A cable-competition law is off limits to video-streaming Web sites that want forced access to CNN and other popular cable networks that populate TV screens in millions of subscription-television homes, Turner Network Sales said Thursday in a Federal Communications Commission filing.
TNS took a stand in response to an FCC complaint filed last month by Virtual Digital Cable, a subscription-video Web site that became the first such entity to test whether it is protected by federal program-access laws. Those statutes effectively force satellite-delivered cable networks that are owned by cable operators to license their content to cable competitors like DirecTV, EchoStar Communications’ Dish Network and Verizon Communications’ FiOS TV.
TNS is a wholly owned subsidiary of Time Warner’s Turner Broadcasting System. Although VDC has demanded access to TNT, TBS, CNN and CNN Headline News, TNS argued that VDC can’t do so because, among other things, VDC isn’t a “multichannel-video-programming distributor” that offers “multiple channels of video programming” as those terms are defined in federal law and have been interpreted by the FCC.
“Because it makes available neither ‘video programming’ nor ‘multiple channels’ as those terms are defined, VDC is not an MVPD for purposes of the program-access rules and its complaint must be dismissed,” TNS said.
Turner explained that the FCC has consistently held that “video programming” has to be comparable to the video and audio quality of broadcast television. Internet video streams, TNS added, do not meet that standard.
And, TNS explained further, VDC isn’t an MVPD because that term is meant to apply to entities like cable and satellite providers with facilities to serve consumers directly. TNS described VDC as an “over-the-top” provider.
Congress passed the program-access law in 1992 as part of a broad effort to promote competition to dominant cable operators. The law forced Time Warner to sell HBO and other popular brands to DirecTV and Dish, which currently serve nearly 28 million subscribers combined. VDC is hoping the program-access laws can help it to achieve similar results.
In its 43-page response, TNS raised a host of legal and procedural concerns to justify rejection of the VDC complaint. If the FCC were to side with VDC, TNS noted "sweeping policy implications,” including that TNS would have to sell CNN to porn sites set up like VDC’s click-to-view system.
“The extension of FCC regulatory obligations or benefits to Internet-content providers is a step that must not be taken lightly,” TNS said.
Based in Northbrook, Ill., VDC has signed up just 1,000 customers to its $8.95 monthly service, mainly because it has been unable to license marquee cable-programming brands.
QVC had been part of its offering, but that network's parent, Liberty Media, ordered that the shopping channel's signal be pulled last Friday.