Since we haven’t actually seen the Notice of Proposed Rulemaking (NPRM) circulating at the FCC regarding program access rules for online video distributors (OVDs) I’m not taking sides yet on whether the proposed changes will turn out to be truly momentous, or simply meh. One thing I am prepared to declare, however, is that any rule changes aimed at giving OVDs the right to negotiate carriage of broadcast and cable networks on terms more or less comparable to what cable and satellite distributors operate under will keep a lot of lawyers busy trying to figure out what is actually being negotiated for.
To cite one particularly relevant recent example of the sort of confusion such rules would engender: the new standalone streaming service from CBS, does not include the NFL games that CBS broadcasts because CBS does not have streaming rights to NFL games. Instead, the league treats streaming rights as distinct from broadcast rights and licenses those rights separately, primarily as part of DirecTV’s exclusive NFL Sunday Ticket package of out-of-market games and Verizons’ package of in-market games for mobile devices.
What would it mean, then, for the FCC to mandate that CBS make its programming available to OVDs on terms comparable to what cable and satellite operators are offered when the network can’t deliver a comparable lineup of programming?
The problem isn’t limited to the NFL. By and large, content owners of all stripes have treated streaming rights as a separate class, distinct from broadcast rights, and licensed them separately. But the problem will be particularly acute with respect to live sports, which comprise perhaps the most valuable (and expensive) category of TV programming but where the leagues have generally maintained tight, centralized control over digital rights.
Insofar as the FCC’s goal is to create a level playing field, where OVDs could compete effectively with facilities-based pay-TV providers, the disparate treatment of broadcast and digital rights will make the job much more complicated than simply mandating carriage negotiations. It’s hard to see how the FCC would have the authority to require the NFL (or any other rights owner) to make digital rights available to its broadcast partners for the purposes of online distribution. But the agency could find itself getting pretty far into the content licensing weeds trying to write regs defining “comparable terms” for non-comparable programming.
Watching the FCC try to square that circle may turn out to be the most interesting programming of all.
