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January 04, 2008

ACA Urges FCC to Adopt New Rules to Benefit Small and Medium-Sized Cable Operators

By Susan J. Campbell, TMCnet Contributing Editor

The American Cable Association (ACA) has urged the Federal Communications Commission (FCC (News - Alert)) to adopt new rules that would allow small and medium-sized cable operators the flexibility necessary to provide consumers with more choices and better value.




The ACA represents 1,100 cable operators serving more than 8 million consumers. The organization’s comments came as part of the current FCC review of retransmission consent and programming tying arrangements.

"When broadcasters use federal retransmission consent rules to deny choice and raise costs, it's the consumer that pays the price," said Matthew M. Polka, president and CEO of ACA, in a Friday statement.

"Likewise, it runs contrary to the public interest when programmers leverage their market power in carriage negotiations to force all consumers to take and pay for high-cost and niche programming to receive popular program channels. ACA appreciates the opportunity to suggest reforms that would help mitigate the harms caused by current wholesale programming and broadcasting practices.”

“The issues of program carriage and retransmission consent are intricately linked to the flexibility that cable operators have in providing greater channel choice and value to consumers. Now is the time for the FCC to take action and ensure that a truly competitive video programming market will serve as a catalyst for consumer benefits, more diverse programming, and the deployment of broadband services in the digital age," Polka added.

The ACA is arguing that their comments provide evidence that current programming and retransmission consent practices cause significant harm to the public interest in markets served by small and medium-sized cable providers.

This harm, according to the ACA, is caused through:

-- Reduced programming choice
-- Higher prices for consumers
-- Reduced video competition
-- Impeded broadband deployment


In its filing, the ACA is seeking adjustments to program access and retransmission consent regulations, including the following:

-- Beyond potential bundling arrangements, programmers and broadcasters would be obligated to offer channels on a standalone basis on reasonable rates, terms and conditions;

-- Programmers and broadcasters would be prohibited from mandating channel carriage on a specific tier or to a required percentage of subscribers;

-- Prohibiting price discrimination against small and medium-sized cable companies to ensure that price differences are truly cost-based; and,

-- Adjusting the program access and retransmission consent complaint processes to provide for meaningful relief, including continued carriage of a channel while a complaint is pending.

"ACA supports moderate, but meaningful changes in wholesale programming and retransmission consent practices," explained Polka. "We do not want to disrupt the programming chain, but simply want the Commission to constrain programmers and broadcasters from using their market power to deny more choices to our customers."

The ACA is making these claims and urging the FCC to act as these small and medium-sized cable operators are feeling the competitive crunch from large and giant providers that have the resources to stomp out their market share.
 
The organization is right in arguing that the current structures are harmful to consumers as we want choices that are realistically competitive. It will be interesting to watch this play out over time as the wars between the giant players and the smaller cable companies are likely to intensify.
 
Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.
 
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