Retrans Talks Increasingly Contentious, Justifying Totality Test Look, FCC's Carey Says

Section 325 of the Cable Act, banning any rebroadcast of a broadcast signal without the broadcaster's consent, is a particular stumbling block as the agency tries to come up with a rules regime that would protect consumers from issues like programming blackouts, Carey said. The FCC's read of that rule is that the agency can't compel broadcasters to provide their signals, such as while in negotiations, though cable interests and allies are urging it to reconsider, she said. And Mike Nilsson of Harris Wiltshire, whose clients include pay-TV providers, said the provision deals with multichannel video programming distributors, not the FCC and its actions.

"The vast majority of the programming industry" is independent if independent is defined as any programming not affiliated with an MVPD, since only about 10 percent of programmers are affiliated with cable operators, said cable lawyer Mike Hurwitz of Willkie Farr.

The FCC is paying close attention to comments from indie programmers about how over-the-top distribution might provide an end-run solution to the problem of getting carriage on MVPDs, Carey said. The means for OTT providers to get distribution rights to content, meanwhile, is still evolving, Nilsson said. Securing rights for nonbroadcast programming requires negotiating a copyright license with the programmer, and the challenge is knowing what kind of rights to negotiate because that's a new area, Nilsson said. "All of this would be great if there was [universally] understood industry definitions," he said. "But these aren't standardized terms."

Securing rights to broadcast content is far more complex because of the legal issues involved, with the question of whether Congress will ever update statutory license rules to include online video issues unknown for the foreseeable future, Nilsson said. As a separate matter, OTT providers have run into difficulty in negotiating copyright licenses with rights holders, though some -- like PlayStation -- have had some success, Nilsson said: "Is the market slowly figuring this out? Maybe."

Panelists disagreed on set-top box issues. "This is really about content, not boxes," said Paul Glist of Davis Wright, who represents cable companies. Glist said a major flaw in the FCC proposal, backed by Google, is that it lacks protections for the sanctity of content, such as safeguards against insertion of additional advertising. "It's telling [that] the loudest voices in opposition are coming from content owners," Glist said. That data, coming without privacy protections of the Communications Act's Title VI provisions, is what backers of the proposal want, he said. Devendra Kumar of Goldberg Godles said his client, TiVo, had been pushing for set-top rules changes for years before Google was involved: "It's incredibly insulting to other companies ... they're blindly going to go behind some Google proposal."

In response to concerns raised about ad stripping under the FCC's proposal, Kumar repeatedly said that TiVo hasn't run into those concerns as a set-top maker. "There's no incentive for competitive manufacturers to do that," he said. Glist and Kumar agreed the NPRM doesn't include protections for channel placement, but Kumar said there's no set-top maker incentive for reordering channels. "Fundamentally, the content and distribution terms for content are being disregarded and the content is regarded as open source," Glist said. Panelists also disagreed whether Congress wanted the FCC to be setting up new set-top rules and how comparable the current FCC proposal is to its now-dead AllVid proposal.

Later, panelists discussed the FCC's special access proceeding (see 1604120045).