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FCC considers a change of definition that could shake up broadcast business

Change is happening so fast in the television business that it’s getting harder and harder to keep up. But as television continues its move toward the Internet, a newly appointed FCC will consider a change that could have huge implications for the entire industry.

The commission is considering changing the definition of “multichannel video programming distributor” (MVPD) to include Internet-based program providers such as Netflix, YouTube, Amazon, Apple and Hulu. If that happens, watch out.

The current rules, made in the pre-Internet era, say that the term MVPD applies only to cable and satellite providers. Because of this, television networks don’t have to sell their content to program providers who are not designated an MVPD.

If the FCC changes that definition, MVPDs could then include Internet-only program providers. This means networks would have to sell to Internet providers that they can now avoid. If this happens, it would be a boon for Internet companies and cord-cutters that want to get rid of cable’s big program bundles and high monthly fees.

FCC General Counsel Austin Schlick, speaking at an NTCA conference, acknowledged that the move would have “very, very broad implications.”

Today, Internet-based content services are at the mercy of content owners as to whether they can air certain programming. For example, one can’t watch CBS programming on Hulu. A simple redefinition of MVPD could change that quickly.

This new rule change would also affect major pay television issues like bundling of programs and high subscriber fees. Niche-based Internet content providers could target their content to better service audiences than pay TV does today.

Such a move by the FCC would also pave the way for exactly the kind of content offerings that Apple reportedly wants for the long-rumored iTV initiative.

This won’t happen until a full FCC is appointed and confirmed. But the issue is on the table and if the change occurs, it will shake-up the business model for the entire television industry.