More signs of the need for a fresh approach to copyright licensing for audiovisual content

In recent months I’ve suggested – here and here, for example – that changes in the video delivery landscape around us demand a good, hard look at the various laws which govern transmission and, especially, retransmission of audiovisual content usually seen on television.   It’s fair to say that, while I don’t advocate any particular approach, I support change that brings the various laws in this area into line with the viewing habits of an increasing amount of television watchers.   

But that would entail a herculean effort involving potential changes to the regulations of two major government agencies: the FCC and the Copyright Office. The FCC would be looking, or re-looking, at such things as the definition of an MVPD as well as rules governing must carry, retransmission consent, fin/syn and program exclusivity. The Copyright Office would have to examine its regs covering cable and satellite compulsory licenses. Changes there and elsewhere would have to be justified in light of actual evidence that the media delivery landscape is changing.  (I’m sold on this, but – if you can believe this – the Administrative Procedure Act requires more than my personal stamp of approval).

So that’s why I’m happy to see signs of serious inquiry on two fronts.

 One such sign is the FCC’s Further Notice of Inquiry in the Matter of Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming (FNOI), released on April 21.   On its face, this is a pretty mundane request by the FCC for information relating to competition in the video marketplace. In fact, it’s the Commission’s 14th annual review since Congress first directed the FCC to conduct such reviews back in the 1992 Cable Act.

But if you’re paying attention, you’ll realize that 2011 – 1992 ≠ 14. That’s because the FNOI relates to the 2007 proceeding. Why the holdup? Turns out the Commission has reviewed the “way in which it uses data” for reports like this, and it has concluded that the data previously submitted are “insufficient to produce an adequate report” – so the Commission is now asking for more data. 

But what’s interesting here is that, in making that request, the Commission notes the recently “increased availability of video programming over the Internet, made available by online video distributors (‘OVDs’)”. And, more importantly, the Commission specifically requests data on OVD-related data “in light of the growing importance of online video distribution to consumers” (apparently for the first time). So the Commission is trying to play a little catch-up in terms of assessing competition in the video market in light of the rise in OVDs.

In other words, the FCC sees OVDs as a significant separate element in the video distribution process, and wants to ascertain their effect on that marketplace. According to the Commission, “for most consumers [OVDs] are not a substitute for MVPD service today, but rather an additional method for viewing video programming”. Perhaps OVDs aren’t big enough to warrant regulatory change, but we seem headed in that direction – at least the FCC is now standing up and taking notice.

I see this recognition of the rising importance of OVDs as more significant than any substantive information likely to be elicited in response to the nearly 200 separate questions posed in the FNOI. Comments in response to the FNOI are due by June 8, 2011; reply comments are due by July 8.

Meanwhile, over at the Copyright Office, here’s a quick update on that Office’s investigation of the future of video delivery, i.e., the inquiry into the continued need for the cable and satellite compulsory licenses.   Comments were due on April 17. I’ve had a chance to review the comments received from 17 parties ranging from the NAB to outcast cable wannabe ivi, Inc. to the “Canadian Claimants Group”. Here’s what stands out:

Most commenters from all sectors – including cable provider AT&T, program provider NPR, a group of rural MVPDs, Dish Network, a group of “Devotional Claimants”, the NCTA, the Independent Film and Television Alliance, the TVMLC, Verizon, PBS, APTS and WGBH – opposed repeal of the compulsory licenses. A common concern: direct licensing or collective licensing alternatives would be too expensive and burdensome to provide a diversity of programming to the public.   

The NAB urged retention of the compulsory licenses enabling local carriage of stations. But it suggested terminating those allowing carriage of distant signals except for markets with unserved households or a shortage of signals, or in the case of nationally distributed superstations. 

ivi, Inc., opposed the phasing out of the compulsory licenses because that would “disincentivize” folks outside the TV industry from developing new distribution technologies, because  “there is no way to monetize that technology is to sell or license it [sic] to the gatekeepers of content that have every reason to keep their legacy distribution systems in place.” ivi, Inc. seeks extension of the compulsory licenses to online video distributors – no surprise there.

Dish Network recommended transitioning to a single compulsory license with “bright line rules for the carriage of digital broadcast TV signals applicable to cable and satellite, as well as online video distributors.” 

The Canadian Claimants Group cautioned that elimination of the compulsory licenses would likely result in the inability to retransmit an entire broadcast signal.

“Program Suppliers”, including the MPAA and other producers, went entirely in the other direction, claiming that compulsory licenses harm copyright owners. They advocated a combination of licensing approaches (e.g., direct, collective, or sublicensing). The Commissioner of Baseball agreed, urging that “any system replacing the statutory licenses replicate[ ] as closely as possible the marketplace-based system that has provided, and continues to provide, the public with a vast array of Baseball telecasts on terms and conditions that all affected parties have considered to be fair and reasonable.”

Some entities, including Rural MVPDs, called for reform of the retransmission consent process. Others, such as the NCTA, Dish Network, DirecTV, and Verizon noted that repeal of the compulsory licenses would require reform of the FCCs rules.

BMI and ASCAP, as one might guess, viewed collective licenses as striking a proper balance between free market and regulatory approaches.

Reply comments are due on May 17.  We’ll keep you posted.