Leave Online Video Distributors Unregulated, Say Comcast, NCTA
The FCC should reject calls to regulate the “thriving” online video distribution marketplace and leave online video distributors (OVDs) free from rules, Comcast said. The marketplace is working fine but its existence doesn’t give “the Commission any authority to apply, or indeed any factual support for applying, outdated regulations to either OVDs themselves or to MVPDs that interact with OVDs” it said. Public Knowledge and DirecTV have both raised the issue in comments with the agency.
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The FCC should reject calls by Public Knowledge to expand to OVDs many of the rights enjoyed by traditional multichannel video programming distributors (MVPDs), Comcast said. Public Knowledge had sought a declaratory ruling saying pay-TV operators must work fairly with OVDs. “Although facially such a regulation would seem to be relatively innocuous, the similar language in Section 628(b) of the Communications Act has been interpreted broadly and in unpredictable ways,” it said. And it is “questionable, at best” for the FCC to draw its authority for regulating online video from the 1992 Cable Act, a law adopted at a time when the platform of online video had yet to be conceived, Comcast said.
"Protectionist” rules aren’t needed to help online video distributors, NCTA said in its comments. Though Netflix said in its initial comments that MVPDs that are also ISPs have both the means and motive for discriminating against OVDs, it provided no evidence that “any such conduct has had or would have” the result of curbing the growth of OVDs, NCTA said. “Indeed, it’s the regulatory constraints suggested by Netflix that would unfairly hamper competition by artificially preventing cable operators from marketing their services in ways that are most fair, efficient and valuable to their customers,” NCTA said.
The FCC should also be careful not to apply language and classifications to online video that could have “unwarranted regulatory consequences,” NCTA said. For one, the FCC shouldn’t “simply borrow the distinct classification of Online Video Distributors ("OVDs") that it adopted in the Comcast-NBCUniversal transaction proceeding,” NCTA said. There, the agency was looking at a specific set of facts and a single transaction, it said. “If the Commission does attempt to define a category of OVDs in its report to Congress, it should do so in a manner that does not encompass all websites with video content,” NCTA said.
The growth in online video means local governments need more oversight over Internet services, said Montgomery County, Md., in its reply comments. The FCC should let local franchising authorities address Internet service issues just as they oversee cable service complaints, “It would be entirely logical to allow local governments to handle Internet customer, a.k.a. OVD subscriber matters,” the county said. “After all, residents live in the local jurisdiction, the two services are provided by the same provider over the same plant, and Internet service is often bundled with cable service,” it said. The complaints the Montgomery Office of Cable and Communications Services gets each year are skewing increasingly toward complaints related to Internet service, it said.
Innovations in online video by traditional pay-TV operators aren’t reasons for the FCC to ditch its AllVid plans, the AllVid Alliance said. “Examples of multichannel programming being made available through ‘apps’ or new devices continue to primarily rely on walled garden, proprietary implementations,” it said. “Ad hoc enabling of access to some multichannel content on some devices masks the competitive potential of assuring access to all multichannel content on all devices,” it said.
The suggestion that the increased competition in the MPVD market has left the Cable Act antiquated ignores FCC findings to the contrary, said DirecTV. While competition has increased in particular markets and submarkets, “cable operators still wield enormous and increasing market power in other markets,” including high-speed broadband and cable-affiliated programming. The DBS company said there will likely be more to say about those issues as the FCC considers the program access exclusivity provision. The City of New York said: “The wireline MVPD market is unlikely to be fully competitive for the foreseeable future. The competition offered by the entrance of large telephone companies … is still in its infancy.” And DBS offerings are constrained in competing with wireline operators’ full bundle of services, it said. “It is the City’s experience that the Title VI framework has enhanced and will continue to enhance the deployment effectiveness and competitiveness” of wireline pay-TV services, it said.