On July 11, 2014, the FCC adopted a Second Order on Reconsideration and Second Further Notice of Proposed Rulemaking responding to a coalition of consumer groups that had pushed the FCC to reconsider its position and require that programming distributors (broadcast, cable, and satellite) include closed captioning for certain IP-delivered video clips.  The new rules

Yesterday, the FCC issued a $2.25 million Forfeiture Order against TV Max Inc. (and its affiliates and subsidiaries) for “willfully and repeatedly” violating Section 325 of the Communications Act.  The fine reflects the amount proposed in the FCC’s June 2013 Notice of Apparent Liability.  In a post-Aereo world, the FCC seems to be taking retransmission violations more seriously than ever.  In addition, following a trend in recent large enforcement orders, the FCC took the position that each day TV Max acted in contravention of Section 325 constituted a separate violation of the Commission’s rules.  This approach allowed the Commission to conclude that the statutory maximum exposure exceeded $16 million, thereby clearing room for the Commission’s $2.25 million fine.  The Commission’s discussion also provides some interesting insights into its view of permissible rebroadcasts absent retransmission consent agreements. 
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Since 1992, the Federal Communications Commission (“FCC”) has been required to report to the U.S. Congress on the state of video competition. These reports are not often the most compelling reads available. With the rise of “over the top” online video distribution providers (“OVD”), this year’s report could be more interesting than usual.

The dilemma for over the OVDs is not new. If you are a non-facilities based content provider, possibly now and certainly in the future, the customer’s costs of using your services is the sum of whatever consideration you exact from them, plus the cost of their broadband service, which in some cases is based on usage. To use your content service, the customer has to pay another provider just to reach your service. That other provider (and potentially your competition) owns and controls the very delivery mechanism you must rely on for your services and has no obligation to you to ensure or even facilitate delivery of your content in a manner in which the end user would deem beneficial.

So, if your online content service business relies on the provision of internet services by a network and customer-relationship-owning provider, it is well past the time when you should have focused some effort on insuring that your access to your customer’s broadband service is sufficient for delivery of quality services and affordable by the customer. Not easy to be sure — maybe you are going to have to build networks; maybe you will enter into agreements with the facilities-based providers to give your content some measure of priority or quality when delivered to the end user, or maybe you will turn to Congress and the regulators to seek a legal and regulatory framework that requires certain facilities be made available to you. Regardless of which path is taken, the FCC’s Video Competition proceeding has something that may be important.
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David Darwin co-authored this post.

Last Friday, the FCC clarified several aspects of the complex closed-captioning regulations adopted last year applicable to service and content providers using Internet protocol (IP) to deliver video programming and to certain devices used by consumers watch video programming. In January 2012, the FCC had issued a Report and Order for the implementation of the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA).  Among other things, the CVAA and the Commission’s implementing regulations established closed captioning obligations for providers using IP to deliver video programming, as well as for certain consumer devices on which consumers watch video programming.  On June 14, 2013 the FCC released an Order on Reconsideration (Recon Order) and Further Notice of Proposed Rulemaking (FNPRM) modifying and clarifying the Report and Order, granting some waivers and denying others, which should create some additional certainty for programming providers and distributors as well as device manufacturers regarding how to comply with the regulations.  The Recon Order and FNPRM follow three petitions for reconsideration, brought by the Consumer Electronics Association, TVGuardian, and a number of consumer groups.


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