|November 21, 2013|
Previously published on November 2013
On Tuesday, November 12, 2013, Senator Rockefeller (D-WV), chairman of the Senate Commerce Committee, introduced the “Consumer Choice in Online Video Act” (CCOVA). Also on November 12, 2013, Senators Blumenthal (D-CT) and McCain (R-AZ) introduced the “Furthering Access and Networks for Sports (FANS) Act.” A companion bill to the FANS Act was introduced in the House by Rep. Higgins (D-NY). The bills are briefly described below and more detailed summaries are attached.
The Rockefeller bill. Of the two bills, the Rockefeller bill has garnered most of the press and industry attention. Over 60 pages in length, it is divided into three substantive “titles.” Title I focuses on “consumer protection” issues related to Internet service, such as disclosures in advertising, at point of sale, and in monthly bills regarding data usage and other aspects of ISP service. Title II, modeled in part on the non-discrimination provisions of the FCC’s network neutrality rules and on the “program access’’ rules that have been applicable to cable television since 1992, creates a number of new regulatory obligations and protections for online video distributors (OVDs) and for video programmers whose content is made available via the Internet. Notably, Title II includes a provision that would expressly permit “antenna rental services” such as Aereo to give consumers access to the signals of over-the-air broadcast television stations without having to obtain retransmission consent from the stations. Finally, Title III establishes a framework under which OVDs may elect to be treated as multichannel video programming distributors (MVPDs) for purposes of the Communications Act. Such OVDs - referred to as “non-facilities based multichannel video programming distributors” (NFB-MVPDs) - will be eligible for the cable compulsory copyright license and will be subject to modified versions of certain regulations applicable to traditional MVPDs (including modified broadcast signal carriage rules, program access rules, and privacy rules). NFB-MVPDs are expressly exempted from certain other rules, including local franchising requirements.
The FANS Act. As indicated, the FANS Act has not received the same level of attention as the Rockefeller bill. The FANS Act is a narrowly drawn piece of legislation whose primary purpose is to protect consumers from losing access to sports programming when MVPDs and programmers (broadcast and non-broadcast) become embroiled in a carriage dispute (such as a retransmission consent blackout). Under the FANS Act, the antitrust exemption currently enjoyed by professional sports leagues for their broadcasting agreements would not apply to any league that does not expressly prohibit the video licensees of the leagues’ events from intentionally removing such events from an MVPD during or in connection with a carriage negotiation. The bill also requires that, as a condition of eligibility for the current antitrust exemption, a professional sports league must make a sponsored telecast of certain “home” events available to consumers via an Internet platform, for a fee or otherwise, where the event is not being carried on a local broadcast television station or an MVPD. The final part of the FANS Act modifies the provision of the Clayton Act that deems certain conduct by major league baseball (which previously had been held to be judicially exempt from antitrust regulation) to be subject to the antitrust laws.
Analysis. The Rockefeller bill, which some people have dubbed the “Aereo/Netflix” bill, drew immediate criticism from a number of industry groups, including both NAB and NCTA. The aggressively regulatory approach under the Rockefeller bill, which almost certainly will be anathema to the Republican-controlled House, ensures that bill as a whole is not likely to become law. However, as chairman of the Commerce Committee (and in deference to the fact that he is retiring at the end of his current term), Senator Rockefeller is in a position to keep attention focused on the bill if he chooses. It would not be a surprise to see one or more hearings on the bill. It also is possible for pieces of the bill to surface as amendments to “must pass” legislation reauthorizing the Satellite Television Extension and Localism Act (STELA) that will be considered by Congress between now and the end of next year.
The FANS Act also is unlikely to move as a standalone bill. While it will be presented as a “populist” consumer-oriented measure, opposition from the broadcasters and sports leagues may be enough to keep it bottled up. Again, however, certain aspects of the bill, particularly the portions addressing sports programming black outs, may be picked up by supporters of retransmission consent reform during the STELA reauthorization debate. It should be noted that the FCC has indicated that it intends to commence a rulemaking to repeal a related, but separate FCC rule requiring cable operators and satellite providers to black out distant signals carrying certain sporting events that are not available from a local over-the-air broadcast station. It is unclear whether the introduction of the FANS Act will have an impact on the FCC’s consideration of this rulemaking proceeding.