The Federal Communications Commission is investigating language in the contracts between pay-TV companies and programmers that hinders the latter from running content online, as the agency considers a mega-merger that could set a new standard for the industry.
The FCC has been speaking with big media firms like Disney, 21st Century Fox and HBO owner Time Warner to discuss clauses in their contracts with cable and satellite carriers that restrict them from peddling programming to Internet providers at the same time, the Wall Street Journal reported, citing industry insiders.
In many cases, the contracts cut the price pay-TV providers must fork over if the programs are also available online, the report added.
The questioning comes as the regulator evaluates a proposed merger between two of the country’s biggest cable providers, Charter and Time Warner.
As it did with the Comcast takeover of NBCUniversal in 2011, the FCC is widely expected to set conditions on Time Warner and Charter’s union if it approves the merger, some of which would limit these clauses.
Several programmers have launched dedicated Internet-based services, such as HBO’s Now and CBS’ All Access apps, but the report suggest that, despite major longstanding technological innovations, television has been slow to migrate online.
Time Warner Cable, 21st Century Fox and Time Warner declined to comment. Disney and Charter did not immediately respond to TheWrap’s messages seeking comment.