Internet TV providers could soon get the same content rights and fights as pay TV

FCC Chairman Tom Wheeler submitted a proposal Tuesday to begin a rulemaking process that would let certain online television providers get access to the same content traditional pay TV companies like Comcast or AT&T do. In a blog post, the chairman wrote that he would circulate a Notice of Proposed Rulemaking on the issue as part of his efforts to make the communications world more competitive.

The proposal isn’t aimed at the on-demand providers like Netflix or Hulu, but companies that are trying to provide multiple channels of linear programming via the internet. The issue is that the FCC had earlier decided that to be classified as a Multichannel Video Program Distributor (a MVPD) a company had to have access to both the transmission line (the cable or copper leading to the home) as well as the content.

But in the IP era where transmission and the content are separated, the rules appear outdated to the Chairman and to companies that are sick of trying to get access to content so they can deliver services over the internet. However, it’s likely these benefits of being guaranteed the right to access content will also mean that online providers will have to negotiate the same retransmission fees and broadcast rights that the pay TV companies do today.

If adopted, the new rules would be a win for tech firms like Apple or Amazon, which are interested in providing TV services and programming, as well as for smaller online video companies like Aereo which could use them to try to get its shuttered service back on firmer footing by negotiating directly with broadcasters to deliver television services online. The company released a statement from Aereo CEO and Founder, Chet Kanojia praising Wheeler.

[blockquote person=”Chet Kanojia” attribution=”Chet Kanojia, CEO, Aereo”]This is an important step in the right direction for consumers. Clarifying the definition of MVPD to encompass linear online video distributors will create a stronger, more competitive television landscape for consumers.

“By moving this Notice of Proposed Rulemaking (NPRM) forward, the FCC will provide much-needed regulatory clarity and a clear set of rules for linear video programming systems, which ultimately, will increase investment in the video programming market. As a result, innovation will flourish and new video products and services will emerge, providing consumers with more choices in programming and pricing. [/blockquote]

Meanwhile, the National Association of Broadcasters looked at the proposal with a bit more skepticism, issuing a statement that simply said:

[blockquote person=”” attribution=””]NAB welcomes video distribution platforms that legally deliver local TV content to consumers when and where they want it. We look forward to engaging with the FCC to ensure that this new competition enhances rather than undermines localism.

The next step will be a vote on whether to adopt the proposal and then a lengthy comment period and fight over how the rules will be drafted. The fight will likely settle over issues of what rights and subsequent obligations the newly minted MVPDs will have. Is [company]Amazon[/company] or [company]Aereo[/company] ready to take on more obligations in exchange for rights to access programming?

Update: This story was updated on Oct. 29 because C-SPAN is not an legal obligation for MVPDs, but a voluntary one created by the cable companies.