NAB 2015: Should the FCC Regulate OTT Video Providers Like MVPDs?
In December 2014, the FCC proposed changing the definition of multichannel video programming distributor (MVPD) to include some over-the-top (OTT) services, a move that will impact the future of online video whatever the outcome. This afternoon at the NAB conference, a panel moderated by FCC commissioner Ajit Pai met to debate that proposal.
"Online video is the new royalty," enthused Pai, pointing out that 78 percent of all U.S. adults now use the internet to watch or download videos, and Netflix counts for 35 percent of all peak-hour downstream content. "The variety of internet programming is astonishing," he said.
Looking at the diversity of today's online video offerings—which include programmers creating online services, Netflix offering a la carte options, and Meerkat opening new doors—he noted that the internet is redefining video. The trend that matters most to the FCC, however, is that more distributors are creating channel bundles as an alternative to cable or satellite services.
"The bottom line is that all of this is great to American consumers," Pai said. People are enjoying more content options than ever, and can watch video on any screen. "There simply isn't enough time to keep up with all the options," he noted.
In that environment, what is the role of the FCC?, Pai asked. Should this vibrant marketplace be allowed to flourish without regulation, or has OTT become too important for the FCC to ignore? The FCC's December proposal brought forth strong and varied feedback, he said, with some believing that regulations would promote diversity and benefit broadcasters, and others saying that regulations would limit choice and place too large a burden on publishers. Amazon was especially strong in its criticism, saying the FCC is trying to graft an old distribution model on a new platform.
"The internet is reshaping the video marketplace in ways we're only beginning to see," Pai said.
While Pai didn't voice an opinion, the panelists did. Amy Tenbrink, senior vice president of business affairs for Univision, said she struggled to see a problem that needs fixing, and thought the FCC was trying to regulate something when it didn't know what it was or would become. Rick Chessen, senior vice president of law and regulatory policy for the National Cable and Telecommunications Association, said the FCC doesn't have the authority to change the classification, and added that this is bad policy for an evolving marketplace.
On the affirmative side, Jennifer Johnson, a partner with Covington and Burling LLP, said the reclassification would help local content find a place online and would ensure even treatment. Kyle Borg, the co-founder and president of BiggyTV, said that regulation would help the video industry avoid the fate of the music industry.
FCC commissioner Ajit Pai
Net neutrality was not on the agenda, as Pai expressed a zeal for clearing out regulations and getting the government out of the way of business.
A longtime voice of dissent at the FCC, Pai is expected to reduce media regulations and open the door for more big media mergers.
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