Policy

Standing Up for the Little Guy

7/23/2012 12:01 AM Eastern

American Cable Association CEO Matt Polka is like a blur in Washington
these days — racing from committee hearing to meeting with
legislators or counseling members. The cable-TV industry is
competitive enough if you’re one of the top five giants, like
Comcast or Time Warner Cable. But for the nation’s independent
operators — literally a dying breed — it’s a struggle for
survival. The ACA represents roughly 900 cable operators,
82% of which have 5,000 subscribers or fewer. Its smallest members
number less than 100 subscribers. Polka, who joined ACA as a volunteer
in 1993 and was named its president and CEO in 2000, carved out
time to discuss its biggest challenges with Multichannel News editor in
chief Mark Robichaux, as the group this week kicks off The Independent
Show, the annual convention it co-hosts with the National Cable Television
Co-operative in Orlando, Fla. An edited transcript follows.

MCN: Do you feel like the ACA and the NCTC are
having an impact in Washington on retransmissionconsent
negotiations with broadcasters?


MP: We do see significant discussion by the key
policy-makers, the lawmakers that have the gavel
and then the key members of the appropriate committees.
And, virtually unanimously, they’re saying
there needs to be review and reform and rewrite.

They all — from Ed Markey to Joe Barton and from
Jay Rockefeller to Jim DeMint — have said the rules
and regulations that govern video today are old and
outdated and need to be updated for today’s market
because the market has changed so significantly.

MCN: You’re talking about a larger rewrite of
telecom law?


MP:
Absolutely. So that includes broadcast-carriage
regulation, that includes other programming issues.

So it is a very broad statement and we’re very
pleased about that because the broadcasters
for years have benefitted from the fact that the
Cable Act and the ’96 Communications Act don’t
have any built-in reviews, like the Satellite Home
Viewer Act — Congress has to review that law
every four or five years and renew it, or else it
sunsets. And that doesn’t happen in cable/video
laws and regulations.

The marketplace has changed significantly
since 1992 and the current laws and regulations
have just simply not kept up for the
benefit of either providers or consumers.

MCN: What do you think
the chances are that something’s
going to get rewritten
in an election year or next year even?

MP: Well, let’s put it this way: I think no matter
who you talk to I think you need to find consensus
here. 2012 is a year, I think, where the committees
have said, “Yes, you know what, we have
to do something about this.”

The process for that rewrite, whatever that
may be, I think will begin in 2013 and there is no
guarantee of how long that takes.

MCN: What are you asking for specifically in
Washington at the moment?


MP:
We are interested in comprehensive reform
that focuses on retransmission consent, network
non duplication, syndicated exclusivity, coordinated
negotiations by broadcasters, bringing to
the committees more information about how
consumers have really no choice today when it
comes to … increasingly expensive sports bundles,
cable programming bundles, etc.

MCN: Why do your
members need legislative
support?

MP: We always suffer big vs. small There’s a
public-policy interest in wanting to help smaller
companies because it benefits our ability to provide
advance services in smaller markets.

MCN: What specifically are you asking for
in the way of restransmission consent and
coordinated negotiations with broadcasters?

MP: We brought this issue to the FCC and we’ve
taken it to the Hill as well. Actually, I think the FCC
has a opportunity to do something about it this year.

We have alleged that it is harmful to consumers
and really a violation of the FCC’s good faith
rules for multiple broadcasters in a marketplace,
two or more, to jointly negotiate retransmission
consent for all of their stations, even though
they are not commonly owned.

We’ve shown that where one station controls
the negotiation for two or more of the big four
networks, that they can significantly and artificially
and harmfully to consumers increase the rates
that they demand because they control more than
one what we call “must have” channels.

And we think that that’s a violation of the goodfaith
rules. We’ve asked the FCC to prohibit that.
And in our efforts going forward with Congress, we
would ask Congress to prohibit that as well.

MCN: What can the ACA ask Congress to do
about sports costs?

MP: I think the most practical thing that can occur
right now is for lawmakers to call those responsible
to the table and ask them what the heck is going on.
Why are consumers required to pay for all of this programming,
particularly sports, which has been demonstrated
to be the highest cost to consumers, and
not have any choice about it whatsoever? Why am I
paying for all this when I might be a casual observer?

It actually gives us a great entrée into the whole issue of bundling, because
it’s not just sports bundling,
but it’s also other
cable bundling.

MCN: Are you pushing
for a la carte though?

MP: No, we’re not advocating
for that. We haven’t suggested anything
here today or as it goes forward other than scrutiny
and transparency. That has to be the first step
in what I think will be a longer-term process.

MCN Are your members technologically prepared
for the next five years?

MP: For the smaller providers, the technology
trickles down, so to speak, and how things get
rolled out with the larger companies and then that
becomes more available for the smaller operator as
time goes and scalability occurs.

People expect broadband and that’s going to be
central. So if you look at systems that have a future
and systems that are gonna have a hard time,
broadband I think is going to be the defining factor.

MCN: What are you asking for on emergency alert?

MP: Emergency alert underscores why our association
essentially exists as an independent
voice for smaller and rural providers, independent
providers. Cost of technology, the cost of
what are mandates of regulation, which has, as
always, a much greater, disproportionate impact
and cost on our members because we have fewer
subscribers per mile than the larger companies.

Our issue there has been as always one of cost
of compliance and encouraging and urging the
FCC to be flexible and sympathetic to our members
that file what are legitimate hardship waiver
requests until such time as internet becomes
much more ubiquitous in remote areas.

MCN: If Aereo, which provides over-the-air TV
signals via broadband to mobile devices, ultimately
wins in court, what would the repercussions be for
the cable TV industry and retransmission consent?


MP: I don’t see it as a bad thing. I think that technological
innovation is good. It’s gonna happen.
We in industry have to get with the program and
understand that we need to be as involved in technological
innovation as those companies that may
be perceived to be potential competitors.

For all I know at this point, you know, a company
like Aereo or others may be a partner of our
members in years to come, where our members
can partner with a company like Aereo for the delivery
of free over-the-air broadcast signals, which
is what Congress intended to begin with, and still
remind broadcasters that’s your obligation.

You weren’t given a God-given right to extract
retransmission consent from consumers, but
rather you were told that you have to provide
free over-the-air signals to all consumers,
because that’s why you got the spectrum for
nothing. That’s the deal.

And so, if through technological innovation
we can provide those services to our customers
for free as intended by Congress, then yeah,
I think that will change the retransmissionconsent
dynamic and it darn well should.

March