Presentation by Deborah Roy, Attorney, Telecommunications and Media Section, Antitrust Division, U.S. Department of Justice

IFT Competition Day Mexico City December 3, 2015

*The views in this presentation are not purported to represent those of the U.S. Department of Justice.

Multichannel Video Programming Distributor (“MVPD”)

◦ Cable operators, DBS operators, and telephone companies that offer multiple channels of video programming.

◦ Comcast, Time Warner Cable, DIRECTV, DISH, ATT, Verizon

Online Video Distributor (“OVD”)

◦ An entity that offers video programming by means of Internet delivery.

◦ Netflix

Video Programmer (“Programmer”)◦ An entity that delivers video programming to an MVPD or OVD.

◦ Viacom and The Walt Disney Company

2

1950’s-60’s: Broadcast Television◦ ABC CBS NBC

1970’s-80’s: Cable Television◦ HBO (1972) ESPN (1979) CNN (1980)

1990’s: Direct Broadcast Satellite “DBS”◦ DIRECTV DISH

1996: Cable Residential Broadband

3

To differentiate its offering, DBS offered a greater number of networks.

Cable responded by increasing the number of networks that it offered.

Continued innovative responses.

The MVPD Business Model remained the same.

4

Studios: Content Creators

Programmers

MVPDs

Consumer

5

6

Consumers purchase a package of networks

◦ Basic Packages

20 to 250 networks

$20.00 to $70.00/month

◦ Specialty Packages

Sports

Foreign Language

HBO

Internet Access

7

Time-Shifted Viewing◦ Digital Video Recorder “DVR” (2005-2007)

◦ Video On-Demand “VOD” (2005-2007)

Video over the Internet◦ YouTube (2005)

◦ Netflix Streaming (2007)

8

Subscription Video on Demand (“SVOD”)◦ Netflix

Direct-to-Consumer Applications (“DTC”)◦ CBS All-Access HBO Now

Linear Streaming (“vMVPD”)◦ DISH Sling

◦ Apple TV Streaming

◦ Cable OTT Service

9

1. Internet Access to deliver video content Reasonable pricing

Reasonable speeds

Reasonable delivery quality

2. Programming Access First Run - Rolling 5 Episodes - Full Current Season

Differentiation – Smaller Bundle of Select Networks

10

Internet Access to deliver content◦ Data Caps or Usage Based Pricing

◦ Prioritization/Degrading Quality

Programming Access◦ Alternative Distribution Clauses (“ADMS”)

Outright Prohibition

No online distribution for a period of time

Bundling Requirements for OVD

11

Comcast-NBCU

◦ DOJ Consent Decree (2011-2018) Banned discrimination against OVD Internet traffic.

Prohibits agreements with programmers that limit their ability to provide programming to OVDs.

Requires licensing of NBCU programming to OVDs.

FCC Order has similar provisions.

Comcast-TWC (2015)

◦ Transaction abandoned due to DOJ/FCC concerns.

2015 FCC Open Internet Order

◦ Prohibits blocking or slowing lawful content.

◦ No favoring some traffic over other traffic in exchange for a benefit.

12

Change in consumer viewing habits provides opportunity for OVD entry.

OVD entry is new and experimentation with innovative business models is ongoing.

Antitrust and Regulation both have a role.

13