FCC Proposes Treating Online TV Like Cable TV; Amazon Objects If It’ll Stop You From Binge-Watching ‘The Wire’

There’s another internet-related firestorm a-brewing at the FCC. This one is not as broad or as contentious as the now infamous net neutrality ruling, but it is bringing all the big players out to have their say. And what, you might ask, has everyone worked up? It’s the big bandwidth bugaboo of the twenty-teens: online video.

The full proposal (PDF) would allow the FCC to, “interpret the definition of an MVPD to include providers that make multiple linear streams of video programming available for purchase, regardless of the technology used to distribute the programming.”

MVPD stands for “multichannel video programming distributor.” Today, those are our cable and satellite companies. In plain English, the proposed change means that if the FCC adopts the modernization rule, any service that delivers a bunch of TV channels, no matter how they do it, can be classified and treated the way cable and satellite companies are today.

The change would apply specifically to a category of online video that the FCC calls “subscription linear” — online distribution of “continuous, linear streams of video programming on a subscription basis.” Basically, anything that delivers channels online, as opposed to on-demand programming access in the Netflix, Amazon, and Hulu vein.

You could think of it as the Aereo rule, and you wouldn’t be entirely wrong: the change would address that specific new and nebulous grey area between traditional broadcast, cable, and satellite distribution and nascent online distribution of programming.

Aereo got stuck between the two worlds. No less an august body than the Supreme Court found that Aereo was violating copyright by not pursuing proper licensing agreements in the way cable and satellite companies are required to.

After that ruling, Aereo then tried saying okay, we’ll act like a cable company, and attempted to pursue those licensing agreements. However, both the FCC and the Copyright Office shot down that argument.

(The company eventually declared bankruptcy in November and had its assets auctioned off, mostly to TiVo, in February of this year.)

The FCC, as it does, put out the call for public comments in response to the proposal. Particularly, the commission asked for comment on how existing “good faith” rules should apply to internet-based distributors; how different rule interpretations would affect consumers, distributors, and content companies; and how different rule interpretations would promote competition (and broadband adoption).

And that brings us to the comments.

The “against” camp is in large part incumbent businesses who feel threatened by change. The argument from cable lobbyists, both the big-name NCTA and the “small and rural markets” American Cable Association, is that the distribution of multiple channels includes by definition a physical aspect.

The NCTA’s comment (PDF) reads, “All evidence — in the statute and in the legislative history — indicates that Congress meant the term ‘channel’ to mean a transmission path throughout Title VI [which regulates cable], and that it intended that the definition of ‘MVPD’ be restricted to facilities-based entities.”

The ACA hedges, claiming that their members “raise no objections to new entrants … and welcome new approaches to the provision of multiple channels,” but ultimately comes down in the same place as the NCTA. “[We continue] to maintain that the best interpretation of the term ‘MVPD’ is … the ‘Transmission Path Interpretation,’ requiring that an entry porivde a transmission path over which it makes available for purchase multiple channels of video programming to qualify as an MVPD.”

In other words, the cable companies claim, you need to provide wires or satellite dishes or set-top boxes in order to qualify. And, oh, too bad so sad, TV you watch over the internet doesn’t need or use any of that.

The cable distribution companies are not alone in their opposition. Cable networks — content companies — are largely against the change. AMC, Disney, Fox, CBS, and Discovery are all, to some extent, displeased with the suggestion.

So are some new media entrants. The company behind MLB.tv wants nothing to do with it — at least, as much as it would affect their business directly. If the FCC chooses to make the change, MLB.tv writes, “it should exclude [online programming distributors] that make available only content that they or their affiliates own or otherwise have the right to make available.” In other words, sure, regulate a company like Sling or Sony or the next Aereo, but leave us alone because we’re only distributing channels of stuff that we own all the rights to anyway.

Amazon also argues that the change would hurt theirs (and others) robust, booming online video business. Which is an interesting claim, because Amazon provides on-demand programming, not subscription linear programming, and would not at this time be affected by a change to MVPD regulation.

In fact, specifically Amazon wants to protect your right to binge-watch regulation free. They write:

The Commission should clarify that a “linear stream” does not include so-called “binge watching,” in which a new program such as ‘Transparent or past seasons of ‘The Wire’ are made available all at once for viewers to watch online. Clarification is needed because these programs can be consumed one after the other in a linear fashion, but such consumption is still ‘on demand,’ at the viewer’s discretion.

However, not all media companies are against the rule change. In particular, where their cable brethren are unhappy with the idea, broadcast companies are all for it. ABC is Disney and NBC is Comcast, but the groups representing all the stations that are network affiliates — not just of ABC and NBC, but also of CBS and Fox — are entirely for it. And they’re joined by the National Association of Broadcasters, one of the groups that filed copyright infringement suits against Aereo to begin with.

In the “for” camp, we also have the consumer advocates. Public Knowledge, which also commented and advocated in favor of the net neutrality rule and against the Comcast merger, said in their comment (PDF) that opponents arguments are “either illogical or based on misconceptions.”

Public Knowledge also points out that in the long run, the NCTA’s argument may be shortsighted enough to be bad for NCTA’s members. If the FCC promotes online video through policy change, they point out, that will “both boost demand for (often cable-supplied broadband while allowing cable companies to shave their content costs.” In other words, companies like Comcast will be able to make money selling broadband, while spending much less paying companies like Discovery and AMC for the content that customers still get to enjoy.

As has become typical for proposals relating to the internet, the FCC was split 3-2 on whether to consider this rule change at all. Chairman Tom Wheeler and Commissioners Jessica Rosenworcel and Mignon Clyburn were in favor. Commissioners Ajit Pai and Michael O’Rielly were against.

When the commission eventually announces in an open meeting how they’re going to move on a new rule, it is no doubt likely to cause some bureaucratic fireworks once again.