New Twist in OTT: Nonprofit

So you want to provide broadcast video online but not run afoul of retransmission consent rules? Do it as a nonprofit. That's the theory being ...

Speed freaks, rejoice: DOCSIS 3.1 just came another step closer to reality.
Speed freaks, rejoice: DOCSIS 3.1 just came another step closer to reality.
So you want to provide broadcast video online but not run afoul of retransmission consent rules? Do it as a nonprofit.

That's the theory being followed by Telletopia. The company, a 501(c)(4) nonprofit, plans to launch an OTT rebroadcasting service in 2016, carrying all news, sports and primetime programming carried by local TV stations. In an interesting twist, the company says its nonprofit status exempts it from the compulsory license requirements in existing copyright law for retransmitting live broadcast TV.

Just how sound that theory is remains to be seen. Aereo tried a somewhat similar tack a few years ago, albeit not as a nonprofit, and it ended badly - Aereo got the daylights sued out of it and finally lost in the U.S. Supreme Court last June.

Telletopia has been careful to point out that it follows the letter and spirit of copyright law that explicitly permits nonprofits to retransmit local broadcast TV without a compulsory license. The company is also relying on a pending ruling by the FCC to reclassify some online video providers to multichannel video programming distributors (MVPDs), which would let companies such as Telletopia negotiate consent with local broadcasters, just as cable and satellite video providers do. Telletopia says it wants to do so, including paying retransmission licensing fees. The FCC is expected to issue a ruling later this year.

Legal rocks and shoals aside, Telletopia's approach is technologically sensible. The only gear users would need is something connected to the Internet that can play video, such as a tablet, smartphone or computer - no wires or set-tops required. And if the FCC's MVPD ruling goes Telletopia's way, its broadcast partners would benefit as well, especially from the much deeper metrics available for ad performance in an online environment compared to over-the-air.

It'll be interesting to see how this shakes out. But given what happened to Aereo, Telletopia is wise to hedge its bets.

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