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Media Bureau Decision May Undercut IPTV Providers’ Ability to Use Program Access Rules

April 23, 2010
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This week, the Media Bureau (“Bureau”) of the Federal Communications Commission (FCC) preliminarily rejected an Internet Protocol Television (“IPTV”) provider’s claim that it met the statutory definition of a multichannel video programming distributor (“MVPD”). The Bureau’s decision casts doubt on whether an IPTV provider could successfully pursue a complaint under the FCC’s program access rules.

The case stems from a dispute between IPTV provider Sky Angel U.S., LLC (“Sky Angel”) and Discovery Communications (“Discovery”). Sky Angel delivers nationwide programming service to its customers via a set-top box that has a broadband Internet input and video output that can be connected to a television set. Discovery entered into an affiliation agreement with Sky Angel in 2007 allowing Sky Angel to distribute several of Discovery’s channels on its system. In January of 2010, Discovery notified Sky Angel that it was terminating the agreement. Sky Angel responded by filing a program access complaint against Discovery, which is subject to the program access rules due to its affiliation with DirecTV. Sky Angel also asked for a “stand still” order, which would enable Sky Angel to continue carrying Discovery programming during the pendency of the complaint.

The Bureau rejected Sky Angel’s request for a standstill order on the grounds that Sky Angel was unlikely to succeed on the merits because it was unlikely to prove that it was an MVPD. Under the Communications Act, an MVPD is defined as, “a person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming.” Because only MVPDs are entitled to relief under the program access rules, a finding that Sky Angel is not an MVPD would prove fatal to any program access complaint.

According to the Bureau, Sky Angel failed to prove that it offered “channels.” The decision suggests that a channel is not merely a stream of video programming, as Sky Angel had argued, but rather a qualifying MVPD must offer multiple programming services over “transmission paths” supplied by the MVPD. Sky Angel’s service did not provide its own transmission paths, instead relying on its customers’ Internet service providers to provide such paths. Therefore, the Bureau denied Sky Angel’s request for a standstill order, allowing Discovery to keep its programming off of Sky Angel’s system while the program access complaint is pending.

The Bureau did caution that its decision was not a final determination of whether Sky Angel was an MVPD, but merely a determination based upon the currently available evidence. However, the finding that a transmission path is necessary for a program provider to be deemed an MVPD could prove difficult for Sky Angel and other IPTV providers to overcome.

We would be pleased to respond to any questions regarding these matters.