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FCC Kicks Off Push to Regulate Internet TV Services Like Cable

The new competition with cable could lower prices for consumers.


Federal Communications Commission Chairman Tom Wheeler Tuesday circulated a proposal to regulate Internet TV providers like Aereo, a move that could make it easier for online video services to compete with cable providers.

FCC officials are looking at updating rules designed to regulate cable systems and expand them to cover services that deliver TV to consumers over the Internet instead of satellite dishes or cable lines. The move comes as several media companies, including Dish Network and Verizon Communications, are planning to launch Internet-based video services.

This could be a big deal because it might make it easier for Internet TV providers to negotiate for access to must-have channels, like local broadcast stations. That would allow them to create online video services that could be a replacement for larger, more traditional pay-TV services like cable or satellite.

If approved, the changes to “multichannel video program distributors” rules could also be a major help for struggling video provider Aereo, which had to shut down its broadcast-TV service after several courts found it violated copyright laws.

Details of Wheeler’s plan aren’t available yet. Broadly, it would allow Internet TV startups to have the same rights as cable operators like Comcast* or Cablevision to negotiate with local TV station owners to carry network channels.

The change would give Internet TV providers “the same access to programming owned by cable operators and the same ability to negotiate to carry broadcast TV stations that Congress gave to satellite systems in order to ensure competitive video markets,” Wheeler wrote in a blog post.

Another Internet TV provider, SkyAngel, asked the FCC to do this years ago but its request languished at the agency. Aereo’s well-publicized problems and a move by several companies to launch online competitors to cable operators spurred interest at the FCC to change the rules.

The hope behind all of this is that online video services might someday offer a smaller, cheaper replacement for the bloated, expensive cable packages that many Americans pay for each month.

Internet TV services might be able to “offer smaller or specialized packages of video programming, so consumers will be able to mix-and-match to suit their tastes,” Wheeler wrote. “And perhaps consumers will not be forced to pay for channels they never watch.”

* Comcast owns NBCUniversal, which is a minority investor in Revere Digital, Re/code’s parent company.

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