Senate Commerce Committee Chairman Jay Rockefeller (D-W. Va.) is unveiling a video reform bill today (Nov. 12) that would allow online video distributors to elect the same rights to access to programming and protections afforded satellite providers in the 1992 Cable Act, when Congress was trying to boost satellite MVPD competition, and at least some of the responsibilities as well.
The bill is meant to prevent cable operators from leveraging their market power to disadvantage over-the-top competitors, the senators staff said. But it would also apply some cable-like requirements on over-the-top providers who want to offer a cable-like service.
Applying the 1992 Act to over-the-top is likely to draw some hefty criticism from Republicans, which will dim prospects for passage as a stand-alone bill. But the bill is also advertised as the start of a "long overdue conversation" about over-the-top video issues.
The aides talked in broad strokes about the bill, so there could be more devils in the details.
The goal of the Consumer Choice in Online Video Act, says Rockefeller in a statement, is to allow consumers to "benefit from online video’s promise of decreased costs, increased choice, and higher-quality video content. And I strongly believe that my legislation will help foster a consumer-centric revolution in the video marketplace.”
That is according to a briefing on the bill supplied by Rockefeller aides. Citing the "types of protections" for satellite competitors that Congress felt were necessary in the Cable Act, an aide says the new bill tries to "largely replicate those types of protections for online services to give them the type of breathing room they need to get access to the consumer and content and insure that the current market incumbents aren't preventing the rise of new, innovative services." There is no compelled access to content, they said, but "sort of a pathway to access to all sorts of content, including broadcast content.
Given that many over-the-top providers don't have access to transmission facilities, the bill wants to insure that consumers have access to any online video provider they wish, including limits on broadband providers, particularly those affiliated with a video service to "degrade, block or otherwise hamper the ability of the consumer to access online video over their home Internet service."
A D.C. appeals court is currently deciding how much power the FCC has under current statute to insure online access.
The bill would not define MVPD per se, but would say that over-the-top providers could, in essence, define themselves as an MVPD by adopting an MVPD-like model, triggering the application of similar rights and responsibilities as applied to satellite operators in the 1992 Cable Act.
"For those online services that seek to offer a cable-like service over the top, there is a series of provisions giving them regulatory parity with current MVPDs," said an aide. "What the bill seeks to set up is a new system at the FCC where an online service that wants to operate like a cable service can opt-in to a new regulatory category, then the FCC would be directed under the act to establish rights as well as responsibilities for such services that are equivalent to what cable operators have to operate under."
Well, not exactly. Unlike MVPDS, non-facilities-based online programming distributors would not be subject to network nonduplication or syndicated exclusivity rules, local franchising authorities or must-carry, and they would not be counted toward the FCC’s effective competition test for reducing regs on facilities-based providers.
The bill also includes a "truth in billing" protection for broadband Internet service, insuring that consumers get "clear and understandable" terms and conditions, and directs the FCC to monitor broadband billing practices.
The bill was described as a way for the chairman to "start a conversation about the best way to nurture new, innovative online services" so they can become a true competitor, said an aide. Rockefeller also saw the issue of truth in billing as related and a way to get at the issue of usage-based billing.
There are expected to be many such video reform conversations leading up to must-passage of the Satellite Television Extension and Localism Act, which could be the most likely vehicle for reforms given that it must either be renewed by the end of the year or it goes away.
The bill, which will be introduced this afternoon, is billed by the Rockefeller camp as a response to rising MVPD bills and little consumer control over channels purchased--in that way it is another tack to the same destination of the a la carte bill introduced earlier this year by Sen. John McCain (R-Ariz.). In fact, Rockefeller calls his bill the "ultimate" in a la carte.
In introducing the bill, the chairman suggested that there was mounting evidence that traditional media companies are attempting to stunt the growth of online competition via anticompetitive practices, including "limiting the availability of content on online platforms and degrading the experience of some online video platforms."
According to Rockefeller's office, the bill would:
"Bar cable, satellite, broadcast, and large media companies from engaging in anti-competitive practices against online video distributors. It gives all online video distributors fundamental competitive protections in the video marketplace similar to what satellite providers were given in the Cable Competition and Consumer Protection Act of 1992.
"Provide online video distributors with reasonable access to video programming and facilitate their ability to offer more consumer choice in programming and services. It puts reasonable limits on the use of contractual provisions in video programming carriage contracts that harm the growth of online video competition. It also explores ways for online video distributors to negotiate to carry broadcast television content and facilitate greater consumer choice in programming.
"Limit the ability of broadband providers to degrade competitive online video services, which maintains online video providers’ pipeline to consumers. This would protect online video distributors against anticompetitive practices by Internet service providers who are affiliated with traditional cable or satellite television providers.
Empower consumers with new truth-in-billing protections for broadband Internet service.
The pathway to broadcast content was not exactly clear, but would not include applying the must-carry regime to over-the-top providers. Instead, it would apply the carry one, carry all requirement that applies to satellite operators--if they carry any lcoal market TV stations, they must carry all.
"There is a provision that would allow online video providers a pathway to negotiate with both TV stations and networks, for content to make sure that everybody has the same level of access as everyone else." The FCC applied over-the-top access conditions to the Comcast/NBCU merger for the same reason.
And for over-the-top providers who adopt an MVPD-like structure, said one aide, the bill is similar to the current regime in which there is negotiation for local rights with the local stations, but it would be less like the must-carry regime and more like the carry one, carry all regimes that currently applies to satellite.
The bill would also make clear that if the courts determine that Aereo's remote antenna TV station online delivery service is not a performance requiring copyright payments, must carry would not apply to any "antenna rental" service.
The National Cable & Telecommunications Association suggested that instead of transplanting satellite regs to OVD's, Washington would be better of leveling the playing field by removing regs for everyone.
"Consumers today have an ever-growing roster of online video offerings in addition to robust multichannel video services. Services like Netflix already have almost 30 million U.S. subscribers – far larger than any single multichannel video provider," NCTA said in a statement. "In addition, Hulu, iTunes, Amazon Prime, Redbox, Vudu, Vimeo, Boxee, Roku, AppleTV and YouTube are providing consumers with increasing options for competitive entertainment choices, facilitated in large part by massive ongoing investments in broadband networks. In a world marked by such dynamism and robust competition, prudent policy dictates the removal of regulatory obstacles for all instead of creating marketplace disparities that would “cherry pick” rights and obligations for some. We deeply respect Chairman Rockefeller and look forward to working with him and all members of the Committee towards our mutual goal of ensuring that the video marketplace continues to thrive."
"NAB supports efforts to encourage the legal distribution of our highly-valued broadcast programming to on-line platforms, and we look forward to working with Chairman Rockefeller," said National Association of Broadcasters President Gordon Smith in a statement. "We remain concerned about proposals that may legitimize theft of copyrighted programming. Copyright theft poses a very real threat to the revenue stream that supports local television and the U.S. network-affiliate TV relationship that is the envy of the world."