The rapid technological change of the last few decades has changed every aspect of the programming marketplace, including the way users consume video. As traditional television formats give way to cord-cutting and digital streaming, the applicable laws and regulations have not fully kept pace with new developments.
Over-the-air (OTA), or traditional television transmission, and over-the-top (OTT), or delivery by broadband internet from alternate content providers, are two of the most common platform technologies delivering video content to viewers. Digital streaming services have revolutionized the video marketplace, offering myriad ways for consumers to access television programming on demand.
These OTT streaming services do not currently fall neatly under the Cable Communications Policy Act of 1984 and the Cable Television Consumer Protection and Competition Act of 1992, which are the primary laws governing the carriage of broadcast television on multichannel video programming distributors (MVPDs). Digital streaming platforms are not classified under a regulatory framework like MVPDs for the purpose of must-carry rules and retransmission consent and are not subject to the local channel carriage responsibilities as pay-tv platforms. OTA and OTT platforms are also subject to different regulatory standards and obligations in areas like emergency alert requirements and political advertising disclosures.
Broadcasters have long asked the FCC to adopt rules treating on-demand streaming platforms under the same standards as traditional cable and satellite providers. Local television broadcasters are frequently excluded when television networks and virtual streaming platforms negotiate terms of carriage. As a result, local and religious broadcasters are often presented with unfair or unfavorable take-it-or-leave-it carriage proposals from digital streaming platforms. These arrangements deprive viewers who utilize streaming platforms of local, religious programming with a nexus to their communities.
Opened in 2014, FCC Docket 14-261 concerns the regulatory framework governing MVPDs. Recently, industry groups have rallied to petition the FCC to refresh the record and reassess the changes that have been shaping the video marketplace for nearly a decade since the docket was opened.
For example, in one ex parte filing, the National Association of Broadcasters (NAB) explained that “The top five vMVPDs (none of which existed when this proceeding began), have grown so much in a short time that together they have as many subscribers as Charter, the nation’s second largest MVPD. At the inception of this proceeding, vMVPDs were in their infancy.”
In recent hearings and in a letter sent to Chairwoman Rosenworcel, Senator Maria Cantwell (D-Wash.), Chairwoman of the Senate Committee on Commerce, Science and Transportation, has signaled her support for refreshing the MVPD docket. Cantwell points out that “there is 90 percent more local news being broadcast than 20 years ago, producing an average of more than six hours of programming per weekday” but “conversely, during this same time period, more and more households have made the decision to ‘cut the cord,’ as the penetration rate for traditional MVPDs in the United States has dropped from 88.3 percent in 2013 to 51.6 percent in 2022.”
As such, Cantwell writes:
Tens of millions of Americans continue to rely on local broadcasters for news about their communities. While local news is essential to our communities, stations are not compensated for the full value of their content when transmitted via television streaming services. The current regime weakens local broadcasters’ bargaining power and ability to negotiate directly with these services, which is contrary to good faith negotiation requirements of Section 325 of the Communications Act, and denies them fair compensation for their content. As a result, local broadcasters estimate that they receive 10-20% less for their content when it is distributed by linear television streaming services. Local broadcasters deserve a level playing field and fair compensation for their work.
Rosenworcel appears to have taken this and similar arguments under consideration, circulating a notice of proposed rulemaking to her colleagues on July 12 “to initiate a proceeding to understand challenges related to distribution and supply in this market, especially as it relates to independent programming.”
While there has been considerable support for refreshing the record, prominent Republican leaders in the House of Representatives have expressed disapproval for the move. In a letter to the FCC, House Energy & Commerce Committee chair Cathy McMorris Rodgers (R-Wash.) and Communications Subcommittee chair Bob Latta (R-Ohio), cited previous claims by Rosenworcel that the FCC did not have the authority to regulate online video providers and urged the FCC not to pursue new action on the issue. Rodgers and Latta made their position clear that while they appreciate the gravity of the issue, action should be left to Congress.
In a similar vein, others have argued against FCC intervention by way of letting the market fix the problem, holding that excessive intervention would create an inefficient market and decrease the number of stations consumers would have access to. This argument has been made historically in prior conversations about the issue and is being made again by select large providers such as FUBO and Verizon.
NRB has a distinct interest in the issue of MVPD and vMVPD classification as NRB’s member constituency includes many television broadcasters who produce or telecast religious programming which often has a uniquely local interest. Furthermore, many Christian television broadcasters rely on must-carry rules to provide valuable content that ministers to the spiritual welfare of their local communities. In May 2023 at the 2023 NRB International Christian Media Convention, NRB’s Board of Directors approved a resolution calling on Congress to review the legal framework and statutory constraints under which the FCC must assess these issues, as well as urging the FCC “to refresh MB Docket 14-261 to explore and understand more recent changes in the local television marketplace and their impact on the public interest.” Read NRB’s board resolution here.
NRB continues to monitor updates to MB Docket 14-261 as we champion a favorable business environment for local, independent, and religious broadcasters.
