Broadband Regulation Could Crimp Cablers, ACA Lawyer Says At Forum
Lobby Group Frets Over Impact Of Agency's Reported Crackdown On Comcast
By Linda Moss -- Multichannel News, 7/28/2008 4:00:00 PM
Orlando, Fla. – The “rejuvenation” that independent cable operators have enjoyed by expanding into broadband service could be impacted by possible federal regulation, a lawyer for the American Cable Association warned Monday.
During an update on the ACA’s lobbying activities at The Independent Show conference here, outside counsel Chris Cinnamon made reference to a story in The Wall Street Journal that morning that reported that the Federal Communications Commission this week will find that Comcast “wrongly” slowed down some of its subscribers’ Internet traffic, by preventing customers from sharing video files online through services such as BitTorrent. Multichannelnews.com, too, reported the expected action on Friday.
Comcast denies violating any federal policy and says it was acting reasonably.
Although Cinnamon said he didn’t want to prejudge any FCC decision on “network management” without seeing it, he and others fear it could set a difficult precedent regarding how cable operators can make a business from their broadband service.
Cinnamon said to date there’s been very little regulation of broadband.
“Because of that decision to maintain only a light regulatory touch on broadband service, it has opened up whole new opportunities for small and medium-sized cable businesses to roll out broadband at lower costs without the weight and cost and burdens of regulation,” he said.
Small cable operators, particularly in rural areas, have built a nice ancillary revenue stream offering broadband service in addition to video.
Broadband “has been a key component of the rejuvenation of the sector and the vitality that has brought us forward to a day like today, where we have a record number of attendees at The Independent Show,” Cinnamon said. “But that might change.”
He noted that Comcast has defended its network-management practices, and told his small-operator audience, “I know some of your networks also use some of those management practices.”
The ACA is keeping an eye on the situation, Cinnamon said.
During the ACA’s afternoon session, the group also talked about its past efforts this year regarding retransmission consent.
ACA president Matt Polka and the group’s vice president of government affairs, Ross Lieberman, both described The Walt Disney Co.’s decision to give free carriage of its 10 owned-and-operated ABC stations to small cable operators as an “admission” that retransmission-consent disproportionately impacts small operators.
Polka called it only “a trickle of relief,” while Lieberman said it only affects 90 small operators.
At the end of the update during a question-and answer session, Gary Tilley of West Carolina Communications in Abbeville, S.C., described being pressured by a TV station group to sign a retransmission-consent deal for small operators by Aug. 1 or risk a less favorable deal.
Cinnamon quipped that this was the broadcaster’s “early bird special.”
Tilley also asked whether small operators should band together to craft retransmission-consent agreements with broadcasters.
“Certainly, collective negotiations are beneficial,” Polka said, adding that the ACA supports that “whole heartedly.”
In fact, at the show the National Cable Television Cooperative has been discussing and weighing whether it should negotiate retransmission-consent deals with some broadcast groups for its members, according to NCTC president Jeff Abbas.
“It’s something we have to look at,” he said.
NCTC members are more open to that option now that broadcasters have become aggressive about seeking cash for carriage of their stations, according to Abbas.
Cinnamon also talked about the ACA’s efforts to keep the so-called News-Hughes restrictions on News Corp. even thought it sold its stake in DirecTV to Liberty Media.
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