FCC Adds ‘Over the Top’ To Competition Report

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Washington — The Federal Communications
Commission has signaled that over-the-top video is
a growing and potentially competitive multichannel
force to be reckoned with.

For the first time, the FCC will collect data from
online video distributors (OVDs) for its next cablecompetition
report, which will cover 2007-10, a timeframe
in which online video has exploded.

The FCC’s multichannel video-competition report
assesses the competitive marketplace for cable
service.

The FCC says online video is not yet a substitute
that deserves to be considered in the same
competitive marketplace as cable. But it is going
to start gathering string on the issue “in light of
the growing importance of online video distribution
to consumers” — and in anticipation of the
broadband-delivery future the commission has
been pushing for.

The FCC is trying to light a fire under broadband
video, proposing a universal set-top device to deliver
over-the-top video to the TV set for one-stop program
shopping.

The commission’s definition of OVDs includes
standalone services such as Hulu, Vudu and Netflix,
as well as TV-network and station sites such as NBC.com and WABC.com.

Had the commission gone further and concluded
that OVDs were a full-fledged competitor to cable
and other multichannel-video providers, cable
operators would have had even more arguments
for deregulating the industry in the face of growing
competition.

“We request, data, information and comment on
the number and size of OVDs,” the FCC said in its
request for information. “We also seek comment
on whether individual OVDs view other OVDs
as competitors [and] to what extent OVDs compete
with MVPDs and/or broadcast-television stations.”

In its approval of Comcast’s merger with NBC
Universal, the FCC included online video access
and carriage conditions, indicating online video
was a potential competitor that needed protection
from the combined companies’ specific market
power.

The commission has not weighed in on whether
online video services are sufficiently like traditional
multichannel video-programming distributors
(MPVDs) to warrant market-wide access and carriage,
including must-carry and retransmission
rights.

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