Virtual Reality The famous Brazilian soccer player was shown getting a new pair of shoes and putting them on. He then proceeded to test them out by aiming and hitting the soccer goal crossbar not once, but four times in a row. The ball just bounced right back to him and he kicked it again. That’s like a field goal kicker aiming for and hitting the upright intentionally four times. Trouble is, it didn’t really happen, even though the video of that feat (no pun intended) spread all over the internet. It was a digitally manipulated video clip created by Nike, and intentionally designed to take advantage of the "virtual" world of viral marketing on the net. It’s getting harder and harder to tell what’s "real" these days. Pictures of missile strikes in Beirut are digitally altered to make them look bigger, videos are spread around the net with no way to tell whether they are actually recording an event or are computer creations. And now we even have "virtual" companies claiming they have the same rights as real ones! The interesting part of this story is that the company in question has even called itself "virtual." The company? VDC. Virtual Digital Cable. Apparently it’s a group started to try to aggregate programming and resell it by subscription on the Web. The group claims it’s going to offer "television everywhere" by streaming it over the Internet. The subscription costs $11.95 a month for their lineup of channels. And that’s where the problems begin. You see, VDC, which just incorporated earlier this year, is already complaining that programmers are refusing to allow it to resell their channels. Most, after all, already have their own Web sites. Press releases went out last week informing us that VDC intended to file a complaint against C-SPAN at the FCC for violating the "Multichannel Video Program Distributor" (MVPD) rules by refusing to negotiate with VDC. Now there are a few problems with all this. First, apparently C-SPAN has been talking to the VDC folks, so claims in the press to the contrary just turn out to be false. Also, C-SPAN is already streaming all its programming on the Web for free! But more importantly, what the heck is VDC? Are they really a MVPD in the sense the Commission intended? The MVPD rules were designed to promote construction of facilities-based distributors such as additional cable systems, telco video delivery, satellite distributors and the like. But VDC, by it’s own name, acknowledges that it isn’t really any of those things… it’s a virtual cable distribution company. Yet this virtual company wants to take advantage of rules designed to promote real, infrastructure-based competitors. Of course, the MVPD rules only apply to programming of companies vertically owned and controlled by cable operators. That’s the only jurisdiction the FCC even might have, although I think it now could be challenged. They certainly don’t have the power to commoditize all programming. But leaving that aside, what’s the purpose of allowing a "virtual" company to benefit from these rules? If VDC is considered eligible for the MVPD rules, why not AOL when they were charging subscription fees? Is Google next, or anyone who starts a "virtual" business on the Web to aggregate video? Is any programming owned by cable operators (but not others!) now a commodity? If that’s the case, it will be interesting to hear the real—not virtual—legal rationale. That case would be heard in a real—not a virtual—court.

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