Boxee, the video-watching computer software, and soon-to-be online video streaming device (can connect to CBS.com, comedy central, MTV and many others), was discussed during today’s NBC/Comcast congressional hearings. NBC was questioned about blocking Boxee users from Hulu content and they expressed that Boxee had the same opportunity to set up a distribution deal as their other partners.  Boxee has casually told me in the past that Hulu would not discuss a distribution deal at the time that they blocked the content.

What are the NBC/Comcast Hearings?

Comcast is trying to buy a controlling share of  NBC/Universal.  Before doing so, it must go in front of Congress and the Senate for approval.  They must approve the merger because Comcast is a distributor of TV shows, movies and internet, and NBC/Universal is a provider of content (movies, music, TV shows, etc.); a company that both makes and distributes content on this scale is problematic. First, Comcast could monopolize the distribution of content so that other providers–satellite providers, local cable companies, etc.–would not have access to their programming.  So, your friend in L.A. can get “Heroes,” but your local cable company wouldn’t be able to show it (or if they did, they might have to charge a premium).  In the U.S., there has been a limit to the number of TV stations that can be owned by one company, so that there is no monopoly.

Why did Boxee come up in the hearings?

The representative questioning Jeff Zucker, President and CEO of NBC, was showing that NBC through Hulu has already shown that they have restricted access to content.  As you’ll read in the transcript or hear in the video here, NBC claims that Boxee was given the opportunity to become a legal distributor but that Boxee had been stealing the content.  Boxee explains that they did not steal the content.

Here’s the C-span video of the hearings.

Here is the transcript:

During the hearing the Chairman of the Subcommittee on Communications, Technology and the Internet, Rep. Rick Boucher, asked Zucker “What about Boxee?”. You can watch the clip here. transcript below:

Rep. Rick Boucher (D-VA): What about Boxee? Mr. Zucker you probably are in a better position to answer that. Did Hulu block the Boxee users from access to the Hulu programs?

Zucker (NBC): This was a decision made by the Hulu management to, uh, what Boxee was doing was illegally taking the content that was on Hulu without any business deal. And, you know, all, all the, we have several distributors, actually many distributors of the Hulu content that we have legal distribution deals with so we don’t preclude distribution deals. What we preclude are those who illegally take that content.

Rep. Rick Boucher (D-VA): “Well would you have negotiations with Boxee upon request?”

Zucker (NBC): “We have always said that we’re open to negotiations.”

Here is Boxee’s response to Zucker’s testimony:

I’d like to set the record straight regarding Boxee’s access to Hulu. Boxee uses a web browser to access Hulu’s content – just like Firefox or Internet Explorer. Boxee users click on a link to Hulu’s website and the video within that page plays. We don’t “take” the video. We don’t copy it. We don’t put ads on top of it. The video and the ads play like they do on other browsers or on Hulu Desktop. And it certainly is legal to do so.

Above, Mr. Zucker says the original decision was made by Hulu’s management. That is correct, but as Jason Kilar (Hulu’s CEO) wrote in his post, the request came from NBC. “Our content providers requested that we turn off access to our content via the Boxee product, and we are respecting their wishes.”

There are now close to a million people using Boxee. When they watch shows from Hulu they are watching the ads and generate real revenues to NBC. We hope we will be able to work with NBC and offer more content and value to Boxee users as we believe a good number of our users will also be willing to pay one-time or subscription fees to access NBC’s content.

Mr. Zucker says they always said they are open to negotiations. That has not been our experience, but at this point, we will take Mr. Zucker’s offer at face value and will contact him. We are eager to work with both Comcast and NBCU to bring more content on more devices to our users. We believe the Internet represents a great opportunity for content owners and we hope that current artificial barriers put on distribution over the Internet will be taken down.