• Focus On Digital Transition, Retransmission Consent, Tying and Bundling
  Record Attendance At Orlando Show

More than twelve hundred people from around the country attended the third annual Independent Cable Show in Orlando, Florida last week, a 21% increase from last year. Representing more than 155 independent cable operating companies, they took part in the three-day educational summit, hosted by the American Cable Association and the National Cable Television Cooperative, which was focused on providing operators with the information and tools they will need to face the challenge of the 2009 DTV transition and the ongoing negotiation of retransmission consent agreements between operators and broadcasters.

“This year’s show was the most important and most successful we have hosted to date,” said ACA President and CEO Matthew M. Polka. “The independent cable industry will face a number of challenges in the coming months and we hope this year’s show and the support ACA and NCTC will provide individual operators with the tools they need to meet those challenges head on. For our part, ACA will continue to work with the FCC and Congress to level the playing field for smaller operators and ensure a smooth digital transition in February.”

• ACA Cites Conflicting Claims By Fox Parent
  News Corp. Blatantly Manipulates FCC’s Process

The American Cable Association has formally filed in opposition of an ongoing effort by News Corp. to change the conditions imposed by the FCC, by the Order permitting the acquisition of satellite provider DirecTV. News Corp., which sold its holdings in DirecTV in 2008, now claims the conditions should no longer apply and has filed a petition of modification with the FCC. The terms of the Order are not set to expire until 2010.

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• Mediacom's Pardini Testifies
  ACA Rep Before House Small Business Hearing

Testifying before a House Small Business Subcommittee on behalf of the American Cable Association on May 7, Edward S. Pardini, senior vice president of operations for the North Central Division of Mediacom Communications, urged Congress to put an end to discriminatory practices of broadcasters against independent operators and to ensure uninterrupted cable service to customers. The hearing, held in the Subcommittee on Contracting and Technology of the House Small Business Committee, focused on the role small businesses will play in the upcoming Digital Television transition — scheduled for February of 2009. During his testimony, Pardini cautioned the committee about the potential confusion and disruption of service that may be caused by retransmission consent negotiations between broadcasters and operators scheduled for roughly the same time as the 2009 transition.

“ACA and its members, including Mediacom, are committed to ensuring our subscribers can continue to view broadcast stations after the transition,” said Pardini. “To ensure the switch is a success, we have invested tens of millions of dollars to purchase the necessary equipment and launch consumer education programs in the communities we serve. Unfortunately, that time and money cannot address the larger threat looming over independent operators and their subscribers. The common practice of forcing operators to drop a broadcast signal during retransmission consent negotiations will unquestionably and unnecessarily trigger consumer confusion and disruptions in service at the worst possible time. To put an end to this and other discriminatory practices, and ensure the uninterrupted service of our subscribers during the transition, we encourage this Committee to conduct a further review of these issues.”

• Farm Bill Will Fix Some Of The RUS Loan Program’s Major Flaws

Final passage of the Farm Bill by the United States Congress marks a significant step forward for the deployment of affordable broadband service to rural America. The American Cable Association applauded the long-delayed passage of this much needed legislation and issued the following statement:

“The unacceptable division separating rural communities without broadband access from those cities and towns with it must be closed,” said ACA chief Matt Polka. “This bill has traveled a long road, but our hope is that it will have been worth the wait for the unserved communities throughout the country that will benefit from the increased funds and refocused attention of the broadband deployment effort.”

The Farm Bill includes provisions that reform the Rural Utilities Service’s (RUS) Rural Broadband Access Loan and Loan Guarantee Program to ensure that loans are provided to entities that seek to provide service to areas most in need of broadband deployment. The Bill was passed by the United States Senate May 15 by a vote of 81 to 15, and by the House of Representatives May 14, by a vote of 318 to 106.

• Lifetime’s Outrageous Behavior Draws ACA Ire

Citing the story of an independent cable provider in New York State as further evidence of egregious market abuse by certain programmers, the American Cable Association on May 19 urged the FCC to address the broken wholesale marketplace. In a letter to FCC Chairman Kevin Martin by ACA chief Matt Polka, the association pointed to Lifetime Entertainment Services’ forced removal of Lifetime from CableCom of Willsboro, a small cable operator offering video and broadband services to fewer than 1,100 subscribers in Willsboro and Essex, New York. Lifetime pulled the channel after CableCom refused to carry more channels and pay higher fees.

“The market is not working for small operators and their customers, and the Commission must address the programmers’ market abuses as part of the ongoing Program Tying Rulemaking,” added Polka. “‘Take it or leave it’ tying arrangements and withdrawal of programming force more cost and unwanted content onto consumers and run counter to the public interest.”

Lifetime delivered a “take it or leave it” contract that required the small cable operator to add the Lifetime Movie Network to its expanded basic tier in order to continue carrying Lifetime Television, along with the threat to discontinue service in an April 8th, 2008 letter.

• ACA Sees Blatant Discrimination
  Smaller, Independent Cable To FCC: Put Consumers First

In comments filed with the Federal Communications Commission last month, the American Cable Association urged the Commission to address blatant price and program-tying discrimination from the broadcast and programming conglomerates against consumers and smaller, independent cable operators by making moderate changes to the FCC’s retransmission consent and program access regulations.

ACA’s comments provide the FCC with hard evidence that demonstrates how current programming and retransmission consent practices cause significant harm to the public interest in markets served by small and medium-sized cable providers through reduced programming choice, higher prices for consumers, and reduced video competition. For example, broadcasters charge smaller cable operators retransmission consent fees as much as twenty times more than what the largest distributors pay.

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• ACA Supports Six Networks’ Suit Against FCC
  Dual-Carriage Requirements Will Hurt Consumers:
  Rules Could Force Some Networks Off The Air

The American Cable Association voiced its support on February 7, for six cable programmers that filed suit against the Federal Communications Commission’s “dual-must-carry” rule on the grounds that it is a first amendment violation. ACA also urged the FCC to approve an exemption for small and often rural operators with limited cable system capacity and a small subscriber base.

“The ACA supports the efforts of C-SPAN, Discovery Communications and others that are contesting the legality of ‘dual-must-carry’ rules,” said Matthew M. Polka, ACA president and CEO. “These rules place a tremendous burden on independent cable operators and may in some cases force programmers off of the system, and in other cases prevent an operator from carrying new channels on cable systems with limited system capacity. The FCC should not pick and choose which stations are available and which are expendable. Customers and their communities will end up as the unintended casualties of this regulation.

• ACA Celebrates 15 Years Fighting for Independent Cable

The American Cable Association this year will proudly celebrate 15 years of representing independent cable operators throughout America. Since 1993, the ACA has represented small- and medium-sized operators before the U.S. Congress, FCC and other federal agencies. After 15 years, the ACA now represents more than 1,100 independent operators serving more than 7 million subscribers in mostly rural markets across the U.S. Operating in an environment that continues to favor big over small, ACA’s mission is as clear and its resolve as strong as ever.

This year’s commemoration, themed, “15 Years Fighting for Independents,” will include a series of activities throughout 2008 to honor ACA members and their achievements. ACA recently released a commemorative edition of the ACA 2008 Industry Planner and Directory and launched an online gallery of photos and milestones reflecting the organization’s rich history and work on behalf of independent operators. In addition, ACA kicks off its 15th Annual Summit on April 7 with a special evening anniversary celebration at the Mellon Auditorium in Washington.

• ICN’s Annual Survey —
  Independent Operators Rank The Cable Networks

Nearly 80 percent of cable networks have had no personal contact with smaller MSOs and independent cable operators within the past 12 months — and those same operators have never had personal contact from 32 percent of cable channels. Even more than being largely ignored by most networks, smaller operators clearly object to the pricing forced on them by some programmers, especially some “must have” channels like ESPN and Fox Sports. Those are among the results from ICN’s latest Cable Network Evaluation Survey of independent operators and smaller MSOs, which includes rankings of 127 basic cable networks. Its charts, tables and text cover:

• The Most-Carried cable networks
• Rating Each Network’s Pricing
• Channels you’d like to add
• Digital v. Analog Systems
• Which networks keep in touch?
• Best & Worst networks to work with
• How many sell local advertising?
• High-Speed Data Penetration

Again this year, while most smaller operators report being largely ignored by most cable networks, the great majority of these operators have channels open currently, and many others plan to add digital cable service or otherwise expand their plant bandwidth.

Over 64 percent of operators plan to add cable networks to their service within 12 months. So there are, in fact, a lot of opportunities for cable networks among smaller MSOs and independent system operators.

Click on the PDF icon at right to read or print the entire survey

Click on the icon at right to download free Acrobat Reader software

• A Major Achievement For ACA
  FCC Considers Banning Network Retrans Tying

The ACA achieved a major milestone last month when the FCC issued a Notice of Proposed Rulemaking seeking comment on revisions to the Commission’s program access and retransmission consent rules and whether it may be appropriate to preclude the practice of programmers to tie desired programming with undesired programming. ACA chief Matt Polka issued the following statement in response: “The American Cable Association applauds the Federal Communications Commission for launching this inquiry into the unfair practices of broadcasters and programmers during carriage negotiations, and acknowledging that small cable operators are vulnerable to such the demands of stations and networks because they do not have leverage due to their smaller subscriber bases.

“In the five years since ACA filed its Petition for Inquiry, broadcasters and programmers continue to muscle unreasonable prices, terms, and conditions out of small, independent cable operators – raising the costs and limiting the choices of consumers. We look forward to putting the facts on the record in this matter.”

The Commission’s inquiry reflects a major achievement for ACA, to see the most difficult FCC small operators have had to endure recognize the key concerns that ACA alone has been pushing. While the motives of the Chairman in pursuing this rulemaking may be uncertain, and while there is still a very long way to go from release of the rulemaking to the final order, there is no doubt that this rulemaking provides a major opportunity for small cable operators to finally make progress in this crucial battle. The FCC’s action will also help to bolster ACA’s work in Congress by legitimizing issues ACA has been pressing on the Hill for some time.

• Progress Made On Internet Tax Bill

Both houses of Congress have recently approved legislation to extend the moratorium on Internet taxes. American Cable Association President and CEO Matthew M. Polka issued the following statement regarding the markup of the Internet Tax Freedom Act of 2007 in the House Judiciary Committee: “Small cable operators are deploying broadband across the country, despite the financial hurdles of offering such services in smaller markets and rural areas. Yesterday’s action in the House Judiciary Committee is an important step toward safeguarding these investments and ensuring high-speed Internet access remains affordable for consumers. The Internet tax moratorium is set to expire on November 1, 2007, and the ACA urges Congress to extend the ban on state and local taxes on broadband access before this time.

• Brookstein, Bruder Join ACA Executive Committee

American Cable Association’s Board of Directors has conducted an election to fill two at-large positions on the organization’s Executive Committee. Steve Brookstein, EVP of operations of Bresnan Communications, and James Bruder, president and COO of Harron Communications, were elected to serve one-year terms effective immediately. Brookstein and Bruder join four existing Executive Committee members: Chairman Patrick Knorr of Sunflower Broadband, Vice Chair David Keefe of Atlantic Broadband, Treasurer Steve Freidman of Wave Broadband, and Ex Officio Chair Steve Weed of Wave Broadband.

• Longtime ACA Director Norm Mills Passes

ACA’s longest-serving Board Member and Board Member Emeritus, Norm Mills of Colstrip Cable TV in Billings, Montana, passed away October 8, after a long battle with a heart condition. He was one of the founding members of ACA in May 1993, when the association was formed as the Small Cable Business Association. Said association CEO Matt Polka, “Norman was a tireless and driving force in our Association, showing by his frequent trips to Washington from Montana the importance of personal connection with his elected officials. He is the recipient of ACA’s Eagle Award, signifying his lifelong contributions not only to independent cable, but also to the entire cable industry... He is and always will be an inspiration to us, and his drive and determination will continue to propel us.”

• NCTA Backs Small Ops Exemption

In testimony before the U.S. Senate Commerce Committee, NCTA chief Kyle McSlarrow urged the FCC to approve an exemption that relieves small cable operators and low capacity cable systems from a mandatory broadcast signal dual carriage order that the FCC adopted in September. McSlarrow said that the FCC’s order mirrors the three-year voluntary carriage commitment that NCTA proposed, but he called it “deficient” in one major respect – considering the special circumstances of small operators and low capacity systems. McSlarrow said the Senate Commerce Committee in 2006 on a bipartisan basis approved this type of exemption, but the legislation never proceeded to the Senate floor, and the recent FCC order, “largely punts this question to a further notice of rulemaking.”

“The FCC did include a process whereby operators with systems of 552 MHz or less of capacity could apply for waivers, but given the FCC’s poor record on waiver requests in other contexts, this is little more than window dressing and unnecessarily burdensome,” the testimony said. “The FCC should act now to approve a simple exemption that takes into account the circumstances of small operators and low capacity systems,” McSlarrow said.

• Attendence Tops 1000
  The Independent Show Draws A Crowd In Monterey

Monterey, California welcomed NCTC and ACA members with cool breezes and hazy days, but The Independent Show proved to be a clear hit with members. 1,001 members, programmers, vendors and family members attended the second Independent Show, which features an integrated agenda of business and political panel presentations.

One of the key presentations this year almost didn’t happen. FCC Commissioner Jonathan Adelstein, who had committed in person early in 2007 to both ACA President and CEO Matt Polka and NCTC President and CEO Jeff Abbas that he would speak in Monterey, was forced to cancel his appearance just days before the conference. FCC Chairman Kevin Martin had scheduled a last-minute hearing that conflicted with The Independent Show, so Adelstein was forced to back out of his commitment.

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• PBS, APTS And ACA Finalize Digital Carriage Agreement

The Association of Public Television Stations (APTS) and the Public Broadcasting Service (PBS) finalized a major digital cable carriage agreement with the American Cable Association, the organizations announced on August 8. “The agreement assures that millions more Americans will have access to the rich diversity of high quality, non-commercial digital and high-definition television programming for the foreseeable future,” said APTS President and CEO John Lawson. “I’d like to thank Matt Polka for his leadership in reaching this important agreement on behalf of his membership and the customers they serve.”

The deal is expected to be ratified and adopted by members of the ACA and Public Television stations by mid-October.

“I congratulate ACA, APTS and PBS for this historic carriage agreement,” said FCC Commissioner Jonathan Adelstein. “Families, particularly parents and children in small towns and rural areas, will now get to enjoy the benefits of Public Television’s multiple streams of quality, first-rate programming. ...”

The 10-year agreement would apply to participating ACA members’ high-definition systems and include DTV carriage commitments of PBS stations both pre- and post-digital transition. Under the agreement, operators would carry the primary signal of the DTV station on the lowest priced tier, while multicast channels would be carried on the tier where other multicast channels are carried.

• ACA Tells Commission
  Reject Verizon’s Audacious MDU Rule Proposal

The American Cable Association filed reply comments with the FCC on August 1, reiterating its position that the Commission should not void cable operators’ existing exclusive MDU agreements, particularly for small and medium-sized cable operators. ACA said small and rural markets served by ACA’s members are already intensely competitive. “ACA’s members lack market power in their service areas and have had to make significant investments to compete for potential MDU customers. ACA’s members – more than half of which serve fewer than 1,000 subscribers – should not have their investments wiped out by the Commission...”

ACA added that the Commission should oppose Verizon’s audacious request that “the Commission toss out existing exclusive MDU agreements – but only until five years after a ‘new provider’ (presumably, Verizon) has chosen to enter and wield its market power in a franchise area. Five years after Verizon enters a market, the prohibition would sunset, and Verizon would then be free to further entrench its market power through exclusive agreements.

“If the Commission promulgates a rule similar to that requested by Verizon, it should exempt small and medium-sized cable operators,” ACA said. “Many small and medium-sized cable operators cannot remain competitive if their investments are wiped out and they are forced to compete from a weakened position with their larger and better-financed rivals – like the $120 billion behemoth that is Verizon.”

• Immense Disparity in Economic Power Cited
  ACA Says Conditions Needed In Liberty Media/DirecTV Merger

In comments filed on March 14, the American Cable Association asked the Federal Communications Commission to impose conditions on the pending Liberty Media/DirecTV merger to protect consumers served by smaller, independent cable companies in smaller markets and rural areas. “Here, we face yet another proposed combination aligning the market power of ‘must have’ channels with the market power of the one of the nation’s top MVPDs,” said ACA in the opening line of its comments.

“ACA members share a vital interest in this proceeding. All ACA members currently transact with Liberty- and DHC-controlled (Discovery) companies for satellite programming. All ACA members face DirecTV as their principal competitor,” ACA continued. “The anticompetitive potential of the proposed combination and the immense disparity in economic power between Liberty/DirecTV and ACA members place small and medium-sized cable companies and the consumers they serve at serious risk.”

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• FCC Releases Cable Franchise Order

The Federal Communications Commission on March 5 released a previously adopted order that gives local governments 90 days to reject or approve cable franchises sought by telcos that already have facilities in city-controlled rights of way. The FCC’s decision to impose a deadline was designed to provide a measure of certainty to AT&T and Verizon as the two largest phone companies invest billions of dollars in an effort to break into local video markets.

• NTIA Releases Final HDTV Converter Program

On March 12, The National Telecommunications & Information Administration announced the final rule for the Digital-to-Analog Converter Box Coupon program. All American households desiring converter boxes may apply for up to two $40 coupons. Congress directed the NTIA, which is the President's advisor on communications policy within the U.S. Department of Commerce, to administer a coupon program, which will subsidize the cost of converter boxes expected to be sold by retailers. NTIA has concluded that all U.S. households will be eligible to participate in the program, participating manufacturers must have boxes certified as meeting certain criteria before they will be deemed eligible for purchase, and consumers will be able to purchase eligible converter boxes at certified store-front and online consumer electronics retailers.

• Gleason, DeMond Among ‘07 Pioneer Inductees

The Cable TV Pioneers have selected 18 new members for 2007, to be inducted May 7 at the Pioneers’ banquet at The Cable Show in Las Vegas. Inductees are selected by the Pioneers’ Executive Committee, from nominations submitted and endorsed by at least two current members, and must have worked for at least 20 years in the industry. This year’s class is comprised of:

• Jeffrey DeMond, Bresnan Communications president and CFO
• Michael Doyle, president, Comcast Eastern division
• Bradley Dusto, president, Comcast West division
• Michael Egan, founder and executive vice president, Renaissance Media
• Debby Exon, HBO area account mgr
• Glen Friedman, Ideas & Solutions president and founder
• Lindsay Gardner, outgoing president, affiliate sales, Fox Cable Networks
• James Gleason, New Wave Communications president and CEO
• Bill Goetz, Time Warner Cable executive VP
• Bob Gold, president and owner, Bob Gold & Associates
• Robert Halgas, RCH Outsourcing Services CEO
• Ivan Johnson, VP of community relations, Cox Communications
• Charles, Edward, and Robert McGinty, builders of Atlantic Coast Cable
• Neil McHugh, CEO, Vista III Media
• Steve Necessary, Cox VP of video-product development
• Larry Oliver, VP and general manger, Reed Television Group