FCC Chairman Tom Wheeler may have thrown a lifeline to nascent online video services this afternoon by proposing a rulemaking proceeding to classify them as Multichannel Video Programming Distributors (MVPDs).  “The result of this technical adjustment will be to give MVPDs that use the Internet (or any other method of transmission) the same access to programming owned by cable operators and the same ability to negotiate to carry broadcast TV stations that Congress gave to satellite systems in order to ensure competitive video markets,” he says in a blog post.

The legal definition of an MVPD “should turn on the services that a provider offers, not on how those services reach viewers,” Wheeler added. “Twenty-first century consumers shouldn’t be shackled to rules that only recognize 20th century technology.” But cable systems will continue to be regulated as they are now even if they switch their transmissions to the Internet.

The decision could make life easier for Sony, Dish Network, Verizon, Aereo and others who want to introduce cable-like streaming services. If they are defined as MVPDs, then broadcasters would have to negotiate deals in good faith, and cable providers such as Comcast (which owns NBCUniversal), Time Warner Cable, and Cablevision can’t create “artificial barriers” around the channels they own including news and sports distributed to suppliers over the air.

“Consumers have long complained about how their cable service forces them to buy channels they never watch,” Wheeler says.  “The move of video onto the Internet can do something about that frustration – but first Internet video services need access to the programs.”

Aereo had lobbied for such a ruling and praised Wheeler’s announcement. “By clarifying these rules, the FCC is taking a real and meaningful step forward for competition in the video market,” CEO Chet Kanojia says.

The Writers Guild of America, West also lauded the announcement. “With the largest MVPDs attempting to consolidate their control of content distribution through mergers, this game-changing proposal to allow new competitors is absolutely necessary, it said in a statement.

The National Association of Broadcasters was more reserved. It “welcomes video distribution platforms that legally deliver local TV content to consumers when and where they want it,” the group says. It plans to work with the FCC “to ensure that this new competition enhances rather than undermines localism.”