Rockefeller Wants to Give Online Video Services Parity With Cable

But the bill is in for a fight from broadcasters and cable interests alike

Hoping to give cord-cutters more options and more content, Sen. Rockefeller (D-W.Va.) this afternoon will introduce a bill that offers online video services like Aereo and Netflix the same regulatory protections as cable and satellite TV. Called the Consumer Choice in Online Video Act, the bill is intended to stimulate the new online video marketplace by making it easier for online video companies to compete.

"Consumers must be able to benefit from online video's promise of decreased costs, increased choice, and higher-quality video content," Rockefeller said in a statement.

The concept for the bill grew out of a hearing Rockefeller held last year on the future of video. In that hearing, the chairman of the Senate commerce committee heard from Aereo investor Barry Diller and Amazon's Paul Misener about some of the difficulties the nascent services had competing with entrenched pay TV services because of their control over content.

In a background call with reporters, which was vague on details but strong on spin, Rockefeller's aides described the bill as doing for online video what the Cable Act of 1992 did for cable providers, arguing that sometimes market forces were not enough to maintain competition.

The bill would allow an online video service to elect to be classified like a multi-video program distributor that is regulated and protected by the Federal Communications Commission. As such, the online services would have access to and be able to negotiate for content under the same rules as cable and satellite systems. To open up access to programming, the bill puts limits on the use of contractual provisions in video programming carriage contracts that have prevented online video services from offering some content.

Although Rockefeller's legislation should help services like Aereo by giving them easier access to programming, it does not address the company’s ongoing lawsuit with broadcasters over copyright infringement.

Codifying net neutrality, another provision of the bill, would limit the ability of broadband providers to degrade the delivery of the video service to consumers and protect the services against Internet service providers, like Comcast, which happen to be affiliated with cable or satellite TV providers.

Finally, the bill would require broadband Internet services to be clearer about billing based on usage and directs the FCC to monitor broadband billing practices.

While consumer groups like Free Press praised the bill as a welcome solution to "keep [powerful cable, Internet and broadcast companies] from discriminating against online options," both broadcasters and the cable industry found things to dislike in Rockefeller's bill.

Gordon Smith, president and CEO of the NAB, whose biggest members are locked in court fights with Aereo over copyright infringement, said in a statement he was "concerned about proposals that may legitimize theft of copyrighted programming."

The NCTA attacked the very premise of the bill—that online video services needed any help at all to compete. "Services like Netflix already have almost 30 million U.S. subscribers, far larger than any single multichannel provider," said the NCTA in a statement. In addition, Hulu, iTunes, Amazon Prime, Redbox, Vudu, Vimeo, Boxee, Roku, AppleTV and YouTube are providing consumers with increasing options for competitive entertainment choices, facilitated in large part by massive ongoing investments in broadband networks. … Prudent policy dictates the removal of regulatory obstacles for all instead of creating marketplace disparities that would 'cherry pick' rights and obligations for some."

By taking on the cable, satellite and broadcast lobbies, the bill could have a tough time getting any traction and may be dead on arrival. However, the bill will please public interest groups and crank up the debate in Washington over online video, retransmission consent and copyright.