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

Association leaders say commission could use a dose of business reality
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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rules are so outdated.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."

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