“I am asking the Commission to start a rule-making proceeding in which we would modernize our interpretation of the term 'multichannel video programming distributor' (MVPD) so that it is technology-neutral,” FCC Chairman Tom Wheeler said in a blog post. “The result of this technical adjustment will be to give MVPDs that use the Internet (or any other method of transmission) the same access to programming owned by cable operators and the same ability to negotiate to carry broadcast TV stations that Congress gave to satellite systems in order to ensure competitive video markets.”
Wheeler's move comes after Aereo asked the FCC to redefine the term multichannel video programming distributor to include online-only companies. With that change, Aereo -- as well as competitors like FilmOn -- would be in a better position to obtain licenses.
Aereo suspended its two-year-old service this summer, days after the Supreme Court ruled that Aereo's real-time streams of over-the-air television infringed copyright. Until that ruling came out, Aereo argued that it didn't need a license to stream over-the-air programs to consumers' smartphones and tablets.
The company originally argued that its technology -- which drew on antennas to capture and stream television shows -- merely allowed consumers to time-shift and device-shift.
But after the Supreme Court rejected Aereo's arguments on the ground that it resembled a cable system -- which needs a license to publicly perform TV shows -- the startup changed its strategy. Aereo now says that if it's going to be treated as a cable system for purposes of copyright law, it should be granted the same rights as cable systems.
As part of its new approach, the company recently asked a federal judge to rule that it's entitled to a cable license, and also applied to the U.S. Copyright Office for one.
So far, Aereo has struck out on both counts.
Last week, U.S. District Court Judge Alison Nathan rejected Aereo's argument that it qualifies for a cable license. And in July, the Copyright Office refused to process the company's application.
But neither decision is necessarily permanent. In fact, Copyright Office general counsel Jacqueline Charlesworth told Aereo in July that “further regulatory” developments could spur officials to “take definitive action” on Aereo's application for a cable license. And Nathan's decision remains subject to change -- both by herself at a later date, and by an appellate court.
Not surprisingly, Aereo CEO and founder Chet Kanojia cheered Wheeler's move. “The way people consume television is rapidly changing and our laws and regulations have not kept pace. By clarifying these rules, the FCC is taking a real and meaningful step forward for competition in the video market,” he said in a statement.
The Writers Guild of America, West, also said it approved. “A technology-neutral definition of an MVPD is long overdue and will enhance consumer choice,” the organization said in a statement. “With the largest MVPDs attempting to consolidate their control of content distribution through mergers, this game-changing proposal to allow new competitors is absolutely necessary.”
For its part, the National Association of Broadcasters said it “welcomes video distribution platforms that legally deliver local TV content to consumers when and where they want it.” The group adds that it will work with the FCC to make sure “this new competition enhances rather than undermines localism.”