An Internet video-streaming company is trying to become the first Web-content provider to rely on a 1992 federal law to obtain mandatory access to cable programming with financial ties to cable operators, such as Comcast and Time Warner.
The 15-year-old program-access law -- which expires in October, unless extended by the Federal Communications Commission -- was designed to force the sale of popular cable-programming brands to help launch DirecTV and EchoStar Communications' Dish Network into viable pay TV rivals to cable incumbents. The programming covered by the rule must be satellite-delivered and affiliated with a cable operator.
But Virtual Digital Cable, based in Northbrook, Ill., said it filed a complaint last Friday in an effort to gain access to several Time Warner networks, including TNT, TBS, CNN and CNN Headline News. VDC streams linear programming channels over the Internet, charging $11.95 per month since launching last April.
Although the Time Warner networks are covered by the program-access rules, it's unclear whether VDC meets the definition in federal law of a multichannel-video-programming distributor entitled to obtain relief from the FCC.
The law defines an MVPD as “a person such as, but not limited to, a cable operator, a multichannel-multipoint-distribution service, a direct-broadcast satellite service, or a television receive-only satellite-program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming."
VDC's complaint raises novel regulatory questions, which can cause the FCC to take longer than normal to issue a ruling.
The agency took eight months, for example, to review a June 1999 petition by Internet Ventures (IVI) to rely on cable leased-access rules to obtain 6 megahertz of bandwidth to offer high-speed-Internet access in competition with cable-modem service. The FCC rejected the IVI petition, saying leased-access rules were not designed for third-party Internet-access providers.
VDC's complaint could ignite a debate over whether cable operators intend to withhold content to shield their cable businesses from Internet competition, which, ironically, cable operators themselves have largely enabled by investing heavily in broadband-access facilities.