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FCC Prepares to Define Online Video Providers as MVPDs

by Michael Goodman | Sep 30, 2014

As we noted in this July 2014 Digital Media Strategies Insight (Supreme Court Sides Strikes Down Aereo But Open the Door to Other OTT Providers) in the Supreme Court’s majority opinion they define Aereo as a “Cable Company.” According to Justice Breyer, “Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the law to reach.” Throughout the majority opinion the justices cite the similarities between streaming TV services and cable systems. 

Now the FCC is stepping through the door opened by the U.S. Supreme Court as it prepares to define Online Video Providers (OVD) that deliver a linear stream of programing as Multi-Channel Video Providers (MVPDs), similar to cable, telco, and satellite providers. This would reverse a prior FCC ruling that “that having a facilities-based transmission path was necessary to be an MVPD. It should be noted that this only applies to OVDs that provide a continuous linear stream of pre-scheduled programming, not Netflix or similar providers which provide on-demand video programmer without a linear lineup.

By defining Online Video Providers (OVDs) as MVPDs this ruling will even the competitive playing field for OVDs trying to create virtual MSOs and increase competition by giving them access to must have programming via the must-carry and retransmission consent rules, while simultaneously opening them up to program-carriage requirements.  This ruling, however, is not without challenges. As noted by the National Cable & Telecommunications Association this ruling has the potential to give rights to online entities the FCC does not track or license and may not have physical facilities in the U.S. That being said consumers will benefit from the increase competition.

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