ACA Gives Indies Cred, Clout

Trade Group Marks Two Decades as a Big Voice for Small Cable
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It was a classic case of desperate times demanding desperate measures.

Congress had just passed the Cable Act of 1992, and small, independent cable operators were worried that the new rules significantly affecting the cable industry would have a disproportionate impact on their businesses.

Those concerns prompted a group of 150 small-cable executives in May of 1993 to gather in a crowded ballroom at the Kansas City Airport Hilton to hammer out a strategy for minimizing the new law’s effects. Small cable’s traditional voice, the Community Antenna TV Association, had just been absorbed into the larger National Cable Television Association, so the participants knew they’d need to fend for themselves.

Few industry watchers expected the resulting group — dubbed the Small Cable Business Association — to have much impact, or even to last very long.

Some two decades later, the American Cable Association — gathering this week in Washington, D.C., to mark the milestone at its 20th Annual Summit (March 12-14) — has gone from a group that just wanted to be recognized to one with a seat at almost every negotiating table, ACA president Matt Polka said. It now represents 930 cable and telco members, serving about 7.5 million video, voice and Internet customers.

“ACA members get an amazing bang for their buck,” said Preston Padden, a longtime Washington lobbyist who sparred with the ACA while at such companies as The Walt Disney Co. and News Corp. “It’s a small organization that speaks with a very big voice.”

Admitted Polka: “We can be annoying because we tell it like it is.” As the chasm between small and large operators continues to grow, the need for an outspoken, independent voice is more important than ever, he said.

And that voice is a consistent, effective one that’s important for regulators to hear, said former FCC commissioner Jonathan Adelstein. “Matt and his team are always friendly, approachable and aggressive without being demanding,” he said. “The result is a well-respected trade organization that is effective without being fl ashy.”

ACA’s eight-member staff, led by Polka and vice president of government affairs Ross Lieberman, is small but mighty, said Colleen Abdoulah, president and CEO of WideOpenWest and ACA’s chairman.

“[ACA staffers will] get in a car or climb on a plane for any member who needs help explaining their position,” Abdoulah said. “We don’t have a lot of money to give like the big guys. We spent $500,000 arguing the Comcast- [NBCUniversal] merger; they spent $150 million. But the regulators listened to us.”

The ACA works actively to involve more members in lobbying at the federal, state and local levels, Abdoulah said. It makes sure its members have the information on issues they need to tell their story — and the names of the officials who need to hear it, she said.

“Grassroots momentum is our biggest arsenal,” Abdoulah said.

All grassroots efforts take time to germinate results, as Polka is well aware. “We play for the long term,” he said. “You can’t succeed unless you’re prepared to be there long-term.”

That long game is important to note, because the ACA is still fighting many of the same battles it was formed to wage — including disputes over rising programming costs and retransmission consent.

Indeed, affiliate fees have grown 23% over the past five years, while retransmission-consent fees have risen nearly tenfold and charges for sports networks were up about 42%, according to data from SNL Kagan. That trend doesn’t appear to be letting up anytime soon.

And the ACA gained a big ally in its fight against the wholesale bundling of cable networks by big media firms — including less-viewed networks that systems don’t want to pay to carry — last month, when Cablevision Systems filed an antitrust lawsuit against Viacom over that very practice.

“It’s a problem not just for Cablevision but also for hundreds of small and medium-sized cable operators,” Polka said in a Feb. 26 statement. “If the courts can address this problem, then we believe this would be a good outcome for consumers.”

But though the issues are the same, cable is a very different business than 20 years ago, and the ACA’s membership reflects that. When the group was formed, membership was exclusive to cable operators, with video as their sole business.

Today, ACA members deliver voice, video and high-speed data services and the group counts independent phone companies, not just cable providers, within its membership ranks.

The move to let telcos join the ACA was controversial, but it also makes for a diverse membership that affords the association’s policy views more credibility with regulators, said Bob Gessner, CEO of MCTV in Massillon, Ohio, and an ACA board member.

“Everyone gets to speak their minds in our organization but in the end, the board makes its decisions and everyone generally unifies around that decision,” he said.

Added WOW’s Abdoulah: “Diversity creates a ‘best outcome’ position. It’s all about compromise inside and outside the group. But the goal is to achieve the best outcome for everyone. Regulators and lawmakers respect that.”

Since January, the ACA has filed 19 briefs, letters or testimonials on issues ranging from copyright fees to broadcast ownership rules to program access.

And while video has been small cable’s lifeblood, Polka and the ACA board recognize that broadband will be the cable business’ driving force going forward. One big concern is ensuring that the federal government’s broadband stimulus funds — designed to bring highspeed Internet to unserved communities — aren’t doled out in areas where broadband is already available.

This issue has split ACA’s membership. Many telecom companies have welcomed the broadband subsidies, but the ACA’s position has been that incumbent providers should have the right of first refusal in areas where no existing broadband network is in place and their own networks need an upgrade. The group didn’t want to deny telcos the money, but it did want to make sure the funding was fair and equitable.

Despite all of the ACA’s efforts, the universe of small, independent cable operators continues to contract. According to a study by the National Cable Telecommunications Cooperative, 793 of the co-op’s small and rural cable-system members, representing more than 35,000 customers, have shut down in the past five years. Some 304 small operators switched off between June 30, 2010 and last June 30, the co-op said. (See “Sink or Swim,” Feb. 4, page 8.) Still, Polka believes that the ACA plays a vital role in making sure small and independent operators have the same chance to survive as larger, providers with deeper pockets.

“We have always been concerned about the viability of smaller companies,” Polka said. “We matter and we’re not going away. We have a voice and we’re going to continue to use it to make sure we are heard.”

1993

The Small Cable Business Association is founded as 150 independent cable operators gathered in Kansas City to fight government re-regulation of cable in the 1992 Cable Act.

1996

The SCBA wins rate deregulation of independent cable in the 1996 Telecommunications Act, and de-regulation started in 1994 at the FCC with its small system order.

1999

The SCBA becomes the American Cable Association.

2000

The ACA and the NCTC form a strategic membership alliance.

2003

After intense lobbying by the ACA, the government imposes retransmission consent and regional sports network conditions on the DirecTVNews Corp. merger.

2005

ACA argues for competition in the retransmission-consent marketplace and urges the FCC to allow operators to seek lower-cost alternatives outside local markets when a station demands consideration for carriage.

2006

• NCTC and ACA launch the first Independent Show in Chicago.

• After public hearings in which ACA participated, Pennsylvania lawmakers drop their support of legislation that would have allowed Verizon Communications to bypass the local franchise system and instead obtain a one-sided statewide franchise for cable TV service.

• ACA PAC surpasses $50,000 in contributions.

2008

The ACA takes up the wholesale unbundling issue, arguing that the current marketplace harms independent operators and consumers.

2010

The ACA argues against the Comcast-NBCUniversal merger, saying the deal will hurt consumers and competition.

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