Smaller Ops Seek 'Granite Strong' Comcast/NBCU Conditions

Operators say even without competing head-to-head with Comcast, they would be at disadvantage
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A group of 40 self-described "smaller" cable companies, all members of the American Cable Association (ACA), filed a letter with the FCC Monday arguing that the Comcast/NBCU deal would mean they would pay higher prices for so-called must-have content even though they do not compete head-to-head against Comcast in their markets.
They say that is because they do carry either a Comcast regional sports network (RSN) and NBCU cable networks, as well as an NBC station on some of the systems.
 "When multiple blocks of this "must-have" programming are combined under single ownership, what little bargaining leverage we have to resistunjustified increases in carriage fees will be reduced materially. This is because Comcast-NBCU can then threaten to withdraw all of these blocks of"must-have" programming simultaneously," they argued.
 "Even though none of these providers competes head-to-head with Comcast, they'll still need to negotiate with a single entity for both a Comcast RSNand NBCU's suite of national cable networks," said ACA President Matt Polka. "For ACA members, the default position in any dispute with Comcast-NBCUwill be to pay more for all Comcast-NBCU programming."
 ACA has called for baseball-style arbitration for carriage disputes involving RSNs or NBCU cable nets (CNBC, Syfy, USA amkong them) or NBC TVstations, as well as setting a market-based rate for smaller cable operators (125,000 subs or fewer) and special arbitration procedures for smalleroperators to mitigate the cost of such disputes.
 The sub-set of smaller operators were essentially adding their collective voice to that association call in the letter, which was directed to FCCChairman Julius Genachowski. Polka said there needed to be "granite-strong conditions that are guaranteed to prevent the predictable above-marketspikes in programming costs to consumers of small cable operators."
 Comcast and NBCU have consistently argued that in what they say is an "intensely competitive" marketplace the new company "cannot plausibly profitfrom foreclosure strategies against competing MVPD's by withholding content or against unaffiliated content providers by withholding distribution."
Comcast has also pointed out that there are FCC program access rules it must abide by, and has voluntarily agreed to apply "key components" of those rules to negotiations with MVDPs for retrans rights to NBC and Telemundo stations.
 The FCC and Justice Department are still vetting the $30 billion deal, but Comcast has announced executive changes under the proposed joint venture and continues to be hopeful for a decision by year's end.

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