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FCC mulls regulating Internet video like cable, satellite TV

Proposed rule change would guarantee that so-called "over-the-top" Net services have access to the same sort of premium programming the other systems enjoy.

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Sony executive Andrew House announces the company's virtual pay-TV service at CES 2014. Sarah Tew/CNET

The Federal Communications Commission is considering rule changes that could guarantee that Internet video providers have the same access to premium programming as cable and satellite TV providers.

FCC Chairman Tom Wheeler proposed rule changes on Tuesday regarding so-called "over-the-top" Internet video services such as those currently under development by Dish Network, Sony and Verizon that would treat them the same as cable and satellite TV providers.

"Consumers have long complained about how their cable service forces them to buy channels they never watch," Wheeler wrote in a blog post Tuesday. "The move of video onto the Internet can do something about that frustration -- but first Internet video services need access to the programs."

The proposal wouldn't apply to on-demand streaming providers like Netflix and Hulu but rather to multichannel video programming distributors (MVPD) that offer prescheduled programming.

"Taking advantage of this rule, new [over the top providers] may offer smaller or specialized packages of video programming, so consumers will be able to mix-and-match to suit their tastes. Aereo recently visited the Commission to make exactly this point -- that updating the definition of an MVPD will provide consumers with new choices," Wheeler wrote. "And perhaps consumers will not be forced to pay for channels they never watch."

The proposal could also provide a firmer legal foundation for shuttered streaming service Aereo, which recently tried to change its licensing model to be recognized as a cable-TV provider. Aereo CEO and founder Chet Kanojia issued a statement Tuesday praising Wheeler's proposal as "an important first step in the right direction for consumers."

"The way people consume television is rapidly changing and our laws and regulations have not kept pace," Kanojia said. "By clarifying these rules, the FCC is taking a real and meaningful step forward for competition in the video market. The FCC recognizes that when competition flourishes, consumers win."

The proposal could give a big boost to the technology and entertainment industries' ambitions for online subscription TV services that deliver popular programming like that delivered by cable companies, but over the Internet. Apple and Google have each been said to be interested in such a service, but they've made no public acknowledgement.

Sony unveiled its plans for an Internet video service at the Consumer Electronics Show in January, saying it would launch a cloud-based TV service this year that combines live television content with on-demand and DVR. Dish soon followed suit by announcing a deal with the Walt Disney Co., owner of such networks as ABC and ESPN, to give Dish the right to stream video, live and on demand, as part of an Internet-delivered television service. Sony announced in September that its coming cloud-based TV service would carry 22 Viacom networks at launch, though when that will occur isn't exactly clear.

CNET's Joan E. Solsman contributed to this report.