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ACA Commends FCC Commissioner McDowell On Regulatory Fee Reform

Small Cable Operators Facing Large Increases Despite The Fact That The FCC May Have Overcollected By More Than $10M In Recent Years

PITTSBURGH, July 21, 2009 - The American Cable Association commended Federal Communications Commission member Robert McDowell for urging the agency's new leadership to review the FCC's methodology for collecting about $300 million in regulatory fees.

"ACA agrees with Commissioner McDowell that the FCC needs to reform its regulatory fee methodology.  Small, independent cable operators are staring at large increases this year if the agency sticks with the status quo," ACA President and CEO Matthew M. Polka said.  "Moreover, cable operators have historically paid higher per-subscriber regulatory fees than satellite providers despite the fact that the two entities compete against each other for the same customers."

McDowell expressed concern about the FCC's regulatory fee regime in a July 20 letter to FCC Chairman Julius Genachowski posted on the FCC's Web site. The FCC, McDowell explained, may have overcollected more than $10 million in each of the past two years.

"If the FCC is overcollecting from regulatory fee payers by more than $10 million a year, then why is the agency continuing to seek higher regulatory rates, particularly on smaller providers who will play a vital role in deploying broadband to areas in need?" Polka said.

In June, ACA urged the FCC to freeze key regulatory fees at current levels for truly small cable operators, adding that sharp fee increases under discussion would financially strain small cable owners that need to preserve capital in order to deploy broadband facilities in small markets and rural areas.

ACA proposed that the FCC should freeze regulatory fees at fiscal 2008 levels for cable operators with 5,000 subscribers or fewer. About three-quarters of ACA members fit the 5,000-or-fewer benchmark.

ACA's support for a freeze came after the FCC proposed hiking per-subscriber cable fees by 10 percent and microwave relay licenses used primarily by cable operators by more than 25%.

In 2008, the ACA formally requested that the FCC take action to address the disparity in regulatory fees between cable and satellite TV operators.  In its filing, ACA explained that the video marketplace today is highly competitive, particularly in the areas served by independent cable operators, and harm is caused by a regulatory fee structure that unjustifiably favors satellite TV over cable.  ACA called on the FCC to impose a uniform subscriber-based regulatory fee on all pay-television providers to establish platform uniformity.

The FCC's $300 million budget is almost entirely funded by assessing fees on regulated entities, including the owners of small cable systems.


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About the American Cable Association

Based in Pittsburgh, the American Cable Association is a trade organization representing more than 900 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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