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U.S. FCC Chairman Proposes to Extend Video Programming Rights to Over-the-Top Video Providers

On October 28, 2014, the U.S. Federal Communications Commission (“FCC”) Chairman Tom Wheeler announced that he is proposing a Notice of Proposed Rulemaking (“NPRM”) to give over-the-top (“OTT”) video providers certain legacy negotiating and carriage rights with respect to cable programming (i.e. program access rights) and broadcast television programming (i.e. retransmission consent rights).  Chairman Wheeler explained that such regulations are necessary to ensure the availability of cable and broadcast television programming to OTT video providers.  By adopting these proposed regulations, the Chairman seeks to enhance consumer choice and competition in the U.S. video market. 

Entities providing OTT video programming or otherwise interested in the FCC’s proceeding should keep a close watch on the proceeding and evaluate the impact of the proposed rules on their businesses.

As reported, the NPRM would propose granting program access and retransmission consent rights to OTT providers of linear video programming (i.e. scheduled programs, like those carried on cable channels or aired by broadcast television stations).  Under the NPRM, OTT providers of non-linear video programming (i.e. non-scheduled or on-demand programs, like those offered by Amazon Prime or Netflix) would not have such rights.

Much of the details of the NPRM, however, are still unknown.  For instance, it is unclear whether OTT providers would be permitted to take advantage of these rights automatically or whether they would have to apply or otherwise opt in for such rights.  Similarly, it is unclear what regulatory obligations would apply to OTT video providers asserting these new rights under the proposed rules.  For example, would they be subject to legacy Equal Employment Opportunity requirements or the requirements regarding the competitive availability of cable navigation devices (e.g, set-top boxes)?  While some OTT video providers would welcome the opportunity to have these new rights, others may find the associated regulatory burdens problematic.

As an additional complication, providers seeking to take advantage of any new retransmission consent rights created by the FCC will need to be careful that they do not run afoul of U.S. copyright laws.  Only entities eligible for a “compulsory copyright license” may lawfully retransmit television broadcast signals, and the U.S. Copyright Office denied eligibility for one OTT video provider, Aereo, Inc., earlier this year.