On NCTA’s Tricky Balancing Act

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Item: Multichannel News reports the National Cable & Telecommunications Association endorsed a proposal that would have made basic-cable networks subject to federal rules barring “indecent” content on broadcast channels.

That story, in our Nov. 28 edition, got me to thinking about a private conversation I had months ago with a top executive at one of the biggest ad-supported networks about the inherent tensions in a trade group — the NCTA — that represents the interests of both cable distributors and programmers. Those interests aren’t always in sync, except to the extent programmers supporting their biggest distributors benefits both.

Having NCTA back a scheme that likely would subject the programmers — not the distributors — to increasingly costly fines for airing objectionable language or images doesn’t seem to be in the programmers’ best interests. Unless it would help avert even more disruptive remedies, like what Federal Communications Commission chairman Kevin Martin says he favors: letting indecency-averse consumers buy whatever channel they want separately and discarding those they don’t want.

The NCTA obtained a consensus among its constituents, our magazine reported, including programmers. And one programmer — The Walt Disney Co., which owns ESPN and Disney Channel — led the charge. So maybe the interests were aligned, although I’m also told the consensus actually fell apart over objections by MTV: Music Television parent Viacom Inc. and FX parent News Corp.

At any rate, folks I spoke with last week at various networks and current and former cable trade-group executives said the conjoined issues of indecency regulation, a la carte programming mandates and the creation of “family tiers” that would break up expanded-basic groupings has divided the NCTA’s distribution and programming camps as much as any issue since Congress, in the 1992 Cable Act, required that competing distributors be given access to “cable” programming.

Item: The NCTA says it will hand off sponsorship of the cable-network portion of the Television Critics Association programming expo to the Cable & Telecommunications Association for Marketing.

OK, I thought, at least hosting the TCA was something that was purely in the interests of cable programmers. Surely this was another indication the NCTA just doesn’t do that much for the networks that are, after all, the entities that provide what consumers want most from cable.

The NCTA’s ceding ownership of that event does make sense, though, given the policy challenges facing cable companies these days and its need to focus on them. NCTA chief Kyle McSlarrow even made a presentation at a media investors’ conference last week, an indication of how serious the current policy issues are. (He advocated voluntary solutions that distributors and programmers could craft together.)

Item: Shaw Communications Inc., the second-biggest cable provider in Canada, last week declared it was resigning from the Canadian Cable Telecommunications Association, saying “member companies of the CCTA have divergent interests and differing strategic objectives making it difficult to build industry-wide consensus on various issues.”

Well, there you go: A cable-industry organization can fracture — and over exactly the kind of discord potentially occurring within the omnibus cable trade group in this country.

Except the CCTA represents the distributors, not the distributors and the programmers. And, according to analysts in Canada, Shaw’s decision appears to be more financial than strategic. Greg O’Brien, editor of CableCaster magazine north of the lower 48, estimates Shaw’s dues amounted to about $2 million per year, adding that Shaw has declined to expand much on the divergent interests.

Finances would be an issue for programmers breaking out here, as well. A separate cable-programming trade group would need to hire a big-name lobbyist — who wouldn’t come cheap — in addition to the Washington overhead many programming entities already maintain on their own.

The biggest reason why a split probably won’t happen is the most obvious. Cable distributors remain programmers’ biggest customers, and that’s enough to hold the group together. Programmers big enough to do so have always pursued what’s in their best interests separately on Capitol Hill, anyway, whatever veneer of solidarity is presented.

Looping it back to my original conversation, I went back to that well, and the opinion from that individual is: “My suspicion is that while the two sides are probably closer to the edge than they’ve ever been” over a la carte, tiering and indecency, “that we’re going to figure stuff out and continue to work together.”

Basically, it’s part of the cost of doing business. It’s up to McSlarrow and company to make the balancing act balance out.

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