, and for those providers of content, this presents |
|
opportunity and obstacles, and holds both risk and reward. |
|
Sound regulation typically requires a careful balancing of competing interests. In this context, it |
|
means our goals should be to define “multichannel video programming distributor” as broadly as possible |
|
to accommodate a new set of choices and offerings for consumers, while concurrently opening the avenue |
|
for innovation and new players. Multiple channels of video programming, including linear video |
|
providers who may not own their own facilities, should be included. We also want to insure that nascent, |
|
internet- based, services are not given competitive advantages over established MVPDs, who have welldefined |
|
obligations under the law. |
|
With this vote, I believe we have adequately balanced these interests, by accomplishing three |
|
noteworthy public interest objectives: First, and foremost, we seek to provide more choice for consumers |
|
– always a positive goal. Second, we create a path for new entrants by encouraging a level playing-field |
|
of competition in a rich market. Third, we modernize our regulations so they comport with the new |
|
realities of a dynamic industry, and remain relevant in a competitive market as a result. |
|
As the video marketplace continues to grow in ways, perhaps, unforeseen, I believe today’s |
|
decision to expand the definition of MVPD will prove to be prescient.Federal Communications Commission FCC 14-210 |
|
54 |
|
STATEMENT OF |
|
COMMISSIONER JESSICA ROSENWORCEL |
|
Re: Promoting Innovation and Competition in the Provision of Multichannel Video Programming |
|
Distribution Services, MB Docket No. 14-261. |
|
The future of watching video does not look like the past. That’s because over the next few years, |
|
television will change more than it has over the last several decades. |
|
The way we watch will change—where we watch, when we watch, and how we watch. |
|
Families huddling together in one room basking in the glow of a single screen will give way to gatherings |
|
with many screens and multiple programs. I know. It is already happening with my family in my |
|
home—and it is surely happening in countless others just like it, all across the country. |
|
While online video has arrived, it is still in the early stages of development. The world’s largest |
|
media companies and smallest upstarts are experimenting with innovative programming, business models, |
|
and pricing. As a result, the video market is evolving at a breathtaking pace, driven by both new |
|
technology and changing consumer expectations. |
|
At the Commission we have an obligation to promote competition in the delivery of video |
|
services. We have the authority to update our rules to reflect the fact that video services are being offered |
|
over new platforms. We have the authority to interpret the statutory term multichannel video |
|
programming distributor (MVPD) to include providers of multiple streams of linear, over-the-top |
|
television. But I believe acknowledging authority is only the start of our inquiry. We also need to |
|
consider if we should alter our rules—and how. That’s because our answer will impact the kind of video |
|
offerings that come to the market, the speed with which they arrive, and the prices consumers pay. |
|
For this reason, I want to thank Chairman Wheeler and my colleagues for accommodating my |
|
request that this rulemaking seek comment on allowing, under certain circumstances, the ability to elect |
|
MVPD status. New service types are emerging fast—faster than any rulemaking process at this agency. |
|
What new video models succeed, what degree of self-curated viewing they enable, and what prices |
|
consumers are willing to pay are still up for grabs. If this kind of election can be administered easily, new |
|
providers would be able to avoid the legal conundrum involved in determining the regulatory status of |
|
novel services, seeking regulatory exemption, or pursuing a waiver of our rules before launching in the |
|
market. Moreover, this could be an elegant compromise for new services—between those who believe |
|
we should steer clear of policies for Internet-distributed video and those who believe clear rules are |
|
essential to get their service off the ground. |
|
I look forward to the record that develops in response to the many questions in this rulemaking. |
|
But more than that, I look forward to the wide range of innovative video services that are developing. |
|
The future of watching—anytime and anywhere—is bound to be exciting. Federal Communications Commission FCC 14-210 |
|
55 |
|
CONCURRING STATEMENT OF |
|
COMMISSIONER AJIT PAI |
|
Re: Promoting Innovation and Competition in the Provision of Multichannel Video Programming |
|
Distribution Service, MB Docket No. 14-261. |
|
The video marketplace is changing, and changing fast. Internet-based video distribution—a |
|
flickering hope at the dawn of the Internet age—is a real and growing phenomenon. New entrants are |
|
cutting new paths, while established competitors are feeling pressure to adapt their business models. |
|
More than ever before, consumers are in the driver’s seat when it comes to video content. |
|
In evolving markets like these, the government should be hesitant to extend the outdated |
|
regulations and classifications of old. It’s for this reason that I can’t vote to approve this Notice of |
|
Proposed Rulemaking. In my view, the Commission’s fundamental proposal—that certain Internet-based |
|
distributors of video programming should be regulated as multichannel video programming distributors |
|
(MVPDs), a mouthful of a term older than Internet video itself—is premature. And the legal analysis |
|
contained in the Notice is heavily slanted to support that result. |
|
To be sure, this proposal is being packaged as a way to increase video competition. But given |
|
the dramatic, organic explosion in online video content over the last few years, I have my doubts as to |
|
whether additional regulation in this space is necessary. Indeed, I fear that it could impede continued |
|
innovation. I am also worried that this proposal will pave the way for more comprehensive regulation of |
|
Internet-based services. |
|
Nonetheless, I am voting to concur for two reasons. First, I agree that it is time for the |
|
Commission to resolve the question of whether Internet-based distributors of video programming can be |
|
MVPDs, an issue that has been pending at the Commission for over four years. And second, the Notice |
|
has improved significantly since it was first circulated, as a result of changes that Commissioner O’Rielly, |
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Commissioner Rosenworcel, and I suggested. |
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Among other things, the Notice now tentatively concludes that programmers’ websites should be |
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shielded from additional regulation. It also tentatively concludes that there should be regulatory parity |
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between cable operators offering video programming over the Internet and other entities doing the same. |
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Additionally, it asks in a more forthright manner about the interplay between the Commission’s |
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regulatory decisions and decisions that will need to be made independently by the U.S. Copyright Office. |
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In particular, if the Commission were to decide that Internet-based distributors of video programming are |
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MVPDs, subjecting broadcasters to the obligation to negotiate in good faith with them regarding |
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retransmission consent, what would it mean in practice if the Copyright Office maintained its position |
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that such Internet-based distributors do not qualify for the compulsory license? Would that be a workable |
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regulatory scheme? While I had hoped to get public input on other questions as well,1 |
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doing so with |
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respect to the issues mentioned above is significant. |
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I look forward to reviewing the record compiled in response to this Notice and to working |
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collaboratively with my colleagues to create a regulatory framework that preserves for many years more |
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what millions of consumers view as a golden age of video. |
|
|
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1 |
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For example, we should have asked whether the Commission’s proposal could require us to regulate Internet |
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pornography. This is obviously an uncomfortable question, but it won’t vanish through omission.Federal Communications Commission FCC 14-210 |
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56 |
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CONCURRING STATEMENT OF |
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COMMISSIONER MICHAEL O’RIELLY |
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Re: Promoting Innovation and Competition in the Provision of Multichannel Video Programming |
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Distribution Services, MB Docket No. 14-261. |
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I marvel at and embrace what the Internet and the many innovative programmers and designers |
|
have been able to bring to the world. Over the last 20 years or so, the Internet has revolutionized all |
|
communication capabilities. It is the ultimate disruptive force. Nowhere is this more evident than in the |
|
offering of video programming. According to industry experts, video already accounts for two-thirds of |
|
U.S. Internet traffic today and is estimated to increase to approximately 80 percent in just three years.1 |
|
|
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Once the domain of a few select providers, the video marketplace is changing right before our very eyes. |
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Business models are adapting on the fly, and a robust video offering on the Internet is becoming more of a |
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necessity for those companies seeking to compete in the years ahead. |
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With all of this dynamism in the online video marketplace, it makes this item particularly |
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puzzling. While I can appreciate that the Commission may be trying to be forward looking, this item |
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misses the mark. The Internet—and online video in particular—has grown to where it is today outside of |
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our regulatory clutches, and the FCC trying to jump into this space now, especially without clear direction |
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provided by the Congress, is highly questionable. As a government agency with little to no authority over |
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the Internet, the best thing that the Commission can do is not get in the way. |
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Although I am amenable to seeking comment on these ideas and will concur to this notice, I am |
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unlikely to support a future order based on the central proposal set forth in today’s item. Specifically, it |
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sets up a regime to treat an over-the-top (OTT) video programming provider as a Multichannel Video |
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Programming Distributor (MVPD) if it is offering multiple streams of prescheduled video programming. |
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I am concerned that the Commission’s actions—either intentionally or unintentionally—may skew the |
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marketplace in a harmful way. For instance, OTT video providers may seek to follow this model, if |
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adopted, in order to take advantage of some of the perceived benefits instead of pursuing other more |
|
promising or innovative offerings that the market and consumers may prefer. Or, will some entities |
|
decide not to pursue a linear online offering—or worse remove content from the Internet—because of |
|
regulation? The structure proposed could have significant unintended consequences on this nascent |
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industry still trying to define itself in the immediate term and on the entire video industry in the years to |
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come. So why are we doing this? |
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A review of the supposed benefits of the item results in a short and undistinguished list. For |
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instance, declaring an OTT video offering as an MVPD would allow it to take advantage of the |
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Commission’s Program Access and Retransmission Consent Rules. These prevent certain entities from |
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improperly withholding cable-affiliated programming from competitors and require that negotiations |
|
between parties for broadcast programming be in good faith. These rules, however, do not guarantee a |
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successful outcome, which is determined by private marketplace negotiations; they only bring parties to |
|
the table. But, OTT video providers are doing more than just talking these days. You only have to look |
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at the deals cut by Sony, Dish and others to see that negotiations can commence and agreements can be |
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struck without FCC involvement. |
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It has also been asserted by some people that, as a response to Commission action, the Registrar |
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of Copyrights at the United States Copyright Office could extend compulsory copyright to online video |
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programmers wishing to transmit broadcast signals. My indications are that the Copyright Office is not |
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poised to act nor seeking our advice or input. Moreover, having spent some time over the years working |
|
|
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1 Cisco, VNI Forecast Highlights, United States – 2018 Forecast Highlights, Internet Video, |
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http://www.cisco.com/web/solutions/sp/vni/vni_forecast_highlights/index.html (last visited Dec. 18, 2014).Federal Communications Commission FCC 14-210 |
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57 |
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on potential amendments to the Copyright Act, I am not sure how much flexibility the Registrar would |
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have to deem an MVPD potentially covered by this item as eligible for a compulsory copyright license. |
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In fact, the U.S. District Court for the Southern District of New York has stated that being like a cable |
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system does not make it a cable system for purposes of a compulsory copyright license.2 |
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Likewise, the |
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statute seems to be fairly clear in its use of the terms “cable system” and “satellite carrier,” as opposed to |
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“MVPD.”3 |
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|
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While there may be a few tangible upsides to this item, there are also potential downsides. And |
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this regime is not permissive; if an OTT meets the criteria, the Commission would presumably declare the |
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OTT to be an MVPD—even if the OTT doesn’t want such a declaration. I hope to engage with |
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stakeholders going forward to understand how these burdens could impact current and future business |
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models or plans. |
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Moreover, I am deeply concerned by the suggestion that a cable-affiliated network could be |
|
required to obtain the online rights to all of its programs, which it may not own today, to make them |
|
available to OTT MVPDs. This suggested mandate would occur even if the cable provider didn’t want |
|
the rights for its own business purposes. In effect, we would be forcing a company to negotiate and |
|
purchase copyrights for purposes of selling a more complete video package to an OTT MVPD. Really? |
|
Not only is this beyond offensive, it may just violate the U.S. Constitution. It is extremely unlikely that I |
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would support such a requirement in any final version, and it may taint my view of an entire item. |
|
|
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Finally, and maybe most importantly, I am extremely troubled that the Commission may be |
|
headed down a path to capture OTT video providers within Title VI of the Communications Act. |
|
Although it would not subject such providers to the full panoply of requirements, shoehorning Internet |
|
video providers—the quintessential edge providers—into a framework that many people, including those |
|
in leadership in Congress, have deemed in need of review or overhaul is just plain wrong. As I have |
|
previously stated, this effort, combined with a number of other items seeking to subsume Internet |
|
offerings into Title II, would seem to leave little of the Internet free from the grasp of the |
|
Communications Act, a law not written for the Internet age. How is it that some edge providers fail to see |
|
that the Commission will seek to extend its authority to their business models or plans? |
|
Although I have serious concerns about the direction in which the Commission is headed, I would |
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like to thank the Chairman and my fellow colleagues for working together to get this item to a better |
|
place. A number of harsher proposals, such as mandatory carriage requirements, were removed or |
|
modified at my request. I would also like to recognize the Media Bureau staff who spent many late nights |
|
working on this notice. |
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|
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2 |
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See American Broadcasting Companies, Inc. et el. V. Aereo, Inc., Nos. 12–cv–1540, 12–cv–1543, slip op. |
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(S.D.N.Y. Oct. 23, 2014). |
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3 |
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See 17 U.S.C. §§ 111, 119, 122. |