Agency Urged To Address Internet Blocking Tactic Of Broadcasters, Cable Programmers
PITTSBURGH, October 3, 2014 – The American Cable Association urged the Federal Communications Commission to open a new rulemaking in response to a variety of market abuses by broadcasters and cable programming vendors alleged in a detailed filing by Mediacom Communications and validated in a sworn declaration by the head of the independent cable community’s leading buying group.
“Mediacom has identified a range of troubling practices by programming vendors in today’s media marketplace that warrant careful investigation and consideration by the FCC. ACA encourages the FCC to move forward expeditiously on this request,” ACA President and CEO Matthew M. Polka said.
A rulemaking is a public process designed to allow the FCC to collect comments from the public and interested parties on agency proposals to modify existing policy or adopt new regulations. Conducting a rulemaking does not automatically mean the agency will act. ACA has long supported the FCC’s efforts to re-examine and update its rules governing retransmission consent and program access and strongly supports consideration of the issues that Mediacom has raised as part of this important undertaking.
In its request for rulemaking, Mediacom stressed that a handful of companies control the vast majority broadcast and cable programming and wield their power to coerce smaller multichannel video programming distributors (MVPDs) into accepting discriminatory terms and prices that make them less price competitive with such MVPD giants as Comcast and DirecTV.
Mediacom explained that programmers insist on bundling unwanted programming with their most highly-desired programming, leaving MVPDs with virtually no choice but to acquiesce. Programmer reliance on bundling bloats the size and price of the most-subscribed to “expanded basic” cable programming package, generating a large volume of complaints by consumers who want the big bundle subdivided into smaller and more reasonably priced offerings.
Mediacom also stressed that programmers put smaller MVPDs at a disadvantaged by granting volume discounts to the largest MVPDs and also granting them “most favored nation” status with respect to prices and terms, resulting in Mediacom paying more per subscriber for the very same programming without any cost-based justification.
Mediacom’s rulemaking request also noted that programmers are retaliating against cable operators amid programming disputes by blocking broadband subscriber access to their affiliated websites that carry programming otherwise freely available to anyone with Internet access.
In his FCC declaration, Rich Fickle, CEO and president of the National Cable Television Cooperative (NCTC), said his buying group has experienced firsthand how programmers wield their market power to take advantage of NCTC members.
“Large programmers often cite ‘most favored nation’ clauses as a reason they cannot offer smaller MVPDs more flexible packages or the flexibility not to carry channels less relevant to certain markets. MVPDs are almost always required to carry high-priced sports content widely, even though a relatively small portion of the consumer base is interested in that content. The cumulative effect is to raise costs to all subscribers and to restrict use of bandwidth for other services not owned by the large programming supplier,” Fickle said.
In its petition, Mediacom proposed several different approaches to ending these practices:
- An “a la carte programming option” that would require programmers to provide MVPDs with the right to offer on an a la carte basis any video programming not previously carried or based on its price exceeding certain thresholds;
- An “unbundling option” at the option of the MVPD that builds on the program access condition imposed on Comcast-NBCU;
- A prohibition against blocking of Internet access as a tactic in negotiating programming agreements.
“Although the FCC has several pending rulemakings considering program access and retransmission consent reform, it has not specifically sought comment on the proposals put forth in the Mediacom petition in any of these. ACA recommends that the issues Mediacom has raised be examined in a new rulemaking as Mediacom has requested,” Polka said.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 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 https://acaconnects.org/