Last month Virtual Digital Cable, a Northbrook Illinois-based startup, filed a complaint with the FCC which alleged that CBS' Chicago owned-and-operated affiliate WBBM refused to negotiate a carriage deal in violation of the legal requirement to bargain in good faith with multichannel-video-programming distributors. VDS has been streaming a few dozen programming services on the Internet with a goal of reaching areas with more computers than TVs.
CBS countered that the requirement wasn't violated because it stipulates that bargaining rights are guaranteed to providers offering 'video programming' within the meaning of federal law. They argue that according to the law, the programming must be the equivalent in quality to broadcast television, and that the streaming video offered by VDC does not meet that standard.
CBS also said that in order to be legally obligated to negotiate, a company must provide “video programming” and make available “channels of programming” as defined by federal law. The FCC has stated that in order to provide channels of programming, a provider must own facilities reaching the end-user. The network pointed out that VDC only reaches viewers’ computer monitors through a DSL or cable Internet connection that belongs to another entity.
Another issue brought up by CBS is the security of the retransmission by VDC. The network maintains that their programming would be exposed to copyright infringement, as CBS does not own the copyrights to all the programming it airs.
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