Justice Asserts Oversight Role in Online Video Distribution

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Assistant Attorney General Christine Varney said Tuesday that the Federal Communications Commission will have to share the jurisdiction over the online video distribution space with Justice.

That came in a conference call with reporters about the Comcast/NBC Universal deal, which Justice will not block subject to conditions agreed to by Comcast.

"In the matter of traditional multichannel video programmers issue, that is MVPD carriage, MVPD access, MVPD rates. All of that we defer to the Federal Communications Commission. That is their area of traditional expertise and we look to the FCC to enforce those provisions," she said, but added: "We will share jurisdiction with the FCC in this nascent online video distribution marketplace."

While Varney said that the FCC would be the appropriate place to resolve most disputes over online, she added that its consent decree with Comcast includes the ability of Justice to enforce the decree through arbitration.

She said that a qualified online video distributor--one that has a content contract with a Comcast peer, say a Disney ABC or Viacom--is entitled to "similar treatment on similar terms." If they don't get similar treatment, she said, "we will investigate and reserve the right to go to arbitration under our consent decree."

While the government conditions will allow online video distributors (OVDs) access to linear channels--essentially giving access to those channels without a cable subscription--Varney said the government is not trying to shape the online marketplace.

Varney said her goal was to enforce antitrust laws. "What I am very concerned about is the nascent competition here and the potential for the new entity to inhibit competition." She said that Comcast/NBCU has the ability and incentive to raise rival's costs and withhold rival's content, and that Justice was prepared to block it without conditions. "Our view is that there are two ways for an OVD to enter the marketplace. One is an OVD willing to 'step into' the traditional role of being an MVPD. So long as they are willing to undertake the same terms, Comcast has agreed they will license a linear feed."

The other route is if they negotiate a deal with one of their peers, broadcast, cable net or studio.

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