FilmOn, a streaming video site that had modeled its operations after Aereo’s, has notified the FCC that it intends to begin retransmitting local broadcast channels to authenticated subscribers, acting as a multichannel video programming distributor (MVPD).
When Aereo started up, the company argued it was essentially a network DVR company, and thus could provide its subscribers access to broadcast stations for free. FilmOn followed a similar tack, including adopting Aereo’s approach of using antenna arrays. Broadcasters disagreed with both, and sued Aereo. The case went to the Supreme Court, which in June ruled in favor of the broadcasters, stating Aereo was equivalent to an MVPD. Aereo and, eventually, FilmOn were compelled to suspend the delivery of broadcast stations. Aereo was knocked out entirely; FilmOn continues to stream other content.
The Supreme Court decision unintentionally highlighted a different legal question, however: can a streaming company qualify as an MVPD?
Aereo has since been trying to convince everyone other than the nine Supreme Court justices that it should be treated as an MVPD. Thus far it has failed.
But the can of worms the Supreme Court opened is still there, open, and both companies are pressing the issue. Earlier this month, Aereo announced it had filed a petition with the FCC, asking the FCC to clarify regulations about online MVPDs (sometimes referred to as online video distributors, or OVDs), so that Aereo can comply with them and resume operations as an MVPD.
FilmOn is going a half-step further by assuming it can qualify as an MVPD. In FilmOn’s notice to the FCC, it cited the Supreme Court decision in Broadcasting Cos. v. Aereo as all the authority it needs to be an MVPD. FilmOn informed the FCC that is has established headends to receive, record and stream local broadcast station video programming to consumers in dozens of designated market areas, and that it plans to follow all rules that apply to MVPDs when it starts retransmitting broadcast stations. It did not specify a date in the document.
“The Supreme Court determined such a service was similar to a cable system and had it existed in 1976, Congress would have made clear it intended to cover such service within the right of public performance,” FilmOn wrote.
The FCC has been saying that it intends a Notice of Proposed Rulemaking (NPRM) to establish a regulatory framework for online MVPDs.
This announcement was met with some measure of alarm by the American Cable Association, however, which has prior claim on the FCC’s attention on a similar issue.
More than 900 small cable operators together have the National Cable Television Cooperative (NCTC) negotiate for collective programming rights on their behalf. In general, “buying groups” are allowed by law, but because of the way “buying groups,” are defined, the NCTC does not qualify.
The ACA has been requesting a regulatory change that would allow the NCTC to qualify, and has been requesting the FCC address this longstanding issue before considering the new issue of OVDs.
Filed Under: Industry regulations