Amazon’s On-Demand MVPD

At a congressional oversight hearing last month, FCC chairman Tom Wheeler indicated that his earlier proposal to classify certain over-the-top video services as “multichannel video programming distributors” (MVPDs), a regulatory term of art that applies to cable and satellite providers, was on more or less indefinite hold.

“The purpose of rulemaking is to learn,” Wheeler told the committee. “We learned that [a] vast number of things are developing very rapidly, and we have not moved forward on that notice of proposed rulemaking and don’t see, until situations change, we would.”

Among those “vast number of things,” no doubt, were Amazon’s confidential plans to bundle third-party OTT services in with Amazon Prime, monitor_globeallowing Prime Instant Video users to put together a package of OTT channels through a single subscription. As first reported by BloombergBusiness, Amazon Prime customers “will have the option of adding other online subscriptions to their accounts, including major, well-known movie and TV channels, and Amazon will also sell prepackaged bundles of its own creation…[T]he new feature may go live as soon as next month.”

The offering would “resemble something between a cable-TV subscription, though without live programming, and the online array of video offered through devices from Roku Inc., Apple TV or Amazon’s own Fire TV,” according to Bloomberg. Read More »

FCC Hitting Pause On Pay-TV Overhaul?

For much of the past year, the Federal Communications Commission has been conducting a pair of proceedings that together, depending on their outcomes, could go a long way toward remaking the pay-TV business as we’ve known it. But at an oversight hearing before the House Energy and Commerce Committee yesterday, FCC chairman Tom Wheeler seemed to turn down the heat under both of them.

Receiving the most attention at the hearing was the recently completed report by the Downloadable Security Technical Advisory Committee Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearing(DSTAC), in particular a controversial proposal in it to require pay-TV operators to disaggregate their services into discreet components that would allow third-party set-top box makers to design their own user interfaces that could leverage elements of pay-TV services to create new user experiences (see our previous discussions of the debate here, here and here).

Republican members of the committee were sharply critical of the proposal and accused the FCC of exceeding Congress’s mandate for DSTAC in allowing the committee to consider non-security elements of pay-TV interoperability. Some members all but endorsed a competing proposal, put forth by pay-TV service providers, to adopt an app-based approach to interoperability under which service providers would, in effect, virtualize their existing STBs, complete with proprietary UIs, into apps that could be downloaded and run on third-party devices. Read More »

The Wrong Debate Over Set-Top Boxes

Today (Nov. 9th) was the last day for filing comments with the Federal Communications Commission regarding the final report of the Downloadable Security Technical Advisory Committee (DSTAC) and folks in the pay-TV industry were clearly getting nervous that the FCC might finally, really do something this time to “tear up the set-top box.”

Last week, eight of the largest pay-TV providers, along with the National Cable & Telecommunications Association, the Motion Picture Association Push_button_cable_boxof America, and several equipment manufacturers together sent a phalanx of lawyers and lobbyists to FCC headquarters, ex parte, in a desperate bid to head off any movement by the agency toward a rulemaking that would require pay-TV providers to disaggregate their services into rearrangable  parts as proposed by the technology company and public interest faction of DSTAC.

The group was particularly exercised by an ex parte filing with the commission in late October by Public Knowledge, Google, Amazon and Hauppauge purporting to fill in the technical details of the “virtual head-end” proposal made by the technology faction of DSTAC for separating out the components of pay-TV services. According to MPAA, NCTA et. al., however, the new version “is so changed that it is barely recognizable from [the technology group’s] earlier proposal in the DSTAC Report,” and required more time for study before they could adequately respond to it. Read More »

Will The FCC Finally ‘Tear Up The Set-Top Box’?

The FCC kicked off the second phase of a process this week that could, eventually, change how pay-TV service is delivered to the home and by whom. On Monday, the commission issued a formal notice seeking comments on a set of proposals developed by the Downloadable Security Technology Advisory Committee (DSTAC) for how to enable third-party retail set-top boxes to better interoperate with pay-TV services. DSTAC submitted its proposals last week and the FCC posted six-page summary of its report on Friday [note: the FCC’s IT system will be inaccessible  until Sept. 8 due to an upgrade, so links temporarily may not work].

The first phase of the process began in January, when the FCC convened DSTAC at the direction of Congress. As spelled out in the Satellite Television Extension and Locset-top_box_openalism Act Reauthorization law (STELAR) passed last December, DSTAC’s mandate was to “identify, report, and recommend performance objectives, technical capabilities, and technical standards of a not unduly burdensome, uniform, and technology- and platform-neutral software-based downloadable security system designed to promote the competitive availability of [pay-TV] navigation devices in furtherance of section 629 of the Communications Act of 1934.”

It did not go well. From the beginning there was disagreement within both the committee and the FCC as to the proper scope of the mission and the committee soon devolved into two opposing and roughly equal camps, with pay-TV providers and equipment makers on one side, and CE makers and technology companies, along with consumer advocates, in the other. In broad strokes, the first camp wanted to focus the discussion narrowly on the technical aspects of downloadable security, while the latter camp sought to focus the discussion more broadly on the goal of “promot[ing] the competitive availability of navigation devices” including security and non-security elements of pay-TV service. Read More »

Cracking The OTT Ice On Live Local Sports

What a difference a spin-off makes. Barely a week after Major League Baseball’s 30 team owners approved the spin-off of BAM Tech, the streaming technology arm of MLB Advanced Media, reports surfaced that the league is drafting deal papers with Fox Sports to extend authenticated in-market streaming rights to Fox’s 15 regional sports networks (RSNs) beginning with the 2016 season.

Like most major sports leagues, MLB controls streaming rights for all of its teams’ games and game-related content. The league sells a high-end package of out-of-market games through MLB.com, but only the Toronto Blue Jays currently offer in-market streaming. The league and U.S. RSNs, led by Fox, have been negotiating Franklin_Gutierrez_hitting_HRover in-market streaming rights for years, but the league’s insistence that all streams be hosted by MLBAM –officially to ensure stream quality — has long been a roadblock to any deal because it would require Fox’s pay-TV affiliates to share subscriber information with the league during the authentication process. Under the deal now being finalized, according to the reports, Fox will handle authentication and fans will be able to access the games through their local RSN’s website, via the FoxSportsGo app, or through their service provider’s TV Everywhere app.

As part of the deal, Fox will still be required to use BAM Tech as its primary streaming technology vendor, and to pay a rights fee to MLB equal to around 4 percent of the team’s overall media deal. Read More »

Going Over The Top Without Cutting The Cord

Trying to figure out what the stealthy startup Layer3 TV is planning to unleash later this year has become something of a parlor game among pay-TV industry watchers. The VC-backed company, founded in Boston by two cable-industry veterans but now headquartered in Denver, has said little about its plans beyond its goal to become “a next generation cable provider spearheading a new era of home media, combining the best of television, social, and digital life.” How it plans to do that, though, remains a closely guarded secret.

The company’s name — Layer3 — refers to the 7-layer TCP/IP stack, specifically the packet routing layer, which may be a hint. And its two co-founders, Jeff Binder and Layer3 TVDave Fellows, are a couple of confirmed gear-heads. Binder was the founder of VOD systems provider Broadbus Technologies, which was sold to Motorola in 2006, while Fellows is a former CTO at Comcast and AT&T Broadband. So it’s reasonable to assume that whatever Layer3 is planning will leverage existing cable-cum-broadband plant.

The announcement of a second-round of funding in June that raised $51 million offered further hints.

“Cable television may have dominated the business press this year but consumers continue to crave a simple, yet elegant, solution for managing the newest innovations in video, social and digital,” Binder said in a statement. “Layer3 TV is the new cable — putting subscribers at the center of the universe by giving them seamless control of their entertainment relationships.” Read More »

OTT Retransmission: The Next Net Neutrality

Come the fall, the Federal Communications Commssion’s consideration of its proposal to reclassify some over-the-top video services as multichannel video programming providers (MVPDs) is likely to become the agency’s next highly divisive issue, reprising the same ideological and partisan differences that marked the debate over net neutrality.

Last month, FCC chairman Tom Wheeler confirmed that the commission will take up the proposal in the fall, and indicated that he favored making the switch, which would grant online video distributors (OVDs) the same program access rights as cable and satellite providers while also imposing some of the same restrictions and FCC sealrequirements. But in a speech to the Churchill Club in Palo Alto, Calif., last week, Republican commissioner Ajit Pai, who had dissented at great length from the FCC’s net neutrality rules, laid down the gauntlet again.

“This morning, I would like to make clear that I strongly oppose this proposal,” Pai said. “Given the remarkable success of the over-the-top video industry, the burden should be on those who favor new regulations to prove what’s wrong and explain why we should change. That case just hasn’t been made.”

As with his opposition to net neutrality rules, Pai’s analysis of OVD reclassification leans heavily on standard conservative “free market: good; regulation: bad” framing. Beyond the boilerplate, though, he raises an issue that I also noted in a previous post here on OVD reclassification: Changing the FCC’s definition of who qualifies as a MVPD, by itself, will not guarantee OVDs will be able to retransmit broadcast signals on the same terms as cable and satellite providers because the FCC has no authority to convey a license to the copyrighted programming contained in those signals. Traditional cable TV systems operate under a compulsory license, created by Congress and administered by the U.S. Copyright Office, that gives them automatic permission to rebroadcast copyrighted programming in exchange for paying statutory royalties. Read More »

DSTAC-ing The Pay-TV Deck

While over-the-top video services may soon need to ponder whether to become MVPD’s in the eye of the FCC, traditional MVPDs are wondering how far the FCC might go to force them to behave more like OTT services.

The FCC’s Media Bureau convened the penultimate meeting of the Downloadable Security Technical Advisory Committee (DSTAC) this week, ahead of a September Cable_Guy4th deadline to come up with technical recommendations for a successor to the CableCARD. The report, and the deadline, were mandated by Congress as part of the STELA Reauthorization Act it passed in December in an effort to spur the market for third-party retail devices that can be used to control pay-TV services without relying on service providers’ proprietary set-top boxes.

Bringing more competition to the set-top has been an official goal of Congress and the FCC since 1996, when Congress directed the agency to come up with a solution as part of the Telecommunications Act — a provision knows as Section 629. Since then, however, the best the agency and the industry have come up with is the CableCARD, a hardware dongle for cable conditional access that does not support many interactive features, such as video-on-demand and which is not compatible with direct-broadcast satellite services or with IPTV systems like AT&T’s U-Verse. Read More »

Who Wants To Be An MVPD?

FCC chairman Tom Wheeler dropped a pretty broad hint last month that the commission is gearing up to reclassify at least some over-the-top video services as multichannel video programming distributors (MVPDs) as described in the Communications Act, putting them on roughly the same regulatory footing as cable and satellite providers.

In theory, the change could make it easier for services like Sling TV and Apple’s long-rumored subscription video service to add local broadcast channels to their Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearinglineups because it would extend the same retransmission consent rules to online video distributors as apply to cable and satellite providers.

Under the current retrans rules, broadcasters are required to enter “good faith” negotiations with any qualified MVPD for carriage of their signals. Similar rules, which presumably would also be extended to OTT services, require that cable networks owned by or affiliated with cable operators, such as the NBC Universal cable networks now owned by Comcast, must make their programming available to all other MVPDs.

Whether any OTT services actually want to be classified as MVPDs, however could be another matter. Read More »