[opendtv] Re: MVPD Definition

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Sat, 22 Aug 2015 12:24:41 -0400

On Aug 21, 2015, at 7:50 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:

The FCC seems perfectly capable of eliminating one archaic rule, the
exclusivity rule. Their attempt to re-create the walled garden MVPD model,
over the Internet that they recently mandated to be neutral, seems totally
illogical. I wonder why this is taking so long to get across?

The Syndex and network non duplication rule changes that Wheeler is proposing
are not a done deal yet. Proposals to rescind these rules have failed multiple
times over the past decade. We have not even seen a NPRM yet, so don't count
your chickens...yet.

Walled garden business models exist all over the Internet Bert. Network
neutrality rules do not address business models, they just assure that an ISP
cannot block or disadvantage a service. In the context of MVPD services this
means that a cable ISP cannot disadvantage a Virtual MVPD using their broadband
pipes.

Internet MVPD services already exist, so it is absurd to say that the FCC is
trying to create them. The NPRM we are discussing "could" extend the Program
Access rules authorized by Congress in the 1992 Cable Act to Virtual MVPDs (or
whatever the FCC decides to call them).

And in the context of Network Non Duplication, the FCC could require Virtual
MVPDs to provide local broadcast signals if they offer any broadcast networks.
I strongly suspect that Dish is waiting to see the actual rules that the FCC
will issue resulting from this NPRM; they still do not offer the broadcast
networks in an add on bundle that they have been promising. It has been
reported that Apple is negotiating for the rights to offer local broadcast
signals, but they too could be waiting for the FCC to act.

As for the reason it is hard for you to get your point across, the answer is
obvious.

There is NO reason that MVPD services cannot be offered via the Internet.

On one hand you tell us they are not needed, on the other you tell us that the
cable MSOs should be able to compete nationally via the Internet, outside their
licenses footprints. These licenses include local franchise agreements AND the
contracts they have with content owners to serve their geographic markets.

Different environments require different rules. MVPD rules becomes
irrelevant, when broadcasters/congloms are free to use the Internet,
available to everyone, mandated to be neutral.

What makes these rules irrelevant Bert?

The FCC has no authority to nullify local franchise agreements or contracts
between the content owners and MVPDs. They do have the authority to extend the
Program Access Rules to Virtual MVPDs and to require Virtual MVPDs to deliver
local broadcast signals to subscribers in that market, IF they offer broadcast
signals at all.

Whether they will exercise that authority remains to be seen.

MVPD rules make sense when the distribution service is a local monopoly,
meaning one single bottleneck that can control what the citizens in that
location have access to. Not the case with the Internet.

So why did Congress require the FCC to create the Program Access Rules in the
1992 Cable Act?

If they wanted to maintain local monopolies, why would they tell the FCC to
create rules to assure that competitors could access the same programming.

The Program Access Rules allowed cable and Fios overbuilds and national DBS
services to compete in the markets for MVPD services, and they worked!

At the end of 2014 the MVPD market share for your local cable monopolies was
just below 52%.

Cable - 49.28 million subscribers
DBS - 34.33 million subscribers
Telcos - 11.59 million subscribers

Your bottle(neck) appears to be broken.

And once again, this angst about "linear streams" is totally misplaced.

You are the only person I have seen in this forum with angst about linear
streams.

They are the most important content the MVPDs offer, and the content owners are
showing no indication they want to abandon the MVPD business model. Where we
are seeing a huge shift is in the ways a consumer can watch pre-produced
library content, including shows that aired recently on the linear networks.

The content sources can provide whatever linear or non-linear streams they
want, over the now-neutral Internet.

Correct, although net neutrality has nothing to do with this. This is just an
extension of the business they have always been in - syndicating their content
libraries.

OTT sites can elect to be only one content owner's site, or aggregation
sites. No one needs to force any single model on anyone anymore, because
technology has removed those old limitations. So your second bullet offers
nothing new, and any mention of "linear" is pointless.

The mention of linear IS THE POINT. This is what the FCC has authority to
regulate through application of the Program Access Rules. By means of
comparison the FCC has no authority to regulate licensing deals between the
content owner and Netflix or Amazon, or Comcast for that matter.

Clearly the Internet can support a range of business models. Apple has been
selling movies and TV shows over the Internet for a decade. Netflix offers
older movies and a huge library of TV shows for a fee, without commercials.
Hulu and Hulu Plus are free and subscription services respectively, with
commercials. Sling offers a slimmed down bundle of linear streams and TVE
access to VOD content.

You could argue that the marketplace is sorting all of this out, and I would
agree. But that is not going to stop the FCC from sticking its nose where they
can legally - that's what bureaucrats do.

That's hardly a "dilemma." It's instead the whole point. MVPD rules may even
soldier on, for luddites who insist on using these proprietary pipes. But
it's patently obvious that the rules are not relevant to a medium mandated to
be neutral. Other rules might apply, but these would be to guarantee
neutrality of the pipe. Not what the owners of content MUST allow the pipe to
carry.

They are just as applicable over the Internet as they are for cable, Fios or
DBS.

Just ask Sony, which has failed to cut a deal with ESPN for the Play Station
Vue service. Or ask Dish why they cannot secure a deal with The Fox News
Channel for the Sling service. Or why it is taking Apple so long to license the
content they want for their OTT service.

And yes, if the FCC extends the Program Access Rules to the Internet, it WOULD
require the content owners to license their linear networks on a non
discriminatory basis.

No matter what, you need a spectrum manager.

Perhaps. Those who are advocating to sunset the FCC believe the court system
can adequately deal with interference issues, and the Congress manages the
spectrum allocations, not the FCC - Congress decided to take spectrum from the
broadcasters in 1995 and authorized the spectrum auction next year.

"Fight it out" is nonsensical. Just like you need traffic laws, for the road
network to be usable, you need the spectrum to be allocated for different
services and locations, to prevent interference. So, this is a whole
different discussion.

When I said fight it out, I meant the kind of competition you advocate for
Bert. Let Comcast or Cox create a national MVPD service. Let everyone negotiate
exclusive deals for content.

There is nothing in any of this, or in the verbiage of the 1934 or other
ancient laws, that implies anything unique about "linear streams." It's
simply the misinterpretation of technical realities, by one trade scribe,
Craig, and some FCC lawyers. I'm confident that this apparent fascination
with "linear" will soon be obsoleted by events.

I am confidant you are wrong.

Regards
Craig.



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