ACA to FCC: Cable's Set-Top Plan Isn't for Smaller Ops

Says "ditch the box" would be too expensive to implement

Smaller cable operators have told the FCC they should not be subject to either the FCC's proposed "unlock the box" set-top rules or the National Cable & Telecommunications Association's apps-centric "ditch the box" alternative.

The NCTA's proposal said its regime should not apply to operators with fewer than 1 million subs -- the NCTA's membership includes some of those, too -- and the ACA, which represents small and mid-sized operators, said it is fine with that.

It also continued to argue that smaller MVPDs should not be subject to the commission's proposal because they are already offering innovation and choice, compliance costs would not be offset by revenues and because their participation is not necessary for the FCC proposal to succeed.

In meetings with top FCC staffers, American Cable Association execs said smaller operators have little margins on set-tops, so no incentive in limiting access to alternative navigation devices.

The ACA pointed to the "unprecedented" costs the "ditch the box" proposal would incur, including deploying IPTV infrastructure, developing the HTML 5-based app, upgrading plant in many cases to ensure sufficient bandwidth, and more And given that the app would be free to customers, recovering those costs would be tough for smaller operators.

The ACA estimates the compliance costs at $2 million per system compared with the "over $1 million" it estimates for complying with the FCC's "unlock the box" plan.

The group is proposing a Jack Spratt and spouse approach, telling the FCC officials, "ACA believes that by delivering the choice of app-based access to pay TV content to most U.S. homes, development of the 'App' solution by large MVPDs will complement the innovations that smaller MVPDs are offering their customers."

It also pointed out that with DBS providers participating in ditch the box, there would be alternatives in pay TV navigation options in markets large and small.