Here’s a hohum for internet MVPDs


Set top boxJoel Espelien, an advisor for The Diffusion Group, believes the FCC’s move to add linear internet program providers to the MVPD universe is a proceeding going exactly nowhere.

“Many seem to think such a rule would be the savior of Aereo and its progeny, and usher in a golden age for OTT providers,” he wrote. “Are you kidding me? This entire proposal reveals how far behind the curve the FCC is when it comes to understanding the future of TV.”

One problem with such a service is that it would be far beyond the data capacity of a typical mobile device.

But a bigger problem is that such a service, by its very linearity, robs the user of the ability to choose the time when a particular program runs, not to mention the ability to pause or rewind as desired.

He said it 1,000 people were offered a choice between HBO Go or a new HBO OTT app, 1,000 would choose HBO Go. Unless one of the respondents was an FCC staffer promoting internet MVPDs. Then the results would be 999 to 1, says Epselien.

The other big reason is that MVPD status would put retransmission consent fees on the table. He noted that this would sink rather than salvage Aereo in particular. Aereo’s business model was built on a foundation of providing broadcast television for free – not at $1.50 or $2.00 per month per subscriber.

Espeliendoubts that incorporating the reality of having to pay for content like any other MVPD is likely going to impose a barrier to entry that few if any linear MPVD prospects will be able to clear.

Espelienconcluded, “The TV business is a curious amalgam of history, law, business, pop culture, and technology. Adapting this complicated system to the Internet (another weird combination of things, but that’s another story) is challenging, to say the least. As a result, the FCC should be commended for (belatedly) recognizing both how anachronistic the facilities-based MVPD definition has become, and the necessity of finding a way to bring OTT providers into TV’s regulatory framework. At the same time, however, its dogged insistence on linear broadcast as the sine qua non of the TV experience reveals a complete misunderstanding of what broadband video is about. Bottom line – and regardless of what FCC regulations say or don’t say — the future of TV is still an app.”