Aereo To FCC: No, Really, We’re A Cable Company Now. Treat Us Like One, Pretty Please?

Streaming broadcast TV service Aereo was unceremoniously shut down by the Supreme Court last spring, but although they suspended all operations it wasn’t entirely the end of their business. Either Aereo or the law would have to change in order to get them beaming TV around again. Since the relevant law is immovable in the current political climate, that leaves change on Aereo’s end. But the last two attempts Aereo’s made haven’t ended well for them. Is the third time the charm?

The Washington Post reports that Aereo is now plying their case to the FCC.

Why the FCC? Because the commission is mulling over potential rulemaking that would treat online-based video distribution companies — called over-the-top broadcasters — in much the same way that cable and satellite companies (“multichannel video program distributors”) are currently regulated.

If the FCC does make such a rule, OTT companies would then have the same ability to negotiate carriage deals with broadcasters that traditional MVPDs do. So companies like Sony and Dish, for example, would have all but guaranteed access to make the same kind of deals with a content company like Disney or Viacom that any cable provider does.

And that brings us back to Aereo. In a filing with the FCC (PDF), Aereo supported the potential rule, arguing that it would “create regulatory parity” among different kinds of systems that can bring subscribers the same kind of content.

Aereo’s core argument hinges on the magic word: competition. Make this rule, and cover companies like Aereo with it, they suggest, and consumers will win in the end… but without a rule, it’s a no-go:

Characterizing linear streaming online video services as “MVPDs” would create regulatory parity among systems that provide access to the same linear channels to a similar subscriber base, increase investment and competition in the video programming market, and provide consumers with attractive competitive alternatives to existing MVPD services. …

[M]eaningful competition from such online services can only materialize and develop into a sustainable business in a stable and certain regulatory environment. … Linear online streaming services likely cannot attract the level of investment necessary to create meaningful competition to incumbent business models without a clear path of regulatory certainty. The Commission could provide such assurance to new market entrants like Aereo by defining or construing “MVPDs” to include systems that transmit linear channels of video programming to consumers via the internet — thereby securing to all MVPDs, in a technology-neutral way, the right to engage in timely, good faith negotiations to license channels by retransmission consent.

That last sentence is a major shift for Aereo, which got in trouble in the first place for not paying broadcasters to retransmit their content. Aereo argued that they didn’t need to pay transmission fees, because they were primarily an antenna-rental company. The Supreme Court, however, did not at all see it the same way. Instead, SCOTUS said, Aereo was behaving like a cable company by retransmitting content, but avoiding the obligations — i.e., paying retransmission fees.

So, in an attempt not to stay shuttered forever, Aereo tried “no really, we’re a cable company now” arguments both with the U.S. Copyright Office and in a federal appeals court. They got shot down in both instances.

If the FCC makes this rule change in a timely manner for Aereo, it could save the company. But it won’t be doing what it set out to do in the first place, which was to pull signals out of the air without charge and let subscribers access them online.

As the WaPo points out, the rule change would be a win for the broadcasters, who would both get retransmission fees in their pocket as well as increased advertising revenue. Back in 2012, Comcast stood against such a potential rule.

It may end up being a wash in the end: both the House and Senate are poised to tackle major updates to telecommunications law in 2015 and beyond. However, given how hard it is to move an actual complex bill through Congress, any rule the FCC makes would clarify the situation for nascent online distribution services for many years to come.

Aereo to the FCC: Let us join the cable companies we tried to replace [Washington Post]

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