Small Ops Revving Up D.C. Agenda

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On the eve of a new round of carriage talks with the major broadcasting
networks, small cable operators are turning to Washington, D.C., policymakers
for help with their No. 1 business issue: programming costs.

Over the years, small operators have complained that the broadcast networks
-- especially The Walt Disney Co. -- have threatened to withhold TV stations'
carriage rights unless the cable operators agree to carry their various cable
networks and pay hefty license fees.

In coming weeks, the American Cable Association plans to ask the Federal
Communications Commission to launch an inquiry into retransmission consent and
to look at whether the bargaining process between TV stations and cable
operators that occurs every three years is being conducted fairly.

The next retransmission consent round begins Oct. 1.

ACA president Matt Polka said his group is also focused on Capitol Hill. The
trade group is hoping lawmakers will introduce legislation in the fall that
would allow operators to offer high-cost basic-programming networks as a la
carte services, require programmers to pinpoint to the public the source of
increased operating expenses and permit antitrust action against programming
owners that tie carriage of must-have services to bundles of other channels that
are not as widely viewed.

Polka predicted broad support from lawmakers for legislation that would allow
them to say to constituents, 'Look, here a bill that's going to give you more
choice.'

Polka's group -- formed soon after passage of the reregulatory 1992 Cable
Act, which pushed some small operators to the edge of bankruptcy -- currently
includes about 900 cable systems serving some 7.5 million subscribers.

The group has been in contact with the National Cable &
Telecommunications Association regarding Polka's efforts on Capitol Hill. He
said NCTA officials were not encouraging because they feared that the effort
would snowball into a law reregulating retail cable rates -- something all
operators, large and small, want to avoid.

'That's a fear. That's legitimate. Look at 1992. If history repeats itself,
we are dead,' Polka said. However, he acknowledged that chances were good that
Congress would exempt small operators from a new round of rate
regulation.

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