ACA Leaders: Market Is Broken and FCC Doesn't Get It

Association leaders say commission could use a dose of business reality

By John Eggerton -- Broadcasting & Cable, 3/13/2013 5:38:48 PM

The leadership of the American Cable Association appears laser-focused on the issue of reforming retrans, which they suggest means cracking down on media consolidation, and schooling the FCC on the business realities of being a small or midsized cable operator.

That came out in a roundtable discussion with reporters at the ACA's annual summit in Washington on Wednesday.

Participating were ACA President Matt Polka, chairman Colleen Abdoulah of WOW!, vice chair Bob Gessner  of MCTV (formerly Massilon Cable), and chairman ex-officio Steve Friedman of Wave Broadband.

All were asked what they would do if they could be FCC chairman for a day (Polka had earlier asked that of FCC commissioner Ajit Pai in a Q&A session).

Polka said he would focus on the trio of media ownership, retransmission consent and the practice of coordinated negotiations among owned and co-owned stations in market.

"We talk a lot about the effects of tying and bundling," said Abdoulah, "but the cause is media ownership. Those rules are so outdated. There were certain protections that were needed at the time. Then these guys got smart, and they got the money, and they added to their portfolios."

Gessner added that he would associate himself with Pai's "chairman for a day" goal of setting and keeping deadlines. He said there have been two things he tried to do that required FCC assistant and "they have dragged on for four years." He said the cost was both financial and in time spent waiting. "So there are certain things we don't do, or continue to do simply because of the FCC.

Gessner pointed out that a lot of time has passed since the FCC opened its retrans proceeding, but "there is no smoke coming out of the chimney."

Abdoulah agreed that building accountability into the regulatory and legislative processes would be a huge accomplishment.

Friedman joked that if he were commissioner for a day he would appoint himself to a longer term. But he suggested seriously that anyone at the table could get things done at the commission because they were business people. "We make plans, we make decisions, and our businesses are all about executing them. And we are also all about the consumer."

Friedman said he doesn't think the FCC understands the marketplace. "They don't act like they do...I would educate them on the marketplace." He said the FCC was ignoring the fact that businesses that "can't negotiate a fair deal because the cards are stacked against them."

Abdoulah said that legislators also talk about not wanting to make it harder for business, but that is exactly what is happening. 

They all agreed that retrans is not a free market negotiation. Abdoulah said issue is not retrans or must-carry, but a "bloody consolidation issue." Retrans is the effect, consolidation is the cause, she said.

They were asked whether they could approach an Aereo TV and get stations that way, thus bypassing the station negotiation. Polka said that could be a possible solution, and Abdoulah said they were looking at all types of strategic programming solutions and alliances. She said her company, WOW!, had been talking to Netflix, but that their agreements with the movie studios don't allow them to partner with WOW!, but they are working on it.

Gessner said there were also technical issues with integrating it into a set-top.

Friedman said he had been renting Roku boxes to customers for the past year and a half for about $5 a month. He even suggested he was willing to wean them from his own traditional video service if that is what the customer wants. "We can help them cut the cord, which is fine," he said.

One impediment to smaller operators offering over-the-top service, they said, was lack of standardized authentication, and what they said was smaller operators place at the back of the line when it came to access to that online programming. Abdoulah said they were making some progress in TV Everywhere, but some programmers are dragging their feet and others are asking us to pay extra for it, which she called "crazy."

Abdoulah said that, ultimately, she thought the issue of access to programming would not be solved by the government but by consumer demand. "Consumer habits and pressure and changing behavior will put pressure on this broken business model."