[Federal Register Volume 80, Number 10 (Thursday, January 15, 2015)]
[Proposed Rules]
[Pages 2078-2091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30777]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MB Docket No. 14-261; FCC 14-210]
Promoting Innovation and Competition in the Provision of
Multichannel Video Programming Distribution Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission propose new rules designed to
better reflect the fact that video services are being provided
increasingly over the Internet. Specifically, we propose to modernize
our interpretation of the term ``multichannel video programming
distributor'' (``MVPD'') by including within its scope services that
make available for purchase, by subscribers or customers, multiple
linear streams of video programming, regardless of the technology used
to distribute the programming. Such an approach will ensure both that
incumbent providers will continue to be subject to the pro-competitive,
consumer-focused regulations that apply to MVPDs as they transition
their services to the Internet and that nascent, Internet-based video
programming services will have access to the tools they need to compete
with established providers.
DATES: Comments are due on or before February 17, 2015, and reply
comments are due on or before March 2, 2015.
ADDRESSES: You may submit comments, identified by MB Docket No. 14-261,
by any of the following methods:
Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Brendan Murray, [email protected], of the
Media Bureau, Policy Division, (202) 418-1573 or Mary Margaret Jackson,
[email protected] of the Media Bureau, (202) 418-1083.
For additional information concerning the information collection
requirements contained in this document, send an email to [email protected]
or contact Cathy Williams on (202) 418-2918.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking, FCC 14-210, adopted on December 17, 2014 and
released on December 19, 2014. The full text of this document is
available for public inspection and copying during regular business
hours in the FCC Reference Center, Federal Communications Commission,
445 12th Street SW., CY-A257, Washington, DC, 20554. This document will
also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents
will be available electronically in ASCII, Word 97, and/or Adobe
Acrobat.) The complete text may be purchased from the Commission's copy
contractor, 445 12th Street SW., Room CY-B402, Washington, DC 20554. To
request these documents in accessible formats (computer diskettes,
large print, audio recording, and Braille), send an email to
[email protected] or call the Commission's Consumer and Governmental
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
Executive Summary
In the Notice of Proposed Rulemaking (``NPRM''), we propose to
update our rules to better reflect the fact that video services are
being provided increasingly over the Internet. Specifically, we propose
to modernize our interpretation of the term MVPD by including within
its scope services that make available for purchase, by subscribers or
customers, multiple linear streams of video programming, regardless of
the technology used to distribute the programming. Such an approach
will ensure both that incumbent providers will continue to be subject
to the pro-competitive, consumer-focused regulations that apply to
MVPDs as they
[[Page 2079]]
transition their services to the Internet and that nascent, Internet-
based video programming services will have access to the tools they
need to compete with established providers. For readability throughout
the NPRM, we use the term ``Internet-delivered'' to refer to any
service delivered using IP whether or not it uses the public Internet,
except for cable service.
Here the Commission faces, as it has before, the impact of
technology transition. Incumbent cable systems have made plain their
intent to use a new transmission standard that will permit cable
systems to deliver video via IP, and other innovative companies are
also experimenting with new business models based on Internet
distribution. That is not surprising: Over-the-air television has moved
from analog transmission to digital. The telephone networks of the 20th
Century have become broadband networks, providing a critical pathway to
the Internet. And, in our January Technology Transitions Order, the
Commission encouraged experiments that assess the impact on consumers
of the coming transition from traditional copper facilities to new
telecommunications networks composed of fiber, copper, coaxial cable,
and/or wireless connections.
The Commission has recognized that innovation must be encouraged,
but not at the expense of technology-neutral public policies. That is
why the January Technology Transitions Order emphasized the importance
of preserving competition, consumer protection, and public safety. And
that is why the NPRM proposes to ensure that the rights and
responsibilities of an MVPD are not jeopardized by changes in
technology. This IP transition will enable cable operators to untether
their video offerings from their current infrastructure, and could
encourage them to migrate their traditional services to Internet
delivery. With these changes on the horizon, it becomes important to
interpret the statutory definition of MVPD to ensure that our rules
apply sensibly and in a way that encourages innovation regardless of
how service is delivered and that the pro-consumer values embodied in
MVPD regulation will continue to be served. In so doing, we take note
of the regulatory requirements that cable operators must adhere to as
they use new technology to offer services, and we invite comment on the
regulatory treatment of additional services that cable operators may
offer.
Adoption of a technology-neutral MVPD definition will not only
preserve current responsibilities, it may create new competitive
opportunities that will benefit consumers. Increasingly, companies--
incumbents and new entrants alike--are interested in using the Internet
as the transmission path for packages of video channels. In initiating
this proceeding, our goal is to bring our rules into synch with the
realities of the current marketplace and consumer preference where
video is no longer tied to a certain transmission technology.
Specifying the circumstances under which an Internet-based provider
may qualify as an MVPD, possessing the rights as well as
responsibilities that attend that status, may incent new entry that
will increase competition in video markets. In particular, extending
program access protections to Internet-based providers would allow them
to ``access[] critical programming needed to attract and retain
subscribers.'' And extending retransmission consent protections and
obligations to those providers would allow them to enter the market
``for the disposition of the rights to retransmit broadcast signals.''
Broadcast and cable-affiliated programming could make Internet-based
services attractive to customers, who would access the services via
broadband. The resulting increased demand for broadband may in turn
provide a boost to the deployment of high-speed broadband networks.
In the NPRM, we seek comment on possible interpretations of the
term MVPD as used in the Communications Act of 1934, as amended (the
``Act'') and seek comment on how each of those interpretations would
affect the industry and consumers. Below, we seek comment on two
possible interpretations: We propose to interpret the term MVPD to mean
distributors of multiple linear video programming streams, including
Internet-based services and tentatively conclude that this
interpretation is a reasonable interpretation of the Act, and is most
consistent with consumer expectations and conditions in the industry.
We also seek comment on an alternative interpretation that would
require a programming distributor to have control over a transmission
path to qualify as an MVPD and invite comment on whether this
interpretation is consistent with the Act and Congressional intent. We
also invite comment on how this interpretation would apply as companies
begin to offer subscription linear video services over the Internet.
We then seek comment on the effects that either interpretation
would have on entities that are classified as MVPDs, consumers, and
content owners. We seek comment on how each interpretation would
benefit and burden entities that would be subject to our rules. We also
ask whether we should consider exemption or waiver of certain
regulations, if allowed under the statute. We seek comment on whether
to modify our retransmission consent ``good faith'' negotiation rules
with respect to Internet-based MVPDs to protect local broadcasters. We
seek comment on what impact these interpretations would have on content
owners, including broadcasters and cable-affiliated programmers.
Finally, we seek comment on how to ensure that our interpretation will
promote competition and broadband adoption, consistent with the Act and
Commission policy.
We also note that the fact that an entity uses IP to deliver cable
service does not alter the classification of its facility as a cable
system and does not alter the classification of the entity as a cable
operator. In other words, those video programming services provided
over the operator's facilities remain subject to regulation as cable
services. We seek comment on the regulatory status of purely Internet-
based linear video programming services that cable operators and direct
broadcast satellite (``DBS'') providers may choose to offer in addition
to their traditional services.
I. Background
Section 602(13) of the Act 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.'' The Act also defines the terms ``channel'' and
``video programming,'' which are used in the MVPD definition. Section
602(4) defines ``channel'' as ``a portion of the electromagnetic
frequency spectrum which is used in a cable system and which is capable
of delivering a television channel (as television channel is defined by
the Commission by regulation).'' And Section 602(2) of the Act defines
``video programming'' as ``programming provided by, or generally
considered comparable to programming provided by, a television
broadcast station.''
On March 24, 2010, Sky Angel U.S., LLC (``Sky Angel''), a provider
of multiple streams of prescheduled programming over the Internet,
filed a complaint and petition for temporary standstill for program
access relief, which is available only to MVPDs. On April 21, 2010, the
Commission's Media Bureau denied the petition for standstill, holding
that Sky Angel failed
[[Page 2080]]
to carry its burden of demonstrating that it is likely to succeed in
showing on the merits that it is an MVPD entitled to seek relief under
the program access rules. The Media Bureau determined that the term
``channel'' as used in the definition of MVPD appears to include a
transmission path as a necessary element. Based on the limited record
at the time, the Bureau was unable to find that Sky Angel provides its
subscribers with a transmission path. Sky Angel's complaint, a second
petition for injunctive relief, a motion for sanctions, and discovery
requests are pending. In 2012, Sky Angel filed a Petition for Writ of
Mandamus with the United States Court of Appeals for the D.C. Circuit,
asking the court to require the Commission to adopt and release a final
order on the merits of its complaint, and the court denied the Petition
``without prejudice to renewal in the event of significant delay.'' In
March 2012, the Media Bureau issued a Public Notice in connection with
the Sky Angel complaint, seeking comment on the most appropriate
interpretation of the definition of an MVPD (the ``March 2012 Public
Notice'') to ensure that the Commission has the benefit of broad public
input. In June 2014, Sky Angel notified the Commission that it had
``suspended its video and audio distribution services'' in January 2014
because it is unable ``to acquire programming in a fair and
nondiscriminatory way.''
More recently, issues have arisen regarding the status of Aereo,
Inc., a former provider of online linear video programming, under the
Copyright Act and Communications Act. On June 25, 2014, the Supreme
Court found that Aereo violated certain copyright holders' exclusive
right to perform their works publicly as provided under the Copyright
Act. Aereo then filed with the Copyright Office to pay statutory
royalties to retransmit broadcast signals as a cable system. The
Copyright Office accepted the filing ``on a provisional basis,''
pending ``further regulatory or judicial developments,'' including this
Commission's interpretation of the term MVPD and the outcome of the
case that was pending before the U.S. District Court for the Southern
District of New York. On November 21, 2014, Aereo filed to reorganize
under Chapter 11 of the U.S. Bankruptcy Code.
Comments filed in response to the March 2012 Public Notice reveal a
wide range of views. By initiating this rulemaking proceeding, we
propose an interpretation that we based on many comments in the record
of that proceeding. But we continue to seek broad public input,
including discussions with stakeholders, which will fully inform us as
we seek to clarify the scope of the definition of MVPD. We note that
the Media Bureau recently changed the ex parte status of the March 2012
Public Notice. And today, the Bureau issued a decision holding the Sky
Angel proceeding in abeyance pending the outcome of this proceeding and
terminating the March 2012 Public Notice docket. These actions will
allow parties to discuss with the Commission the definitional and
policy issues raised herein without running afoul of the ex parte
rules.
II. Discussion
As discussed below, we tentatively conclude that the statutory
definition of MVPD includes certain Internet-based distributors of
video programming. Specifically, we propose to interpret the term MVPD
to mean all entities that make available for purchase, by subscribers
or customers, multiple streams of video programming distributed at a
prescheduled time. In reaching this conclusion, we understand that the
market for Internet-based distribution of video programming is nascent
and that companies continue to experiment with business models. The
current business models include, but are not limited to, the following
types of Internet-based video service offerings, including combinations
of these offerings: Subscription Linear. We use this term to refer to
Internet-based distributors that make available continuous, linear
streams of video programming on a subscription basis. This category
includes Sky Angel's service as it existed before 2014 and Aereo's
service as it existed before the Supreme Court decision. Subscription
On-Demand. We use this term to refer to Internet-based distributors
that make video programming available to view on-demand on a
subscription basis, allowing subscribers to select and watch television
programs, movies, and/or other video content whenever they request to
view the content without having to pay an additional fee beyond their
recurring subscription fee. This category includes Amazon Prime Instant
Video, Hulu Plus, and Netflix. Transactional On-Demand. We use this
term to refer to Internet-based distributors that make video
programming available to view on-demand, with consumers charged on a
per-episode, per-season, or per-movie basis to rent the content for a
specific period of time or to download the content for storage on a
hard drive for viewing at any time. This category includes Amazon
Instant Video, CinemaNow (Best Buy), Google Play, iTunes Store (Apple),
Sony Entertainment Network, Vudu (Walmart), and Xbox Video (Microsoft).
Ad-based Linear and On-Demand. We use this term to refer to Internet-
based distributors that make video programming available to view
linearly or on demand, with consumers able to select and watch
television programs, movies, and/or other video content whenever they
request on a free, ad-supported basis. This category includes Crackle,
FilmOn, Hulu, Yahoo! Screen, and YouTube as they exist today.
Transactional Linear. We use this term to refer to non-continuous
linear programming that is offered on a transactional basis. This
category includes Ultimate Fighting Championship's UFC.TV pay-per-view
service. We invite commenters to identify other categories and examples
of Internet-based distributors of video programming not mentioned here.
As explained below, we seek comment on our tentative conclusion
that entities that provide Subscription Linear video services are MVPDs
as that term is defined in the Act because they make multiple channels
of video programming available for purchase. We seek comment also on
whether any of the other categories of Internet-based distributors of
video programming identified above fall within the statutory definition
of an MVPD. Because these other Internet-based distributors of video
programming either (1) make programming available for free, and not
``for purchase'' as required by the definition of an MVPD, or (2) do
not provide prescheduled programming that is comparable to programming
provided by a television broadcast channel, we believe they fall
outside the statutory definition. We seek comment on this view.
Below, we begin by seeking comment on our proposed interpretation
of the definition of the term MVPD and on alternative interpretations.
We then seek comment on the public policy ramifications of these
alternatives and any other alternatives commenters may suggest. We note
that an entity that uses IP to deliver cable service does not alter the
classification of its facility as a cable system and does not alter the
classification of the entity as a cable operator. Finally, we seek
comment on how to treat Internet-based linear video programming
services that cable operators and DBS providers may choose to offer in
addition to their traditional services.
Defining MVPD. To qualify as an MVPD under the Communications Act,
an entity must ``make[] available for purchase, by subscribers or
customers,
[[Page 2081]]
multiple channels of video programming.'' The Commission has previously
held that video distributed over the Internet qualifies as ``video
programming.'' Thus, the key remaining definitional issue is how to
interpret the phrase ``multiple channels of video programming.'' We
seek comment on this issue as set forth below.
The Act defines a ``channel'' as ``a portion of the electromagnetic
frequency spectrum which is used in a cable system and which is capable
of delivering a television channel (as television channel is defined by
the Commission by regulation).'' As discussed in the Media Bureau's
March 2012 Public Notice and in further detail below, there are at
least two possible interpretations of the term ``channel'' within the
definition of MVPD. We tentatively conclude that the best reading is
that ``channels of video programming'' means streams of linear video
programming (the ``Linear Programming Interpretation''). Under this
interpretation, linear video programming networks, such as ESPN, The
Weather Channel, and other sources of video programming that are
commonly referred to as television or cable ``channels,'' would be
considered ``channels'' for purposes of the MVPD definition, regardless
of whether the provider also makes available physical transmission
paths. We also seek comment on an alternative interpretation under
which the definition of MVPD would include only entities that make
available transmission paths in addition to content, and thus exclude
those Internet-based distributors of video programming that do not own
or operate facilities for delivering content to consumers (the
``Transmission Path Interpretation''). We seek comment on which
interpretation is most consistent with the text, purpose, legislative
history, and structure of the Act and which interpretation best serves
Congressional intent. We also invite commenters to identify any other
interpretation of MVPD that is consistent with the statute and would
better serve Congressional intent. For example, some commenters call
for a ``functional equivalency'' standard, whereby an entity would
qualify as an MVPD if it looks and functions like a traditional MVPD
from the perspective of consumers; others suggest that Internet-based
distributors should be allowed to elect whether or not to avail
themselves of MVPD status, taking on both the benefits of such status
(such as program access) as well as the regulatory obligations. To the
extent that any commenters favor these or other interpretations, they
should explain how their proposed interpretation comports with the
statute, how it would be administered or adjudicated in particular
cases, and describe the policy ramifications.
Proposed ``Linear Programming Interpretation''. Under our proposed
rule, we would interpret the term ``channels of video programming'' to
mean prescheduled streams of video programming (which we refer to in
this NPRM as ``linear'' programming), without regard to whether the
same entity is also providing the transmission path. We believe that
this is the better interpretation for three reasons: (i) It is a
reasonable interpretation of the Act and most consistent with
Congressional intent, (ii) it best aligns with consumer expectations
and industry developments, and (iii) it is consistent with the common
meaning of the word channel. We seek comment on the interpretation as
set forth below. We seek comment also on our proposal to define
``linear video'' as a ``stream of video programing that is prescheduled
by the programmer.''
We tentatively conclude that our proposed Linear Programming
Interpretation is consistent with the language of the statute. The
statutory definition of MVPD begins by stating that an MVPD is 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 . . . .'' In
the Sky Angel Standstill Denial, the Media Bureau stated that, although
the list is preceded by the phrase ``not limited to,'' making it clear
that the list is illustrative rather than exclusive, it is also
preceded by the phrase ``such as,'' which suggests that other covered
entities should be ``similar'' to those listed. We tentatively conclude
that the essential element that binds the illustrative entities listed
in the provision is that each makes multiple streams of prescheduled
video programming available for purchase, rather than that the entity
controls the physical distribution network. Therefore, we believe that
our interpretation is consistent with the illustrative list of MVPDs
that the statutory definition provides.
In addition, the Commission has previously held that an entity need
not own or operate the facilities that it uses to distribute video
programming to subscribers in order to qualify as an MVPD. Rather, an
MVPD may use a third party's distribution facilities in order to make
video programming available to subscribers. We find, therefore, that
our proposed interpretation is consistent with Commission precedent. We
seek comment on this finding.
We also find the term ``channel'' used in the context of the MVPD
definition (i.e., ``multiple channels of video programming'') to be
ambiguous. Further, we tentatively conclude that Congress did not
intend the term ``channel'' in this context to be interpreted in
accordance with the definition in Section 602(4) of the Act, but rather
intended the term to be given its ordinary and common meaning. The Act
states that ``the term `cable channel' or `channel' means a portion of
the electromagnetic frequency spectrum which is used in a cable system
and which is capable of delivering a television channel (as television
channel is defined by the Commission by regulation). This definition
was adopted in the 1984 Cable Act, which focused primarily on the
regulation of cable television. In contrast, the term ``MVPD'' was
adopted by Congress eight years later in 1992, when new competitors to
cable were emerging, and is specifically ``not limited'' solely to
cable operators. Therefore, we tentatively conclude that we should not
rely on the cable-specific definition of the term ``channel'' to
interpret the definition of ``MVPD,'' which is explicitly defined to
encompass video programming distributors that include, but are not
limited to, cable operators.
Moreover, using the cable-specific definition of ``channel'' to
interpret the definition of ``MVPD'' does not seem consistent with the
illustrative list of MVPDs that is included in the definition. For
example, DBS providers are specifically included in the definition as
MVPDs, but the linear streams of video programming that they provide to
subscribers do not align with the definition of ``channel'' in Section
602(4) of the Act, because that definition specifically refers to the
electromagnetic spectrum ``used in a cable system.'' If Congress
intended an entity to have control over the transmission path in order
to be deemed an MVPD, presumably it would have explicitly specified
that in the definition of MVPD, as it did with the definition of cable
system. Therefore, we tentatively conclude that, when Congress defined
an MVPD as an entity that ``makes available . . . channels of video
programming,'' it did not intend to limit the types of entities that
meet the definition to only those that control the physical method of
delivery (i.e., a transmission path). As a consequence, we believe that
this is a reasonable
[[Page 2082]]
interpretation of the Act. We seek comment on this position.
We believe that our proposed interpretation is consistent with
Congress's intent to define ``MVPD'' in a broad and technology-neutral
way to ensure that it would not only cover video providers using
technologies that existed in 1992, but rather be sufficiently flexible
to cover providers using new technologies such as Internet delivery.
The Act imposes important pro-consumer responsibilities on MVPDs. As
incumbent MVPDs transition to IP delivery, we must ensure that the
definition of MVPD is read broadly enough to ensure that consumers do
not lose the benefits those provisions are intended to confer. For
example, we note that the goals of the program access provision of the
Cable Television Consumer Protection and Competition Act of 1992
(``1992 Cable Act'') are to increase competition and diversity in the
video programming market, to increase the availability of programming
to persons in rural areas, and to spur the development of
communications technologies. It would frustrate those goals to exclude
from coverage new technologies and services that develop. Consumers are
watching more online subscription video, and incumbent operators and
new entrants alike are experimenting with or planning to launch linear
video services over the Internet. Therefore, we tentatively conclude
that the Linear Programming Interpretation is most consistent with
consumer expectations and industry trends, and we believe that
Congress's goals are best served by an interpretation of MVPD that
accommodates changing technology. We seek comment on our tentative
conclusion that our proposed interpretation is most consistent with
consumer expectations and industry trends. To the extent that
commenters disagree with our interpretation, they should address why an
interpretation of MVPD that focuses on the physical delivery method an
entity uses to provide video programming (i) would serve Congress's
goals, (ii) would promote innovation, and (iii) is consistent with the
statute.
Finally, certain commenters suggest that the term ``channel'' can
be interpreted both in the ``content'' sense and in the ``container''
sense: ``In a video context, the Act uses the term both in a
`container' sense, to refer to a range of frequencies used to transmit
programming, and in a `content' sense to refer to the programming
itself, or the programmer.'' Those commenters argue that, based on the
context, the content sense applies when interpreting the definition of
MVPD, ``since only that reading is consistent with the Act's pro-
competitive purposes.'' We note that the legislative history of the
1992 Cable Act refers to ESPN as a ``sports channel'' and CNN as a
``news channel''; given that both of these are linear programming
networks, this suggests that Congress used the term channel, at least
in this instance, to refer to such programming networks and not to
portions of the electromagnetic frequency spectrum. Commenters provide
numerous examples of the use of the term ``channel'' in both the
content sense (i.e., a linear video programming network) and the
container sense (i.e., a range of frequencies used to transmit
programming) in everyday usage and in dictionaries, as well as by
Congress and the Commission. Because the term ``channel'' as used in
the definition of MVPD is ambiguous, we tentatively conclude that it is
reasonable to read the term to have its common, everyday meaning of a
stream of prescheduled video programming when we interpret the
definition of MVPD. As discussed above, we believe our proposed
interpretation is most consistent with the Act's goals of increased
video competition and broadband deployment. In addition, we believe
that it is most consistent with consumer expectations because consumers
are focused on the content they receive, rather than the specific
method used to deliver it to them. We seek comment on this tentative
conclusion.
Scope of the Linear Programming Interpretation. We also seek
comment on whether, under the Linear Programming Interpretation, we can
and should carve out certain types of entities that make available
multiple linear streams of video programming from the MVPD definition.
If we interpret ``multiple channels of video programming'' to mean
multiple linear streams of video programming, could we, consistent with
the statute, narrow the category of entities that would qualify as
MVPDs? For example, are there niche online subscription programming
providers or other small entities that would not be able to remain in
business if they qualify as MVPDs? A ``multichannel'' video programming
distributor is required by definition to make multiple channels of
video programming available. We seek comment on how to interpret the
term ``multiple'' in the definition of MVPD. Although we believe it is
important to modernize our interpretation of MVPD to capture entities
that provide service similar to or competitive with more traditional
MVPD service but through new distribution methods, we also wish to
ensure that our rules do not impede innovation by imposing regulations
on business models that may be better left to develop unfettered by the
rules applicable to MVPDs. Should we interpret the term MVPD to require
that a certain number of channels of video programming, such as twenty,
be made available? Would twenty channels be too low or too high? Is
there justification for a different number? What if an entity makes
multiple channels available nationwide, but makes only one channel
available for purchase to each subscriber? Should we interpret the term
``channels of video programming'' to require a certain number of
programming hours per day or per week or to exempt certain niche
programmers? Is there justification to require eighteen hours of
programming per day, seven days per week, or some other number? We
tentatively conclude that an entity that makes linear services
available via the Internet is an MVPD, and our regulations apply to all
of the MVPD's video services. Are there other factors that we should
consider? For example, should we exempt from the interpretation of
linear programming discrete, intermittent events that occur at
prescheduled times, such as live individual sporting events? While
these events are prescheduled by the programming provider, they are
presented sporadically, in contrast to most television channels that
broadcast continuously throughout the day. If such events are
considered linear programming, our proposed Linear Programming
Interpretation would appear to apply to online subscription video
packages that stream multiple sporting events, such as those offered by
Major League Baseball, Major League Soccer, the National Basketball
Association, and the National Hockey League. We seek comment on whether
distributors of these types of services should be included within our
interpretation of MVPD and, if not, on the statutory basis for
excluding them and bright-line tests that we could use to evaluate
whether such an exclusion would apply.
We tentatively conclude that we should interpret MVPD so that the
definition would not apply to a distributor that makes available only
programming that it owns--for example, sports leagues or stand-alone
program services like CBS's new streaming service. A potential
consequence of the Linear Programming Interpretation would be that a
programmer that decides to sell two or more of its own
[[Page 2083]]
programming networks directly to consumers online, either instead of or
in addition to selling them through cable or DBS operators' programming
packages, might subject itself to the benefits and burdens of MVPD
status. For example, if Disney were to offer, for purchase by
subscribers, a package of linear feeds of the Disney Channel, Disney
XD, and Disney Junior for online streaming to customers, would that
make Disney an MVPD? Would this unduly limit consumer options? Would
bringing such an offering into our MVPD regulations discourage
innovation? We seek comment on our statutory authority to adopt our
tentative conclusion.
Under the Act, an entity is an MVPD only if it makes multiple
channels of video programming ``available for purchase.'' We seek
comment on what it means to make video programming available for
purchase, particularly as that term would apply if we were to adopt our
proposed Linear Programming Interpretation. We tentatively conclude
that the term means making an offer to consumers to exchange video
service for money. We seek comment on this tentative conclusion. Are
there other forms of consideration that a consumer could use to
purchase services? If a cable or satellite company offers its
subscribers access to supplemental online linear video services without
a separate charge, but as part of their paid television packages, does
this offering constitute making the online services ``available for
purchase''? Do any cable or satellite companies charge subscribers for
those services indirectly? Is there any way to trace general
subscription fees specifically to supplemental online linear video
services? We seek comment on how our proposed interpretation could
affect new business models that do not conform with the traditional
monthly subscription model, and whether we should treat those business
models on a case-by-case basis.
We also seek comment on how our proposed interpretation would apply
to entities that are located overseas but make linear video programming
networks available for purchase in the United States over the Internet.
An entity could meet the definition of MVPD under our proposed
definition even if it has no physical presence in the United States. We
tentatively conclude that the Commission should not assert jurisdiction
over these entities. If commenters disagree, they should provide the
authority under which the Commission could assert jurisdiction. If we
assert jurisdiction solely over entities with a physical presence in
the United States, will some Internet-based distributors of video
programming locate their operations overseas to avoid Commission
regulation? Would the alternative interpretation discussed below, which
would consider an entity to be an MVPD only if it maintains control
over a transmission path, avoid this result by requiring an MVPD to
have a jurisdictional presence in the United States?
Alternative ``Transmission Path Interpretation''. We seek comment
also on an alternative approach that would interpret the term channel
in this context as requiring a transmission path. This is the approach
for which the Media Bureau expressed tentative support in denying Sky
Angel's standstill request. Citing the statutory definition of
``channel'' as ``a portion of the electromagnetic frequency spectrum
which is used in a cable system and which is capable of delivering a
television channel,'' the Media Bureau expressed the tentative view
that the term ``channel'' as used in the definition of MVPD ``appear[s]
to include a transmission path as a necessary element.'' Under this
interpretation, we would not consider Internet-based linear video
providers to be MVPDs unless they control at least some portion of the
physical means by which the programming is delivered--for example, via
a physical cable that the provider owns or via spectrum that the
provider is licensed to use. We seek comment on the Transmission Path
Interpretation. How would we reconcile the Transmission Path
Interpretation with previous Commission decisions that held that an
entity need not own or operate the facilities that it uses to
distribute video programming to qualify as an MVPD? Would an entity
have to make available multiple transmission paths (or, using the
language in the definition of ``channel,'' multiple ``portions of the
electromagnetic frequency spectrum'') to each subscriber or customer to
qualify as an MVPD? Do all traditional MVPDs make available multiple
``portions of the electromagnetic frequency spectrum'' to each
subscriber or customer, including cable operators using switched
digital video technology or an IP-based system in which no unique
transmission path is associated with any video programming stream? Is
there a reasonable basis to believe that Congress intended to regulate
as MVPDs only those entities that make available two or more
transmission paths to each subscriber or customer, but not those that
make available only one transmission path? If we adopt the Transmission
Path Interpretation, how can we ensure that our regulations keep up
with technology, particularly as incumbent MVPDs transition their
services to Internet delivery?
We also seek comment on whether Congress intended to promote only
facilities-based competition in the video distribution market, which
might support the Transmission Path Interpretation. The Conference
Report accompanying the 1992 Cable Act includes a statement that
Congress intended to promote ``facilities-based'' competition.
Moreover, the Commission has previously stated that `` `[f]acilities-
based competition' is a term used in the legislative history of the Act
to emphasize that program competition can only become possible if
alternative facilities to deliver programming to subscribers are first
created. The focus in the 1992 Cable Act is on assuring that
facilities-based competition develops.'' On the other hand, the ABC/
CBS/NBC Affiliates note that ``there is but one reference to
`facilities-based competition' in the lengthy House Report. . . .
Certainly, that single reference cannot support the incorporation of a
`transmission path' requirement into a statutory definition that does
not, on its face, contain any such restriction.'' Accordingly, we seek
comment on whether Congress sought to increase facilities-based
competition exclusively, or sought to encourage competition to
incumbent cable operators more generally, regardless of how the
competitive service is delivered.
Scope of the Transmission Path Interpretation. As we note above,
incumbent MVPDs are obtaining rights to distribute content online at a
rapid pace and appear prepared to launch online linear video services
that are not tied to their facilities. We seek comment on our
regulatory authority under the Transmission Path Interpretation in
these cases. The Transmission Path Interpretation seems difficult to
apply in certain cases because an entity's status would change
depending on how and where the subscriber receives the content. For
example, consider a subscriber who views video at her home on a tablet
over broadband infrastructure that the video distributor owns, and then
visits a local coffee shop and views video on that same tablet via the
Internet using broadband infrastructure that the video distributor does
not own. In that case, the video provider would be an MVPD at the
subscriber's home, but not at the coffee shop. We believe that this
would lead to regulatory uncertainty, thus providing
[[Page 2084]]
more support for the Linear Programming Interpretation. We seek comment
on this analysis.
We invite comment on any other interpretation the Commission should
consider in addition to the Linear Programming Interpretation and the
Transmission Path Interpretation.
Regulatory Implications of Alternative Interpretations. Below, we
seek comment on the policy ramifications of the various interpretations
set forth above. To the extent possible, we encourage commenters to
quantify any costs and benefits and submit supporting data. In addition
to the specific effects that we ask about below, we invite commenters
to identify other possible effects of the Linear Programming
Interpretation and the Transmission Path Interpretation and how those
effects should influence our interpretation.
We realize that under our proposed Linear Programming
Interpretation, several new and planned services may be considered MVPD
services. On the one hand, DISH, Sony, and Verizon have each announced
linear Internet-based subscription video services whose launch is
imminent. These services reportedly will carry programming from some of
the largest content companies in the world. On the other hand, Aereo,
FilmOn, and Sky Angel launched or planned to launch Internet-based
subscription video services, but they claim that regulatory uncertainty
has limited their ability to develop a subscriber base, limited
investment in their services, and hindered their ability to compete. In
light of these contrasting examples, we seek comment on whether the
privileges and obligations set forth in this section tilt in favor of
or against our proposed Linear Programming Interpretation. Would the
proposal (i) give innovative companies access to programming that
consumers want, or (ii) unduly and unnecessarily burden companies
seeking to offer innovative new services?
Application of MVPD-Specific Regulatory Privileges and Obligations
to Internet-Based Distributors of Video Programming. As discussed in
further detail below, our proposed interpretation would ensure that
incumbent MVPDs do not evade our regulations by migrating their
services to the Internet. It would also allow Internet-based
distributors of video programming, including those that do not control
any facilities, to take advantage of the privileges of MVPD status but
would also require them to comply with the legal obligations applicable
to MVPDs. Conversely, the Transmission Path Interpretation could allow
many if not most Internet-based distributors of video programming to
avoid regulation, including obligations that promote important public
interest benefits, and would also deprive them of certain regulatory
privileges. We seek comment on these policy ramifications below.
General Privileges and Obligations. An entity that meets the
definition of an MVPD is subject to both privileges and legal
obligations under the Communications Act and the Commission's rules.
The regulatory privileges of MVPD status include the right to seek
relief under the program access rules and the retransmission consent
rules. Among the regulatory obligations of MVPDs are statutory and
regulatory requirements relating to (i) program carriage; (ii) the
competitive availability of navigation devices (including the
integration ban); (iii) good faith negotiation with broadcasters for
retransmission consent; (iv) Equal Employment Opportunity (``EEO'');
(v) closed captioning; (vi) video description; (vii) access to
emergency information; (vi) signal leakage; (vii) inside wiring; and
(viii) the loudness of commercials.
To the extent that an Internet-based distributor of video
programming falls within the definition of an MVPD, it will be able to
take advantage of the privileges of MVPD status but will also be
subject to MVPD obligations, unless the Commission waives some or all
of them if authorized to do so. We seek comment on the overall costs
and benefits of applying these regulatory privileges and obligations to
Internet-based distributors of video programming, including incumbent
operators who migrate to Internet delivery. We also seek comment on
specific privileges and obligations below. Would waiver or exemption
from certain regulations be an appropriate approach for regulating
Internet-based distributors? If so, what regulations should be waived
or modified to exempt Internet-based distributors, and do we have
authority to do so under the Act? Alternatively, does the statute
permit us to allow these entities to choose whether they wish to be
classified as MVPDs?
Would subjecting Internet-based distributors to MVPD regulations
deter investment in new technologies and drive some current or
prospective Internet-based distributors from the market? On the other
hand, would subjecting Internet-based distributors to MVPD regulations
provide regulatory certainty that could reassure consumers and spur
investment by service providers? To what extent should we consider
increasing consumer adoption of non-traditional MVPDs as a factor in
regulatory treatment of entities that provide similar services but use
different delivery mechanisms? If Internet-based distributors compete
with traditional MVPDs, should they be subject to the same regulatory
obligations as traditional MVPDs?
Specific Privileges. Below, we seek comment on the specific
privileges of MVPD status and how they would apply to Internet-based
distributors of video programming. Would applying the privileges of
MVPD status to Internet-based distributors of video programming impose
costs on third parties, such as cable-affiliated programmers and
broadcasters? To what extent would the public be harmed if these
privileges did not extend to Internet-based distributors of video
programming?
Program Access. As required by Section 628 of the Act, the
Commission's program access rules provide certain protections to MVPDs
in their efforts to license cable-affiliated programming. These rules:
(i) Prohibit a cable operator or its affiliated, satellite-delivered
programmer from engaging in ``unfair methods of competition or unfair
or deceptive acts or practices'' that have the ``purpose or effect'' of
``hinder[ing] significantly or prevent[ing]'' an MVPD from providing
programming to subscribers or consumers (the ``unfair act''
prohibition); (ii) prohibit a cable operator from unduly or improperly
influencing the decision of its affiliated, satellite-delivered
programmer to sell, or unduly or improperly influencing the
programmer's prices, terms, and conditions for the sale of, satellite-
delivered programming to any unaffiliated MVPD (the ``undue or improper
influence'' rule); and (iii) prohibit a cable-affiliated, satellite-
delivered programmer from discriminating in the prices, terms, and
conditions of sale or delivery of satellite-delivered programming among
or between competing MVPDs (the ``non-discrimination'' rule). To the
extent that an MVPD believes that a cable-affiliated programmer has
violated these rules, it may file a complaint with the Commission.
If the program access rules were to apply, would cable-affiliated
programmers be required to negotiate with and license programming to
potentially large numbers of Internet-based distributors? How will this
impact the value of cable-affiliated programming to traditional MVPDs,
especially as compared to non-cable-affiliated programming? To the
extent that licensing programming to a
[[Page 2085]]
particular Internet-based distributor presents reasonable concerns
about signal security and piracy, do the program access rules
adequately address this issue by recognizing these concerns as a
legitimate reason for a cable-affiliated programmer to withhold
programming from an MVPD? Would extending the reach of the program
access rules have a positive effect for consumers?
We also seek comment on whether and how our proposed rule and
alternative interpretations would impact competition in the video
distribution market (both at present and in the future), specifically
with respect to the program access rules. Among other things, the
program access rules are intended to prevent cable-affiliated
programmers from discriminating among similarly situated MVPDs. If
Internet-based distributors of video programming are deemed not to be
MVPDs because they do not make available transmission paths (and
therefore are ineligible for the benefits of the program access rules),
would there be any regulatory or other constraint that would prevent a
cable-affiliated programmer from making its affiliated programming
available for online distribution to only certain Internet-based
distributors of video programming, such as those owned by its
affiliated cable operator, but not to those owned by other MVPDs? In
such a scenario, because the cable-affiliated programmer would not be
differentiating among ``MVPDs,'' would different treatment be
permissible under the program access rules? How would this impact
competition in the video distribution market? Cablevision contends that
extending the program access rules to Internet-based distributors would
give them too much flexibility compared to existing MVPD competitors.
Is this a concern that we should consider, and if so, why? We note that
the Commission receives few program access complaints; should this
affect our analysis? Or does it reflect that programmers are following
our program access rules and they are working?
Retransmission Consent. Section 325(b) of the Act benefits MVPDs by
requiring broadcasters to negotiate in good faith with MVPDs for
retransmission consent and prohibiting broadcasters from negotiating
exclusive retransmission consent agreements with any MVPD. Absent these
provisions, broadcasters could potentially refuse to negotiate with and
thereby withhold their signals from MVPDs that wish to carry these
signals. To the extent that an MVPD believes that a broadcaster has
violated these provisions, it may file a complaint with the Commission.
We seek comment on the impact that our proposed interpretation of
the definition of MVPD and alternative interpretations would have on
the retransmission consent process. Under our proposal, would the
retransmission consent rules force broadcasters to negotiate with and
license their signals to potentially large numbers of Internet-based
distributors? We seek comment also on whether and how competition in
the video distribution market (both at present and in the future) would
be impacted if Internet-based distributors of video programming are not
considered MVPDs and therefore are not able to benefit from the
retransmission consent rules.
Section 325(b)(1)(A) of the Act provides that ``no cable system or
other multichannel video programming distributor'' shall retransmit a
broadcast signal without the broadcaster's consent. But an entity
wishing to retransmit a broadcast signal also must obtain authorization
to publicly perform the copyrighted works within the broadcast signal.
If we adopt the Linear Programming Interpretation and the Copyright
Office does not afford statutory licenses to Internet-based video
providers, how would we construe a broadcaster's obligation to
negotiate in good faith? What effect should the answer to that question
have on our policy analysis?
Specific Obligations. Below, we seek comment on specific
obligations imposed on MVPDs and how those obligations would apply to
Internet-based distributors of video programming. How costly would it
be for Internet-based distributors of video programming to comply with
these regulations? Would the public be harmed if these obligations did
not extend to Internet-based distributors of video programming and such
distribution became prevalent?
The interpretation of MVPD that we ultimately adopt in this
proceeding may subject certain Internet-based distributors of video
programming to Commission regulation that are not currently subject to
such regulation. What transition period should we allow these entities
to come into compliance with each of the relevant rules?
Program Carriage. The program carriage rules prohibit MVPDs from
(i) requiring a financial interest in a video programming vendor's
program service as a condition for carriage; (ii) coercing a video
programming vendor to provide, or retaliating against a vendor for
failing to provide, exclusive rights as a condition of carriage; or
(iii) unreasonably restraining the ability of an unaffiliated video
programming vendor to compete fairly by discriminating in video
programming distribution on the basis of affiliation or nonaffiliation
of vendors in the selection, terms, or conditions for carriage. To the
extent that a programming vendor believes that an MVPD is not in
compliance with these rules, it may file a complaint with the
Commission.
What practical impact, if any, would these rules have on Internet-
based distributors of video programming? As we note above, large,
established cable operators, DBS providers, and technology companies
have announced plans to launch Internet-based video programming
services that would be MVPD services under the Linear Programming
Interpretation. If these companies follow through with these plans,
absent application of the program carriage rules there may be no
regulatory constraint preventing them from demanding a financial
interest or exclusive rights from programmers as a condition for
carriage. Does this argue in favor of adopting an interpretation of
MVPD that would cover providers of these services under the program
carriage rules? Moreover, as more Internet-based distributors invest in
their own programming, they may have an incentive to favor their
affiliated programming over unaffiliated programming on the basis of
affiliation. We seek comment on the effect that the alternative
interpretations will have on negotiations with programmers and
Internet-based video programming services. What are the costs and
benefits of applying the program carriage obligations to Internet-based
video programming services?
Retransmission Consent. As discussed above, Section 325(b)(1)(A) of
the Act provides that ``No cable system or other multichannel video
programming distributor shall retransmit the signal of a broadcasting
station, or any part thereof, except--(A) with the express authority of
the originating station. . . .'' Thus, to the extent that an Internet-
based distributor of video programming qualifies as an MVPD, it must
receive the consent of the broadcaster before retransmitting the
broadcaster's signal. Moreover, Section 325(b) of the Act imposes an
obligation on MVPDs to negotiate in good faith with broadcasters in
obtaining retransmission consent. If a broadcaster believes that an
MVPD has violated these provisions, it may file a complaint with the
Commission.
We seek comment above on how the retransmission consent rules can
benefit
[[Page 2086]]
MVPDs, as we propose to interpret that term. We now seek comment on the
practical impact the obligations of MVPDs under the retransmission
consent rules would have on Internet-based distributors of video
programming that qualify as MVPDs. What impact will the obligation to
negotiate in good faith with broadcasters have on the resources of
Internet-based distributors of video programming that qualify as MVPDs?
In particular, will Internet-based distributors of video programming
that operate on a nationwide basis have to engage in negotiations with
thousands of broadcasters throughout the nation?
Are some Internet-based distributors of video programming likely to
prefer not to carry broadcast signals? For example, to the extent that
an Internet-based provider provides service nationwide it may prefer
not to offer local content. In that case, would the good faith
negotiation requirements allow these distributors to simply reject all
carriage terms offered by a broadcaster and to refrain from making any
carriage offers of their own? Or, would this conduct amount to a
violation of the duty to negotiate in good faith? Would it matter
whether the distributor declined to negotiate with any broadcast
stations? How will the answers to these questions impact the business
models of Internet-based distributors of video programming that qualify
as MVPDs but would prefer not to carry broadcast signals? Is it likely
or possible that Internet-based distributors will want to carry
broadcast network programming, or to carry broadcast stations
nationwide?
How do network affiliation agreements impact the carriage of
broadcast stations on Internet-based MVPDs? Specifically, to what
extent do existing network affiliation agreements limit or prohibit
local network stations' ability to grant retransmission consent rights
to Internet-based MVPDs? For example, do any network affiliation
agreements prohibit a local network-affiliated station from permitting
the retransmission of the entirety of its signal over the Internet? Do
they limit the retransmission of network programming over the Internet?
Would limiting or prohibiting these provisions harm localism?
Other MVPD Obligations. Closed Captioning. Section 79.1 of the
Commission's rules (the ``television closed captioning rules'')
requires MVPDs to provide closed captioning, defined as the ``visual
display of the audio portion of video programming pursuant to the
technical specifications set forth in this part.'' Internet video
services are not subject to these requirements. Internet-based
distributors of video programming, however, are subject to the
Commission's Internet protocol (``IP'') closed captioning requirements
set forth in Sec. 79.4 of the Commission's rules (the ``IP closed
captioning rules'') to the extent that they make video programming
available directly to end users through a distribution method that uses
IP. The IP closed captioning rules are narrower than the television
closed captioning rules, insofar as the IP closed-captioning rules
require closed captioning of IP-delivered video programming only if the
programming is published or exhibited on television with captions,
whereas the television closed captioning rules require closed
captioning for all new nonexempt English- and Spanish-language video
programming. The Commission has explained that the ``IP closed
captioning rules do not apply to traditional managed video services
that MVPDs provide to their MVPD customers within their service
footprint, regardless of the transmission protocol used; rather, such
services are already subject to Sec. 79.1 of the Commission's rules.''
To the extent that some Internet-based distributors of video
programming qualify as MVPDs, how will this impact their obligations
with respect to closed captioning? Will they be subject to Sec. 79.1
or Sec. 79.4 of the Commission's rules, or will the Commission need to
develop another set of requirements tailored to these services? Will we
need to amend our closed captioning rules if we adopt the Linear
Programming Interpretation, and if so, how?
Video Description. As required by the Twenty-First Century
Communications and Video Accessibility Act of 2010, the Commission's
rules require MVPD systems that serve 50,000 or more subscribers to
provide 50 hours per quarter of video description, which makes video
programming accessible to people who are blind or visually impaired, on
each of the five most popular nonbroadcast networks. In general, MVPDs
of any size must pass through any video description provided with
programming they carry, including broadcast channels, as long as they
have the technical capability to do so. Section 79.105 of the
Commission's rules requires apparatus designed to receive or play back
video programming to decode and make available the secondary audio
stream, if technically feasible, to facilitate the transmission and
delivery of video description. We seek comment on the costs as well as
the practical impact these obligations will have on an Internet-based
distributor of video programming that qualifies as an MVPD. Are there
attributes of Internet-based distributors of video programming that
make compliance with these requirements more burdensome than for
traditional MVPDs? We also seek comment on our authority to extend our
video description regulations to Internet-delivered MVPDs under the
Linear Programming Interpretation. Will we need to amend our video
description rules if we adopt the Linear Programming Interpretation,
and if so, how?
Accessibility of Emergency Information. Section 79.2 of the
Commission's rules requires MVPDs to comply with certain requirements
pertaining to the accessibility of emergency information by persons
with disabilities. And to make emergency information accessible to
individuals who are blind or visually impaired, Sec. 79.105 of the
Commission's rules requires apparatus designed to receive or play back
video programming to decode and make available the secondary audio
stream, if technically feasible. We seek comment on the costs as well
as the practical impact these obligations will have on Internet-based
distributors of video programming that qualify as MVPDs. Will we need
to amend our emergency information accessibility rules if we adopt the
Linear Programming Interpretation, and if so, how?
Accessible User Interfaces, Guides, and Menus. Section 79.108 of
the Commission's rules requires MVPDs to ``ensure that the on-screen
text menus and guides provided by navigation devices for the display or
selection of multichannel video programming are audibly accessible in
real time upon request by individuals who are blind or visually
impaired.'' We seek comment on the costs and the practical impact these
obligations will have on Internet-based distributors of video
programming that qualify as MVPDs, particularly in light of the fact
that digital apparatus (aside from navigation devices) that are
designed to receive digital video (including IP video) must be
accessible to and useable by individuals who are blind or visually
impaired. Will we need to amend our user interface accessibility rules
if we adopt the Linear Programming Interpretation, and if so, how?
Equal Employment Opportunities (``EEO''). The Commission's EEO
rules apply to MVPDs. In general terms, these rules (i) require MVPDs
to provide equal opportunity in employment to all qualified persons and
prohibit MVPDs
[[Page 2087]]
from discriminating in employment based on race, color, religion,
national origin, age, or sex; (ii) require MVPDs to engage in certain
outreach and recruitment activities; and (iii) require MVPDs to comply
with certain reporting and recordkeeping requirements. We seek comment
on the practical impact these obligations will have on Internet-based
distributors of video programming that qualify as MVPDs. Do Internet-
based distributors of video programming currently meet some or all of
these requirements? Will we need to amend our EEO rules if we adopt the
Linear Programming Interpretation, and if so, how?
Navigation Devices. Section 629 of the Act directs the Commission
to adopt regulations to assure the commercial availability of
navigation devices used by consumers to access services from MVPDs. The
Commission has adopted several regulations that allow consumers to
attach non-harmful devices to MVPD networks, require MVPDs to offer
separate conditional access elements if they use navigation devices to
perform conditional access functions, and prohibit MVPDs from using
integrated conditional access in the devices that they lease or sell to
their consumers. We seek comment on the practical impact as well as the
costs these obligations will have on Internet-based distributors of
video programming that qualify as MVPDs. To what extent do Internet-
based distributors of video programming use navigation devices in the
provision of their video programming service? If they do use such
devices, do they currently meet these requirements? What devices do
they use to provide programming to subscribers? Sky Angel, for example,
states that its service cannot be viewed without its ``proprietary set-
top box, which Sky Angel directly and remotely controls at all times
for purposes ranging from periodic service and software updates to
service activation or termination.'' Do Internet-based distributors
meet the requirements for an exemption from the integration ban? Are
there aspects of Internet-based video services that make compliance
with these requirements more burdensome than for traditional MVPDs?
Will we need to amend our navigation device rules if we adopt the
Linear Programming Interpretation, and if so, how?
Signal Leakage. The Commission's rules require specified MVPDs to
comply with certain technical rules pertaining to signal leakage, as
well as reporting and notification requirements related thereto. We
expect that in general MVPDs that use Internet protocol to deliver
video will not use aeronautical frequencies and thus will not be
subject to these requirements. We seek comment on this expectation, and
any practical impact these obligations will have on Internet-based
distributors of video programming that qualify as MVPDs. Will we need
to amend our signal leakage rules if we adopt the Linear Programming
Interpretation, and if so, how?
Inside Wiring. The Commission's cable inside wiring rules apply to
all MVPDs. In general terms, these rules govern the disposition of home
wiring and home run wiring after a subscriber terminates service. To
what extent, if any, would these obligations affect Internet-based
distributors of video programming that qualify as MVPDs, especially if
they do not control the ``last mile'' of the transmission path used to
deliver video programming to consumers but are affiliated with an
entity that controls the transmission path? We expect that if we adopt
the Linear Programming Interpretation that these inside wiring rules
would not apply to Internet-based distributors of video programming.
Commercial Loudness. As required by the CALM Act, the Commission's
rules require MVPDs to ensure that commercials are transmitted to
consumers at an appropriate loudness level in accordance with a
specified industry standard. Depending on the size of the MVPD and the
type of the commercial at issue (i.e., inserted by the MVPD or embedded
in the programing by a third-party), the Commission's rules may require
an MVPD to install equipment and associated software or perform spot
checks or both. Do these requirements need to be modified to apply to
Internet-based distributors of video programming that qualify as MVPDs,
and if so, how? If the requirements do need to be modified, are there
ways to make the rules less burdensome for Internet-based distributors
of video programming while meeting our statutory mandates?
MDU Access. The Commission's rules prohibit cable operators, common
carriers (or their affiliates) that provide video programming, and OVS
operators from enforcing or executing any provision in a contract that
grants to it the exclusive right to provide any video programming
service to a Multiple Dwelling Unit. The Commission has sought comment
on whether to extend this prohibition to other MVPDs. To the extent the
Commission were to do so, what impact, if any, would this prohibition
have on Internet-based distributors of video programming that qualify
as MVPDs? Is there any way a landlord could restrict a tenant's ability
to access certain content over the Internet to prevent a tenant from
accessing an Internet-based linear video service? Will we need to amend
our MDU access rules if we adopt the Linear Programming Interpretation,
and if so, how?
Other Regulatory Issues. We also seek comment on how other
regulations should account for Internet-based distributors of video
programming that qualify as MVPDs. For example, should we extend any
cable or satellite-specific regulations to MVPDs more generally? If so,
what would be our statutory basis for doing so?
Impact on Content Owners. As discussed in this section, our
interpretation of the definition of an MVPD may impact content owners
in their negotiations with broadcasters, cable networks, and MVPDs. We
seek comment on these issues below.
Broadcast Content. Section 111 of the Copyright Act provides
``cable systems'' (as defined by the Copyright Act) a statutory license
to retransmit copyrighted broadcast performances if the ``cable
system'' pays a statutory fee for those performances. Some content
creators and owners contend that the Commission, in interpreting the
definition of MVPD in the Communications Act, should be cognizant of
the interplay between Section 111 of the Copyright Act and the
Communications Act and even suggest that a Commission decision
interpreting the definition of MVPD to include Internet-based
distributors would conflict with copyright law. But the market and
legal landscape has changed significantly since content creators and
owners made those claims. Therefore, we ask commenters to update the
record with respect to how expanding the definition of MVPD in the
Communications Act to include some Internet-based distributors
interrelates with copyright law.
Cable-Affiliated Content. Through application of the program access
rules, Internet-based distributors that qualify as MVPDs will be
entitled to non-discriminatory access to cable-affiliated networks.
Generally speaking, a programmer licenses content from various content
creators, aggregates the content into a network, and then licenses the
network to MVPDs for distribution. Discovery claims, however, that
cable-affiliated networks cannot license all of the content displayed
on their networks for distribution on the Internet because they
frequently do not possess the right to authorize Internet distribution
of that content. Rather, Discovery argues that (i) content
[[Page 2088]]
creators frequently retain for themselves the rights to Internet
distribution in order to generate a separate revenue stream by
displaying the content on their own Web sites or by selling the content
to other video providers; and (ii) obtaining Internet distribution
rights is simply too expensive for some networks. What effect should
the Copyright Office's decisions have on our statutory and policy
analysis?
To what extent do cable-affiliated networks possess--or have the
ability to negotiate for--the right to authorize distribution of
content displayed on their network over the Internet? If we adopt the
Linear Video Interpretation, what impact does that have on existing
rights for content distribution? We note that some cable-affiliated
networks are made available over the Internet to authenticated MVPD
subscribers. Does this reflect that cable-affiliated programmers
possess the right to authorize distribution of content displayed on
their network over the Internet? Does the concern about lack of rights
to authorize Internet distribution of content apply only with respect
to content not owned by the network? To what extent do cable-affiliated
networks own the content displayed on their networks (or are affiliated
with the content creators or otherwise possesses all of the rights with
respect to distribution of that content)? To what extent is the content
displayed on cable-affiliated networks owned by entities unaffiliated
with the network?
Would or should the adoption of the proposed definition of an MVPD
have any effect on a cable-affiliated network that does not possess the
right to authorize Internet distribution of content displayed on its
network? In other words, would or should the network be required to
obtain such rights to comply with the program access rules if certain
Internet-based distributors qualify as MVPDs? We seek comment on how
the resolution of this question would impact content creators, cable-
affiliated programmers, and MVPDs, either traditional or Internet-
based. We also seek comment on our authority to require entities to
enter into contracts for these distribution rights.
Non-Broadcast, Non-Cable-Affiliated Content. If we were to require
cable-affiliated networks to obtain Internet distribution rights from
content creators to comply with the program access rules, what impact,
if any, would or should this have on non-cable-affiliated networks? For
example, Ovation claims that, if cable-affiliated networks are required
to obtain Internet distribution rights, ``marketplace pressures would
foreseeably require other networks to do the same.'' We seek comment on
this concern.
Regulatory Treatment of Cable Operators and DBS Providers that
Provide Linear Video Services via IP. It seems evident that merely
using IP to deliver cable service does not alter the classification of
a facility as a cable system or of an entity as a cable operator. That
is, to the extent an operator may provide video programming services
over its own facilities using IP delivery within its footprint it
remains subject to regulation as a cable operator. At the same time, we
understand that some cable operators and DBS providers are exploring
new business models that might be indistinguishable from other over-
the-top (``OTT'') services--that is, linear video services that travel
over the public Internet and that cable operators do not treat as
managed video services on any cable system. As mentioned above, cable
operators and DBS providers are obtaining rights for online
distribution of content, and some have launched or may soon launch
Internet-based video programming services. Below, we seek comment on
the regulatory treatment of national OTT video services that a cable
operator or DBS provider may provide nationally-as contrasted to the
traditional services it offers.
Cable Service Provided via IP Over the Operator's Facilities. The
Act defines a cable operator as, essentially, an entity that provides
cable service over a cable system. Thus, we must interpret the three
terms--cable service, cable system, and cable operator--together to
determine the proper regulatory treatment of IP-based services provided
by cable operators. The Act defines cable service as ``(A) the one-way
transmission to subscribers of (i) video programming, or (ii) other
programming service, and (B) subscriber interaction, if any, which is
required for the selection or use of such video programming or other
programming service.'' The Commission and other authorities have
previously concluded that the statute's definition of ``cable service''
includes linear IP video service.
Second, to the extent a cable operator uses ``a set of closed
transmission paths'' to provide cable service, as one providing IP
video programming over its copper wire (including coaxial cable) or
fiber optic cable does, its facility meets Section 602(7) of the Act's
definition of cable system: ``a facility, consisting of a set of closed
transmission paths and associated signal generation, reception, and
control equipment that is designed to provide cable service which
includes video programming and which is provided to multiple
subscribers within a community, but such term does not include (A) a
facility that serves only to retransmit the television signals of 1 or
more television broadcast stations; (B) a facility that serves
subscribers without using any public right-of-way; (C) a facility of a
common carrier which is subject, in whole or in part, to the provisions
of subchapter II of this chapter, except that such facility shall be
considered a cable system (other than for purposes of section 541(c) of
this title) to the extent such facility is used in the transmission of
video programming directly to subscribers, unless the extent of such
use is solely to provide interactive on-demand services; (D) an open
video system that complies with section 573 of this title; or (E) any
facilities of any electric utility used solely for operating its
electric utility system.''
Finally, an entity that delivers cable services via IP is a cable
operator to the extent it delivers those services as managed video
services over its own facilities and within its footprint. This is
compelled by the Act's definition of a cable operator as a ``person or
group of persons (A) who provides cable service over a cable system and
directly or through one or more affiliates owns a significant interest
in such cable system, or (B) who otherwise controls or is responsible
for, through any arrangement, the management and operation of such a
cable system.''
IP-based service provided by a cable operator over its facilities
and within its footprint must be regulated as a cable service not only
because it is compelled by the statutory definitions; it is also good
policy, as it ensures that cable operators will continue to be subject
to the pro-competitive, consumer-focused regulations that apply to
cable even if they provide their services via IP.
Congress and the Commission advanced several pro-competitive,
consumer-focused values when they adopted the cable-specific provisions
of the Act and the rules implementing these important provisions. The
Act and our rules include many cable-specific requirements, including
the following: Annual regulatory fees; Emergency Alert System (``EAS'')
requirements; the V-Chip; commercial limits in children's programs;
network non-duplication; syndicated program exclusivity; notice to
broadcasters regarding: (i) Deletion or repositioning of a broadcast
signal, (ii) a change in designation of principal headend, (iii) change
in technical configuration, (iv) the provision of service to 1,000
subscribers, thereby entitling broadcast stations to exercise non-
duplication protection or
[[Page 2089]]
syndicated exclusivity protection; political programming and candidate
access rules; sponsorship identification; lotteries; public inspection
file; public, educational, or governmental channels (``PEG''); program
access; leased access; various reporting requirements; cross-ownership
restrictions; prohibition on buy outs; national subscriber limits
(horizontal ownership restriction); limits on carriage of vertically
integrated programming; various franchising requirements; rate
regulation, including a requirement to offer a basic service tier, a
prohibition on negative option billing, an obligation to offer a tier
buy-through option, and requirements pertaining to information on
subscriber bills; regulation of services, facilities, and equipment,
including minimum technical standards and notification to customers of
changes in rates, programming services, or channel positions; consumer
protection and customer service; consumer electronics equipment
compatibility, including prohibition on scrambling or encrypting the
basic service tier; support for unidirectional digital cable products
(Plug and Play); protection of subscriber privacy; transmission of
obscene programming; and scrambling of cable channels for non-
subscribers.
In particular, these obligations on cable operators are critical
for noncommercial, local, and independent broadcasters. Sections 614
and 615 of the Communications Act and implementing rules adopted by the
Commission entitle commercial and noncommercial television broadcasters
to carriage on local cable television systems. When the Commission
proposed implementing regulations, it noted that Congress emphasized
strongly that the public interest demands that cable subscribers be
able to access their local commercial and noncommercial broadcast
stations. That congressional policy directive persists today; and the
continued application of these requirements to cable operators that
provide video programming over IP will ensure that local broadcasters
will be carried, and that other cable-centric regulations will apply,
regardless of the method that the cable operator uses to deliver the
cable service.
Cable Operators Offering OTT Services. We tentatively conclude that
video programming services that a cable operator may offer over the
Internet should not be regulated as cable services. Some cable
operators have announced plans to offer video programming services via
the Internet. If a cable operator delivers video programming service
over the Internet, rather than as a managed video service over its own
facilities, we tentatively conclude that this entity would be (i) a
cable operator with respect to its managed video service, and (ii) a
non-cable MVPD under our proposed Linear Programming Interpretation
with respect to its OTT service. To the extent a consumer located
within a cable operator's footprint may access the cable operator's OTT
service using that cable operator's broadband facilities for Internet
access, how should this arrangement be classified? We tentatively
conclude that such an OTT service, if provided to consumers without
regard to whether they subscribe to the cable operator's managed video
service, would be a non-cable MVPD service inside and outside of the
operator's footprint, even if it is accessible over that cable
operator's broadband facilities. We seek comment on whether there is
any reason that our tentative conclusion should change if a cable
operator provides an OTT service within its footprint only, rather than
nationally. Would our analysis change if the OTT service were bundled
with the cable service? Finally, we seek comment on the likely forms
that new OTT services will take, and on both the application of the
statutory definitions discussed above to such services and the policy
implications of classifying these services.
DBS Providers Offering OTT Services. Some DBS providers offer
linear OTT services (and have announced plans to expand those services)
via the Internet. To the extent that DBS providers offer video
programming services over the Internet, we tentatively conclude that
those services should not be regulated as DBS service, and therefore
should not be subject to the regulatory and statutory obligations and
privileges of such services. If we adopt our proposed Linear
Programming Interpretation, those services would be MVPD services
subject to the regulatory and statutory obligations and privileges of
such services. We reach this tentative conclusion because that service
does not use the providers' satellite facilities, but rather relies on
the Internet for delivery. We believe that this tentative conclusion is
consistent with the Act and our rules. We seek comment on this
tentative conclusion.
Authority. The Notice of Proposed Rulemaking is issued pursuant
to authority contained in sections 4(i), 4(j), 303(r), 325, 403,
616, 628, 629, 634 and 713 of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 303(r), 325, 403, 536, 548, 549,
554, and 613.
Ex Parte Rules. The proceeding initiated by the Notice of Proposed
Rulemaking shall be treated as ``permit-but-disclose'' proceedings in
accordance with the Commission's ex parte rules.\1\ Persons making ex
parte presentations must file a copy of any written presentation or a
memorandum summarizing any oral presentation within two business days
after the presentation (unless a different deadline applicable to the
Sunshine period applies). Persons making oral ex parte presentations
are reminded that memoranda summarizing the presentation must: (1) List
all persons attending or otherwise participating in the meeting at
which the ex parte presentation was made; and (2) summarize all data
presented and arguments made during the presentation. If the
presentation consisted in whole or in part of the presentation of data
or arguments already reflected in the presenter's written comments,
memoranda, or other filings in the proceeding, the presenter may
provide citations to such data or arguments in his or her prior
comments, memoranda, or other filings (specifying the relevant page
and/or paragraph numbers where such data or arguments can be found) in
lieu of summarizing them in the memorandum. Documents shown or given to
Commission staff during ex parte meetings are deemed to be written ex
parte presentations and must be filed consistent with rule 1.1206(b).
In proceedings governed by rule 1.49(f) or for which the Commission has
made available a method of electronic filing, written ex parte
presentations and memoranda summarizing oral ex parte presentations,
and all attachments thereto, must be filed through the electronic
comment filing system available for that proceeding, and must be filed
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf).
Participants in this proceeding should familiarize themselves with the
Commission's ex parte rules.
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\1\ 47 CFR 1.1200-1.1216.
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Filing Requirements. Pursuant to Sec. Sec. 1.415 and 1.419 of the
Commission's rules,\2\ interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using the Commission's Electronic
Comment Filing System (``ECFS''). Electronic Filers: Comments may be
filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/. Paper Filers: Parties who choose to file by
paper must file an original and one copy of each filing. If more than
one docket or
[[Page 2090]]
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the
Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes and boxes must be disposed of
before entering the building. Commercial overnight mail (other than
U.S. Postal Service Express Mail and Priority Mail) must be sent to
9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service
first-class, Express, and Priority mail must be addressed to 445 12th
Street SW., Washington, DC 20554.
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\2\ See id. Sec. Sec. 1.415, 1.419.
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Availability of Documents. Comments and reply comments will be
available for public inspection during regular business hours in the
FCC Reference Center, Federal Communications Commission, 445 12th
Street SW., CY-A257, Washington, DC 20554. These documents will also be
available via ECFS. Documents will be available electronically in
ASCII, Microsoft Word, and/or Adobe Acrobat.
People with Disabilities. To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an email to [email protected] or call the FCC's
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice),
(202) 418-0432 (TTY).
Regulatory Flexibility Analysis. As required by the Regulatory
Flexibility Act of 1980, see 5 U.S.C. 604, the Commission has prepared
an Initial Regulatory Flexibility Analysis (IRFA) of the possible
significant economic impact on small entities of the policies and rules
addressed in this document. The IRFA is set forth in Appendix B.
Written public comments are requested in the IRFA. These comments must
be filed in accordance with the same filing deadlines as comments filed
in response to this Notice of Proposed Rulemaking as set forth on the
first page of this document, and have a separate and distinct heading
designating them as responses to the IRFA.
Initial Paperwork Reduction Act Analysis. This Notice of Proposed
Rulemaking seeks comment on a potential new or revised information
collection requirement. If the Commission adopts any new or revised
information collection requirement, the Commission will publish a
separate notice in the Federal Register inviting the public to comment
on the requirement, as required by the Paperwork Reduction Act of 1995,
Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44
U.S.C. 3506(c)(4), the Commission seeks specific comment on how it
might ``further reduce the information collection burden for small
business concerns with fewer than 25 employees.''
III. Ordering Clauses
Accordingly, it is ordered, pursuant to the authority contained in
sections 4(i), 4(j), 303(r), 325, 403, 616, 628, 629, 634 and 713 of
the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j),
303(r), 325, 403, 536, 548, 549, 554, and 613, that the Notice of
Proposed Rulemaking is adopted.
It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, SHALL SEND a
copy of the Notice of Proposed Rulemaking including the Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects in 47 CFR Part 76
Administrative practice and procedure, Cable television, Equal
employment opportunity, Political candidates, Reporting and
recordkeeping requirements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
0
1. The authority citation for part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303,
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521,
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549,
552, 554, 556, 558, 560, 561, 571, 572, 573.
0
2. Section 76.5 is amended by revising paragraphs (rr) and (ss) to read
as follows:
Sec. 76.5 Definitions.
* * * * *
(rr) Linear Video. A stream of video programming that is
prescheduled by the programmer.
(ss) Multichannel Video Programming Distributor. 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. As used in this paragraph, channel means linear
video without regard to the means by which the programming is
distributed.
Sec. 76.64 [Amended].
0
3. Section 76.64 is amended by removing and reserving paragraph (d).
0
4. Section 76.71 is amended by revising paragraph (a) to read as
follows:
Sec. 76.71 Scope of application.
(a) The provisions of this subpart shall apply to any corporation,
partnership, association, joint-stock company, or trust engaged
primarily in the management or operation of any cable system. Cable
entities subject to these provisions include those systems defined in
Sec. 76.5(a), all satellite master antenna television systems serving
50 or more subscribers, and any multichannel video programming
distributor. Multichannel video programming distributors do not include
any entity which lacks control over the video programming distributed.
For purposes of this subpart, an entity has control over the video
programming it distributes, if it selects video programming channels or
programs and determines how they are presented for sale to consumers.
Notwithstanding the foregoing, the regulations in this subpart are not
applicable to the owners or originators (of programs or channels of
programming) that distribute six or fewer channels of commonly-owned
video programming over a leased transport facility. For purposes of
this subpart, programming services are ``commonly-owned'' if the same
entity holds a majority of the stock (or is a general partner) of each
program service.
* * * * *
Sec. 76.905 [Amended].
0
5. Section 76.905 is amended by removing and reserving paragraph (d).
0
6. Section 76.1000 is amended by revising paragraph (e) to read as
follows:
Sec. 76.1000 Definitions.
* * * * *
[[Page 2091]]
(e) Multichannel video programming distributor. The term
``multichannel video programming distributor'' means an entity that
falls under the definition provided in Sec. 76.5(rr) as well as buying
groups or agents of all such entities.
Note to paragraph (e): A video programming provider that
provides more than one channel of video programming on an open video
system is a multichannel video programming distributor for purposes
of this subpart O and Sec. 76.1507.
* * * * *
Sec. 76.1200 [Amended].
0
7. Section 76.1200 is amended by removing and reserving paragraph (b).
0
8. Section 76.1300 is amended by revising paragraph (d) to read as
follows:
Sec. 76.1300 Definitions.
* * * * *
(d) Multichannel video programming distributor. The term
``multichannel video programming distributor'' means an entity that
falls under the definition provided in Sec. 76.5(rr) as well as buying
groups or agents of all such entities.
* * * * *
[FR Doc. 2014-30777 Filed 1-14-15; 8:45 am]
BILLING CODE 6712-01-P