Last Week in Tech Policy #44: Streaming Killed the Video Star

(by Andrew Manley, Colorado Law 2L)

Recently, more and more Americans are intent on “cutting the cord”—dropping traditional cable and satellite TV services for internet-based streaming services. The growing availability of internet streaming services that provide linear streams of content is making cutting the cord more accessible and more affordable. Services like Sony’s Playstation Vue and Dish Network’s Sling TV offer subscribers streaming video service over the internet that resembles cable service in many ways, and even provide local content streams in certain markets. AT&T and DirecTV have a similar service in the works. However, these services do not fit neatly into the FCC’s regulatory regime for Multichannel Video Programming Distributors (MVPDs). Three specific cases have exposed the gaps in regulatory coverage for internet protocol based linear video services: Sky Angel, ivi, and Aereo.

Sky Angel

Sky Angel was a service that provided real time linear TV programming streams over a customer’s broadband internet connection. Sky Angel entered into an affiliation agreement with Discovery Network in 2007, and for roughly two and half years carried multiple streams of Discovery Network content. In 2010, the Discovery Network notified Sky Angel of its intent to terminate the agreement. In response, Sky Angel sought injunctive relief through a program access complaint with the Federal Communications Commission’s Media Bureau.

The Commission initially denied Sky Angel’s request for injunctive relief. Its reasoning was that in order to be entitled to the program access rules, an entity must be a Multichannel Video Programming Distributor. At the time of this case, the definition of MVPD required some form of transmission path be provided by the entity. As Sky Angel did not provide such a path, Sky Angel could not be considered an MVPD, and thus could not be granted injunctive relief.

ivi

ivi was a downloadable application that allowed users to stream live feeds of broadcast TV networks. Streams were of broadcast channels originally in Seattle and New York. These streams grew to include stations in other municipalities, such as Chicago.

WPIX and other stations brought suit alleging that ivi was infringing their copyrights. In defense, ivi claimed did not need license because they had a compulsory license under Section 111 of the Copyright Act, which grants a statutory license for retransmission of broadcast content to entities that meet certain requirements. These requirements include a form of transmission path, such as cables or microwaves. Applying the Chevron two step test, the court determined based on the language of the statute, the legislative history, and legislative intent that Congress was not silent on the issue, and that internet based services were not entitled to compulsory licenses. Going further and applying the second step of the Chevron test, the Court also noted that the Copyright Office had repeatedly held that internet transmissions are not entitled to compulsory licenses.

Aereo

Aereo was a service that streamed broadcast channels to subscribers. Subscribers would activate a single (allegedly) dedicated antenna and stream broadcast content from that antenna over the Internet. ABC, among others, filed suit, alleging that Aereo’s service was a public performance of copyrighted content. Under the Copyright Act, to perform is “to recite, render, play, dance, or act [a work], either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible” and to perform publicly as “to transmit . . . a performance or display of the work to a place . . . or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”

In a 6-3 opinion, the Supreme Court sided with ABC. Aereo’s service was considered a public performance because it resembled the cable company practices of retransmitting broadcast signals that 1976 amendments to the Copyright Act addressed. The court assumed for sake of argument that each transmission is a new performance. Because the statute applies to any device or process used for transmission, and the public is interpreted to mean any group of people, not just family/friends, the court found Aereo’s performance to be public.

The FCC Intervenes

The Federal Communications Commission began to address the broader issue of IP streaming after the Sky Angel case. In March 2012, the Commission released a Public Notice seeking comment on how it should define both “channel” and “multichannel video programming distributor.” The public notice was particularly concerned with the regulatory impacts of possible interpretations of the term, and whether or not the interpretations were consistent with the text of the statute.

The regulatory impacts act stake in redefinition include a number of obligations and burdens imposed on MVPDs, as well as regulatory benefits. This includes not only the program access rules Sky Angel sought relief under, but certain accessibility requirements, carriage requirements, and participation in the Emergency Alert System.

The Commission issued a Notice of Proposed Rulemaking in December 2014. The purpose of the NPRM, the Commission stated, was to adopt a modernized, technology-neutral interpretation of “MVPD.” While the NPRM sought comment on a number of different aspects, it primarily focused on two interpretations of “Channels of Video Programming”:

  • The Commission’s preferred interpretation of “channels of video programming” to mean prescheduled streams of video programming without regard for whether the same entity is providing a transmission path; and
  • An alternative definition based on the statutory definition of “channel” that would require a physical transmission path.

The Commission expressed preference for the first interpretation because it believed it a reasonable interpretation of Congressional intent that best aligned with consumer expectations and was consistent with the colloquial meaning of the word “channel.”

Multiple commenters have expressed a belief that the Commission should adopt rules that would allow for internet video providers to opt in to MVPD classification (for example, see See Verizon Reply Comments, Wireless Internet Service Providers Association Comments, Electronic Frontier Foundation Comments, Supercloud Comments, and Digital Media Association Comments). This interpretation, commenters argued, would allow for internet based services dependent on the privileges that come with MVPD classification to take advantage of those privileges, while at the same time not burdening OVDs that do not depend on MVPD privileges.

Despite current activism on this issue, the FCC has not acted. What problems do you foresee arising as people watch more and more TV through online streaming services as opposed to traditional cable and over the air? Do you think the Commission’s proposed interpretation is the best solution? What about the interpretation proposed by those commenting?