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ACA: FCC’s Set-Top Box Proposal Would Force More Than 200 Small Pay-TV Firms To Exit Video Or Shut Down

Remainder Would Need To Forgo Planned Investments In Broadband

PITTSBURGH, May 24, 2016 - American Cable Association President and CEO Matthew M. Polka issued the following statement shortly after ACA filed detailed reply comments on the Federal Communications Commission's proposed set-top box regulations:

"The FCC's set-top box proposal would have a devastating impact on small pay-TV operators. As a result of burdensome mandates proposed by the FCC, more than 200 small providers would either go out of business or cease offering video service, leaving their customers, especially in rural communities, with fewer competitive options.  For those that do manage to stay afloat, they'll be faced with having to forgo important investments in innovations and broadband expansion or pass on increased costs to their subscribers.

"The FCC should abandon its proposal to impose new technical mandates on pay-TV providers before irreversible harm is done to the country's more than 700 smaller cable operators and their customers.  Despite limited capital and modest profits, smaller providers in rural and urban markets are at the forefront of offering consumers new ways to receive their pay-TV and other video services, including through innovative boxes and apps.  For example, many smaller providers offer TiVo devices and Moxi gateways that seamlessly integrate their video services with over-the-top programming.  Others offer their video services through apps that work on Roku boxes.  Just last week, ACA member WideOpenWest announced the rollout of the eBOX, an in-home device powered by TiVo's software and user interface.  Other ACA members, like RCN and Grande, recently launched Hulu on their set-top boxes.  These are innovative products and services that ACA members are providing without a government mandate.

"If adopted, the FCC's mandate would harm virtually all participants in the video programming ecosystem, including content producers and consumers. Smaller MVPDs and their subscribers would suffer the greatest harm - in many cases, a deathblow.  The depth and breadth of the opposition to the FCC's proposal is overwhelming: Multichannel Video Programming Distributors (MVPDs), broadcasters, content creators and providers, civil rights advocates, labor unions, legal and economic experts, manufacturers, not for profit groups, and think tanks, as well as hundreds of thousands of consumers, have all come out in opposition to the proposed mandate.

"Others share ACA's deep concern about the harm the FCC's proposal would cause to smaller MVPDs in particular.  There is widespread recognition on the record - including from a bipartisan group of 60 Members of Congress and even among proponents of the FCC's proposal, like TiVo and Public Knowledge - that, should the FCC nonetheless move forward and adopt its proposal, relief for small providers is warranted.  These Representatives, for instance, explained that ‘the proposal threatens the economic welfare of small pay-TV companies providing both vital communications services to rural areas and competitive alternatives to consumers in urban markets,' and, as a result, urged Chairman Wheeler to ‘press pause on the set-top box proceeding and reconsider the proposed rules, including the impacts they would have on small businesses and consumers alike.'

"ACA, which stands united with service and content providers and their vendors, urges the FCC to step back and take a closer look at all of the benefits ACA members and other providers are bringing to consumers and at the significant harm this plan would cause small operators and their customers. The best way to protect small providers is for the FCC to reject this ill-advised proposal outright.  Should the FCC move forward with its proposal, the agency should refrain from applying the rules to smaller MVPDs, as defined in comments by the American Cable Association."

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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