PITTSBURGH, April 20, 2016 - The American Cable Association called on the Federal Communications Commission to use existing authority to take immediate action to address the harms to diversity caused by the largest programming conglomerates.
In reply comments filed on April 19 in the FCC's diversity Notice of Inquiry (NOI), ACA referenced two open proceedings where the FCC could take action. First, the FCC is currently reviewing rules that require TV stations to negotiate retransmission consent in good faith. ACA has proposed a ban on broadcasters' bundling top four-rated broadcast signals with regional sports networks or other "must have" programming in retransmission consent negotiations.
Second, the FCC could address bundling by vertically integrated programmers under the program access rules' prohibition on "unfair or deceptive acts or practices." But ACA warned that the effectiveness of such a step would be doubtful if the National Cable Television Cooperative (NCTC), which negotiates programming master agreements for hundreds of independent cable operators, is prevented from bringing complaints.
"The FCC needs to act soon to deny a handful of the largest video content players from serving as gatekeepers for the programming that cable operators can provide and their subscribers can access. Dominant programmers are flooding cable systems with unwanted channels and insisting on their purchase by subscribers. Those tactics not only drive up the cost of cable but also deny independent programmers the ability to reach a critical mass of viewers," ACA President and CEO Matthew M. Polka said.
In its reply comments, ACA demonstrated that, while programming interests claim market conditions represent "the mythological horn of plenty," in reality independent programmers - and the independent viewpoints they represent - are being squeezed out of the marketplace.
For example, programmers insist on carriage of their channels on a bundled basis, conditioning access to their "must-have" channels on carriage of channels that have little audience appeal. While many programmers insist their channels are available on a stand-alone basis, ACA demonstrated otherwise. Among other evidence, ACA submitted a declaration by Judy Meyka, Vice President of Programming at NCTC, stating that these were effectively disingenuous offers, "where regardless of the channels desired, the rate was as much or more than the whole bundle."
ACA also described how forced bundling and penetration requirements harm diversity.
Chris Kyle, Shentel's Vice President of Industry Relations & Regulatory, submitted a declaration stating that bundling has reached a point where even 750 MHz systems face significant capacity constraints. Indeed, Kyle named seven systems with 1 Gigahertz of capacity that have fewer than five channels of capacity that can be devoted to additional video or broadband.
Yet, programmers fail to provide such systems with any relief from their bundling requirements. Because of this, Kyle said, Shentel is unable to carry independent programming that it might otherwise carry. Kyle added that consumers want "skinny bundles" as a bridge to transitioning to broadband video service. Large programmers' penetration requirements, however, prevent him from offering such slimmed-down bundles.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 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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