PEG, Communities Fighting OTT-as-MVPD Provision on Fee, Carriage Concerns
Public, educational and government channels and local communities are lining up in opposition to one aspect of the FCC proposal to broaden the definition of multichannel video programing distributors to include certain types of over-the-top providers. If what the NPRM proposes becomes a rule, PEG channels and allies said they fear that cable operators' OTT services won't need to carry the programming or pay franchise and/or PEG fees that fund the channels. "In these proceedings, you sometimes get the law of unintended consequences," Merlyn Reineke, CEO of Montgomery Community Media in Rockville, Maryland, told us. "That’s our fear on the PEG side."
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"OTT video service offered by cable operators is a cable service and should be regulated as a cable service," said Murfreesboro, Tennessee, Mayor Shane McFarland in a filing posted Thursday in docket 14-261. The FCC's tentative conclusion that cable operators' OTT video services shouldn't be regulated as a cable service takes away their "important public interest obligations merely by opting to use alternative technology to deliver the same video programming, McFarland said. That "puts the commission in the position of creating incentives to undercut franchise obligations for no public or consumer purpose," he said.
Others have made similar arguments recently. Hawaii's Maui County Community Television, California's Access Monterey Peninsula and many others said an NPRM provision would let cable operators shed certain public interest obligations -- such as carriage of PEG channels and paying local franchise and PEG fees -- when operating any OTT services. "The public interest bargain has been: Use of the right of way and in return fair compensation with localities and channel set-aside and capacity so that local information needs can be met," Alliance for Community Media President Mike Wassenaar told us. "Our concern is that public interest bargain will be dissolved in the future."
The NPRM said a cable operator delivering video over the Internet would be a cable operator "with respect to its managed video service" but a non-cable MVPD "with respect to its OTT service." That would hold true for any DBS service, the FCC said, that any linear OTT services they offer shouldn't be regulated as a DBS service. "I don’t think they necessarily thought through how those public interest obligations could be affected," Wassenaar said. "There's enough complexity to the NPRM in the first place, we understand that. But distribution of local channels needs to be contemplated." While Comcast's Stream apparently voluntarily carries PEG channels, he said, "for our industry it's not in the public interest for us to rely on the kindness of corporations." The Media Bureau declined to comment.
ACM has been urging members to advocate for the FCC to reject that portion of the NPRM, Wassenaar said. "We agree with a lot of the spirit of the NPRM. We like competition," he said. "We want competition. We don’t want localism to disappear." Backing PEG are such organizations as NATOA (see 1509090017). That section of the proposed rule has the backing of organizations ranging from NCTA -- even as it opposes the stretching of the MVPD definition generally to include OTT (see 1508030057) -- to Verizon (see 1507140011).
FCC action on the NPRM still could come this year, though no draft order has been circulated, said a communications lawyer familiar with the issue.