Rockefeller Proposes to Even Playing Field for Online Video Distributors

Rockefeller’s act would prevent satellite, broadcast and other big media companies from anticompetitive practices against online video distributors, which would be protected in the way satellite providers were following the 1992 Cable Act. The online distributors would be given reasonable access to video programming and be able to more easily offer that choice, the bill proposes. Video programming carriage contracts would no longer be able to tilt the market against online video providers, with limits placed on such contracts’ use, according to bill descriptions. A press sheet described the bill as exploring ways for such online distributors to negotiate with broadcasters to carry their TV content. Online video distributors would also be protected from Internet service providers that might try to degrade the video services. The effect would be lower prices and more choices for consumers, Rockefeller’s office said in its press descriptions. The bill text wasn’t available at our deadline. Rockefeller has focused on these issues following an April Senate Commerce hearing on video marketplace issues.

NAB CEO Gordon Smith said broadcasters’ fears involve copyright. “We remain concerned about proposals that may legitimize theft of copyrighted programming,” Smith said in a statement. “Copyright theft poses a very real threat to the revenue stream that supports local television and the U.S. network-affiliate TV relationship that is the envy of the world.” The association “supports efforts to encourage the legal distribution of our highly-valued broadcast programming to on-line platforms” and plans to work with Rockefeller, Smith said.

Committee ranking member John Thune, R-S.D., was still learning details of the proposal as of Tuesday afternoon, his spokeswoman said. Rockefeller won’t likely have trouble finding Democrats to support the bill if he wants to -- but he may be more interested in starting discussion than anything else, said a communications industry lobbyist. The question of how providers of over-the-top service compare with multichannel video programming distributors has been a long-running industry concern, and this bill promises to be a major step forward, the lobbyist said. It would be no surprise if Rockefeller held a hearing on the bill, the lobbyist said.

The American Cable Association shares Rockefeller’s “concerns, as reflected in his bill, about the ease with which certain existing players in the market can use their market power to harm consumers and impede competition,” President Matthew Polka said in a statement, lauding the legislation. “This is a significant concern for small cable operators and reflects the need to consider a new approach.”

Aereo also expressed support for the initial ideas in Rockefeller’s news release. “We've longed believed that consumers deserve more choice and control when it comes to how they watch television,” CEO Chet Kanojia said in a statement. “Efforts to increase choice, competition and transparency for the consumer are a welcome step in the right direction.” Rockefeller aides emphasized the bill doesn’t address the legality of services currently being litigated, during a Tuesday media call. But a company such as Aereo, if found legal in the Supreme Court battle underway, would not necessarily be subject to retransmission consent negotiations, under the bill’s provisions, they said. Evidence suggests incumbent companies in the media and broadband spheres are hurting online video competition, a Rockefeller fact sheet said, saying the bill would prevent those companies from perpetuating the status quo.

Longer-term ramifications of the bill may influence net neutrality questions, said a communications lobbyist. The Consumer Choice in Online Video Act targets consumers directly and includes a truth-in-billing provision regarding broadband service, in which consumers would have to receive straightforward, comprehensible terms and conditions on the Internet service. The FCC would monitor broadband billing practices to make sure they are used fairly, the bill said. The bill could create additional rules of the road for broadband providers and also raise key questions about usage-based billing, said the lobbyist.

The bill dropped during a contentious time in the media market, amid questions of retransmission consent as well as the Satellite Television Extension and Localism Act, which needs to be reauthorized by the end of 2014. Members of Congress have debated whether to pass a “clean” reauthorization of STELA or whether to add in provisions amending U.S. video rules. Sen. John McCain, R-Ariz., introduced S-912, proposing a la carte cable choices for consumers, in May, but that bill hasn’t advanced.

"My legislation aims to enable the ultimate a la carte -- to give consumers the ability to watch the programming they want to watch, when they want to watch it, how they want to watch it, and pay only for what they actually watch,” Rockefeller said in a statement. “Consumers must be able to benefit from online video’s promise of decreased costs, increased choice, and higher-quality video content. And I strongly believe that my legislation will help foster a consumer-centric revolution in the video marketplace.” Rockefeller, who plans to retire next year, lamented the oft-heard remark that there are 500 channels with nothing worth watching.

Free Press backed the bill and cited its own similar recommendations in the past. The bill “will move us toward lower prices for the content we want to watch, when and where we want to watch it,” Policy Director Matt Wood said. “Video offerings will continue to grow, but only if our laws shield that evolution from cable companies that would rather keep their customers hooked on expensive and confusing service bundles.” Wood is glad the bill reaffirms the FCC’s role, he said.

NCTA released a statement pointing to the growing number of online video offerings from Netflix, Hulu and others. “In a world marked by such dynamism and robust competition, prudent policy dictates the removal of regulatory obstacles for all instead of creating marketplace disparities that would ‘cherry pick’ rights and obligations for some,” it said.