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If Video Sites Could Act Like Cable Companies
Most consumers have no idea what an M.V.P.D. is, but they mail a check to one every month. What they call Comcast or Time Warner Cable or DirecTV, the government calls a “multichannel video programming distributor,” or M.V.P.D. for short.
When that mouthful of a phrase was coined decades ago, it was pretty easy to identify what was a multichannel distributor — any cable or satellite company — and just as important, what wasn’t. But the Internet is changing that — so profoundly, in fact, that the Federal Communications Commission is now rethinking even the definition of the word “channel.”
In a public comment period that ends in the coming weeks, the commission is asking whether the rules of multichannel distributors — like the right to carry certain popular channels and the responsibility to carry some less popular ones — should apply to new online distributors like Hulu and YouTube. If it decides that they should, then more companies could stream TV shows to computers and smartphones, hastening an industrywide shift to the Internet.
“We recognize it’s going to have very, very broad implications,” said Austin Schlick, the F.C.C. general counsel, at a cable industry conference here on Tuesday.
Many companies are urging the F.C.C. to move carefully, citing the pace of change in the media industry. The Internet has already changed what it means to publish, mail and copy — dictionaries certainly haven’t been able to keep up.
“We’re barely into the second inning of how video distribution will ultimately work,” said Will Richmond, the editor of VideoNuze, an online publication that covers the industry. “Broadband delivery is leveling the playing field for new, deep-pocketed, over-the-top entrants to disrupt the traditional pay-TV model.”
Going “over the top” means atop the Internet infrastructure provided by companies like Comcast. “Somebody’s going to come over the top” and sell a package of cable channels via the Internet at some point, David M. Zaslav, the chief executive of Discovery Communications, predicted at the conference on Monday. He did not name any names, but Apple, Google, Sony and Intel, among others, have all at least considered such an offering.
Those companies could theoretically give consumers new ways to buy bundles of programming, breaking open the cable model — though an incumbent cable or telecommunications company would most likely still need to provide Internet access.
A change to the definition of multichannel distributor could make it easier for the companies to acquire programming, analysts say — which may explain why the incumbents have opposed any such change.
This notion was tested a few years ago when a Christian media company called Sky Angel tried to add Mr. Zaslav’s Discovery Channel to the lineup of family-friendly channels that it sells over the Internet. Discovery did not want to sell, but if Sky Angel were legally deemed a multichannel distributor, it would have had to, under current rules.
The F.C.C. staff initially sided with Discovery, but Sky Angel persisted and this spring, the commission decided to ask for input. That is when the panel asked for input: in this day and age, how should we be defining “M.V.P.D.” and “channel,” anyway?
Suddenly, television executives and public interest lobbyists were doubling as lexicographers. “If the F.C.C. comes out the right way on this, it would make it possible for online services like Sky Angel to easily carry popular cable channels and broadcast TV,” said John Bergmayer, a staff lawyer for the public interest group Public Knowledge. “Video distribution could become much more diverse — Sky Angel is a Christian service, after all, and there’s no reason different groups shouldn’t be able to buy TV services tailored to their needs.”
Mr. Bergmayer said Public Knowledge wanted the F.C.C. policies to enable more competition and “demonstrate that new entrants are welcome to try to reach viewers.”
Major distributors like Comcast and Time Warner Cable want the definition of M.V.P.D. to remain rather narrow, to include only those who provide the transmission path for programming, like themselves.
Some broadcasters, however, want the definition to be broadened to include online video sites, because then the sites would be subject to the same rules as cable operators, called retransmission consent, and would have to pay fees for their station signals. A number of online TV start-ups, including the Barry Diller-backed Aereo, are trying to sidestep these rules.
Jack Perry of Syncbak, which helps stations simulcast their signals on the Web, said his company would be able to grow more rapidly if the F.C.C. adopted a “21st-century definition of M.V.P.D.’s.”
“The impact could be huge,” he said. Still other stakeholders, including trade groups that represent giants like Google, Microsoft, Amazon and Netflix, have said that the F.C.C. should take more time before deciding.
In one of many such letters to the F.C.C., the Motion Picture Association of America cautioned that “even small changes to video programming regulations can have a far-reaching impact.”
All this over a four-letter abbreviation — proof that every step toward online TV will be done with care.