ACA Connects has lined up a bipartisan duo of former Federal Communications Commission chairs — Democrat Mignon Clyburn and Republican Ajit Pai — to keynote its 30th-anniversary dinner during the ACA Summit in Washington.

The dinner is scheduled for February 28 at the National Museum of American History.

Pai was chair from 2017 to 2021, during the administration of President Donald Trump, and is arguably most closely associated with the FCC’s decision to roll back network-neutrality rules. He is currently a partner at investment firm Searchlight Capital Partners in New York.

Clyburn was the first woman to lead the FCC when she was appointed acting chair by President Barack Obama in 2013 after the exit of chair Julius Genachowski. She advocated for affordable and equitable broadband deployment and stayed on as commissioner after Tom Wheeler took over the chairmanship. Clyburn is currently principal of her own firm, MLC Strategies.

Pai and Clyburn join current FCC commisioners Brendan Carr and Nathan Simington among the ACA Summit speakers. ▪️

Senior FCC Republican Brendan Carr will speak at ACA Connects’ 30th Annual Washington Summit, the first in-person gathering for the small-cable trade group since the pandemic began in 2019.

Carr will address the conference March 1 at the Grand Hyatt Washington hotel.

With the Federal Communications Commission at a 2-2 political tie for the past couple of years, Republican members have more power than usual, since agency decisions must be bipartisan to be approved.  As a result, issues like new network-neutrality rules and some types of Universal Service Fund reforms, which Democrats generally favor, have been on the back burner.

Carr, appointed by former President Donald Trump, has been a commissioner since August 2017.

Carr was FCC general counsel under then-chair Ajit Pai, as well as wireless, public safety and international legal adviser to then-commissioner Pai. Before that, he was an attorney at Wiley Rein, something of a bullpen for future FCC commissioners.

Carr has been a strong advocate for reining in Big Tech and has also been an advocate for strengthening the tower crew and construction workforce as part of the rollout of 5G.

He has also been a leader in the FCC’s Connected Care Pilot Program telehealth initiative.

Carr is a graduate of the Catholic University of America’s Columbus School of Law and got his undergraduate degree from Georgetown University. ▪️

Concerns about spreading the coronavirus prompted the cable trade group ACA Connects to postpone its 27th annual summit (March 17-19) in Washington, D.C., one of many such actions taken in the realms of technology and other industries. (An ad for the event in this issue of Multichannel News was printed before the postponement.) NYC TV Week Spring, produced by MCN parent Future plc (March 24-26), and the NAB Show in Las Vegas in April were still on as scheduled at presstime. For the latest tech event coverage, go to multichannel.com and NextTV.com.

ACA Connects said it has decided to postpone its 2020 policy summit in Washington later this month.  

After careful consideration taking into account the most relevant new information, ACA Connects has decided to postpone its 27th Annual Summit on March 17-19 in Washington, D.C., doing its part to help the global health community combat the spread of the coronavirus," the association said. 

“It’s unfortunate the Summit will not happen in March after so much planning and the incredible interest of our members to again join us in Washington. We really thought we could make a go of it, even earlier this week,” said ACA Connects president Matt Polka. 

Polka informed attendees in an email Thursday (March 5), telling them that after two "non-stop" days reviewing development's in the virus' spread, they had concluded "– now is simply not the time to hold our Summit."

"[T]he last 48 hours have clearly and rapidly shown the spread of the virus was getting worse, our members and attendees were becoming increasingly concerned about travel, and Washington was preparing for swift action to prevent transmission of COVID-19 in lawmakers’ and regulators’ offices," Polka said. "Federal officials have already begun reducing access to their offices and preventing their employees from participating in large group functions."

The policy lineup had lined up a number of top government officials, including from the FCC.

The announcement came only a day after the FCC signaled it would be suspending staff appearances before large groups.

The American Cable Association is lining up speakers for its upcoming ACA Connects Summit 2020 in Washington March 17-20.

Republican commissioner Michael O'Rielly and Atlantic senior editor Ron Brownstein have been penned in for addresses to the assemblage.

ACA said the FCC's leadership on rural broadband policy is key to closing the digital divide. "Our members benefit when learning firsthand how trends in technology and policy impact their hometowns,” said ACA Connects president Matt Polka.

Brownstein has been tapped as a keynote speaker to talk about the upcoming election, both national and statewide campaigns.

“ACA Connects members understand that any business decision – whether investment in new broadband networks, or adding services for local businesses -- is made through the prism of policy initiatives. Ron Brownstein’s experience as a chronicler of the political process provides much needed perspective,” said Polka. 

American Cable Association president and CEO Matthew Polka’s members — small cable operators — have an outsized role on the front lines of one of the biggest issues of the day: rural broadband deployment. It has been the subject of hearings, with Polka himself recently testifying; of letters from Congress to the Federal Communications Commission; and of President Donald Trump’s promise of connected agriculture for his between-the coasts constituency.

The ACA this week is hosting its annual ACA Summit in Washington, D.C., where some 350 small and midsized independent cable providers will talk shop and take their concerns in person to Capitol Hill and to FCC officials. On their collective mind: retransmission consent, C-band satellite spectrum management and more.

Polka said the ACA supports bipartisan legislation restoring bright-line net neutrality rules, a big priority, but only if those rules are applied to such edge providers as Netflix and Google as well as ISPs.

Polka paused in his pre-show adrenaline rush to talk with Multichannel News (a media partner of the conference) about the key issues motivating his members.

MCN: Your members are in the vanguard of one of the hot issues of the day, rural broadband deployment. What help do you need from the FCC on that front. Better maps? Improvements to the subsidy process?

Matthew Polka: The first thing I would say is that the FCC has already done the biggest thing for our members, which was to eliminate heavy-handed regulation under Title II, which has encouraged investment in deployment.

That single act by chairman Ajit Pai and the FCC in December 2017 has done more for our members’ ability to deploy broadband and seek and secure investment than anything I could ever ask for, which is why one of the things that we will be talking about with the Hill next Thursday is that the light-touch of regulation on ISPs [under Pai’s Restoring Internet Freedom order] has also worked for consumers, who are receiving greater service in smaller, rural, hard-to-reach areas than they have ever received before. So, “stay that course” would be the first thing.

MCN: And about mapping, which is another hot-button issue?

MP: I do think that better mapping will be helpful in many, many ways. Mapping today is better than when we started this national broadband effort in 2009 because of form 477 [with broadband deployment data], as well as that the challenge process in the Connect America Fund to is more precise about where broadband is. But ultimately, we believe that if broadband is to be included in an infrastructure package, mapping of wired broadband is essential. More of a geocoded map that, once and for all, finally tells us where homes are served and where they are not would be a big deal in helping serve the areas that need broadband the most.

The third thing is regarding funding, whether it is the FCC’s Connect America Fund or [USDA’s] Rural Utility Service programs, we need to continue the helpful trend of laws and regulations that target funds where broadband isn’t, including the most recent definition that funds will be targeted where 90% of an area doesn’t get at least 10 Mbps downstream, 1 Mbps upstream service. That is an unserved area that should receive priority-targeted funds.

MCN: Talk about your members’ unique issues when it comes to broadband deployment.

MP: Our member companies are broadband in every sense of the word. But they do have unique issues. You noted how Washington focuses its attention on rural broadband deployment, saying: “We need to get more out there.” We agree with that focus because of the unique circumstances our members have to deal with in terms of fewer customers per mile, higher cost of technology per customer, higher cost of compliance and regulation per customer, lack of availability of technology versus larger companies with access to technology.

That underscores why we say that what is really needed in Washington this year is a consensus [net neutrality] bill, which would help consumers as well as ISPs, and even extend certain protections and regulations over edge providers.

And we’re talking about a deal I think members of Congress could reach if there is political will to do so. Codifying net neutrality principles of no blocking, no throttling, no paid prioritization, things that our members do each and every day to support their customers, which I think is not a bridge too far.

I was very encouraged by the news of the [Senate] net neutrality working group that has been created. I think that is a very, very positive sign because it shows that Republicans and Democrats can work together to try and find solutions that aren’t necessarily politicized.

MCN: Last time we talked you thought bipartisan legislation would be a steep climb, and, frankly, our takeaway from last week’s House hearing is that there wasn’t a lot of bipartisanship there. Working groups are good, but we didn’t elsewhere see a lot of hope for a bipartisan bill. You do?

MP: I can’t say I disagree with you.

Let’s face it, we’ve been fighting this issue for a lot of years. So, it is certainly hard to reach consensus on such hot-button issues. But I maintain that if we are all interested in insuring consumers’ interests are protected but also insuring that we deploy more of the broadband that consumers want — to residences, businesses, hospitals, institutions — then we have to find a way that meets the needs of both consumer and provider and we can’t be: “It’s either one way or the other.” That just isn’t going to work.

MCN: Would you support restoring a general conduct standard along with the other bright-line rules? That seems to be one of the major issues with any new legislation.

MP: That is a hypothetical I can’t answer. But we know how the general-conduct standard was applied under the previous rules. That was not helpful. It was too vague and uncertain and that was demonstrated. Just the threat of that, as well as the imposition of Title II, even with the possibility of forbearance, was enough from our members’ perspectives to basically dry up their capital, their investors and their ability to deploy more.

So, that is a very difficult question and would have to be worked out together. We would really have to roll up our sleeves in those discussions. So we would be very concerned about a general-conduct standard, but we realize that these are issues that would be on the table that we would have to discuss to reach a deal.

MCN: Have your members all but abandoned traditional video and do you see them cutting that cord entirely soon?

MP: That’s a really interesting question and a shifting paradigm right now. I don’t see our members themselves simply saying: “we’re not in the video business any longer.” Even companies that have been very forthright about it, like Cable One, which will be Sparklight soon, “de-emphasize” video but are still more than happy to provide it to consumers who want it.

I think it just shows the shift in consumer behavior. Most of our members report to us today that it is not by their choice but their customers’ actions. Out of 10 new customers they have, six to eight of them are broadband-only subscribers. And that’s because of what broadband and our members provide that allow our customers to consume over-the-top. I am that way personally. I am a very loyal Comcast subscriber and have the full boat of services. But I watch most of the video I watch on an iPad on an over-the-top service or an integrated service with Xfinity. And I am not alone.

So consumers and their habits are migrating away from cable to more of a broadband dynamic, which I think has a lot to do with the demographics of the younger consumers. But there is still a need for video in many households. It’s just that it is diminishing over time.

MCN: Is that the reason you feel the need for Washington to start regulating the edge, since that is where the video will be coming from? You seem to have a hard enough time getting program-access attention in Washington with traditional video, which does have access regulations.

MP: That’s exactly right. We have always feared that simply because of size. We have fought consolidation on the content side for many years and have seen the ills that have happened when content companies come together and get bigger and own the programming or become vertically integrated.

Now, when you are talking about the Internet and literally two or three companies, maybe four, that control internet traffic and deal with consumer privacy data and access to content with no regulation whatsoever — these things we talked about a few years ago as the “cableization of the internet” — it’s not a stretch to envision that a Google could say to an ISP: “We know, because we have the data, that 92.783% of your customers use Google as a homepage. So, now we want you to pay us $3 or $5 per month per ISP subscriber or we will block access to Google as their homepage.” That is not farfetched.

Same with Facebook conditioning access to its network or Amazon conditioning access to its network. There are many concerns that we have shared, which is why we have said that any solution on open internet policies must include edge providers, given the massive control they have over internet traffic, data and access. If we are going to be talking about a solution that focuses on no blocking, no throttling, no discrimination, no paid prioritization, as well as protection of privacy, it makes no sense, and would not be supportable, if such a plan did not include the edge providers.

MCN: So, are you in the Sen. Elizabeth Warren “break up Big Tech” camp?

MP: It is not necessarily a dodge to say this, but I had [Public Knowledge president] Gene Kimmelman on a podcast recently where he said that breaking up the big companies might be more trouble than it was worth. He cited Ma Bell and an effort that took years to break up, only to eventually result in re-consolidation. So, I am not necessarily convinced a breakup is the best route simply because of the time it would take and the complexity. This is why I think sensible net neutrality/open internet legislation that protects consumers and applies reasonably to ISPs and edge providers is the preferred method.

MCN: What other major issues will your members be focusing on in discussions with Congress?

MP: There are two in particular. One is this year’s reauthorization of the STELAR satellite bill. We have been encouraged by people like Senate Commerce Committee Chairman Roger Wicker — despite broadcasters’ attempts to dismiss it — that there should be a reauthorization [of the compulsory license that allows satellite operators to import distant TV station signals without negotiation individually for them].

Other leaders have said this as well. So there is a recognition that the reauthorization is necessary and important to our members because it is an opportunity to reexamine existing broadcast carriage rules. I am very happy to see people like Congressman Steve Scalise and Congresswoman Anna Eshoo continue to support bills they have introduced before, whether it is Congressman Scalise’s Next Generation TV Marketplace act, which would eliminate outdated retrans and copyright regulations, or Congresswoman Anna Eshoo’s Video Choice bill, which would allow for tiering of broadcast channels and standstills during disputes. These are good ideas that won’t eliminate the retrans regime, but would provide for a meaningful update reflecting a changed marketplace.

MCN: But, traditionally, STELAR-delivered reforms start big, but wind up being more nibbling around the edges. Do you see a political difference this time?

MP: I would disagree with that. I look back five years ago [STELAR comes up for renewal every five years] and, because of ACA’s efforts, we were successful in winning bipartisan language that prohibited joint negotiations by broadcasters in a marketplace.

That was a big deal. At the time we also had limitations placed on some joint services agreements. And even that has been relaxed to some degree, there continues to be great skepticism that, when companies that are non-commonly-owned come together to share services, they could be violating antitrust principles.

So, we definitely believe there could be significant change this year. I think the time has come for bold ideas to be considered rather than living with outdated regulations in 2019.

The fact is that even broadcasters’ distribution world has fundamentally changed. We had members recently involved with retrans disputes, where for example Nexstar blacked them out for more than a month, where our members found ways to give alternative programming to their customers through the [broadcast] networks that allowed for streaming of their content and even sports.

MCN: You mentioned a second big Hill issue?

MP: Yes, we will be talking to Congress and the FCC about the move to 5G and using the C-band spectrum [which operators use to get cable nets from programers]. From a 5G perspective, all forms of broadband deployment to give consumers more choices are good, whether satellite, 5G, fixed wireless, wired, you name it.

As the FCC is looking at the C-band spectrum, there are a couple of things. First, just using C-band for 5G will create interference for our members in receiving programming signals they get using satellite, so there is that issue. The satellite companies say they have filters to fix this, but our members are saying the filters don’t work. So, you have to figure out how to get signals reliably without interference, and maybe one of the ways to do that is terrestrially, but there is a cost to that.

So, our view is that if the FCC, in order to further 5G, is going to auction off C-band spectrum and bring in some $60 billion to $70 billion, it seems reasonable — just as the broadcasters have been reimbursed for repacking — that MVPDs should be reimbursed to ameliorate the negative impact of 5G, whether that is through equipment for satellite delivery or for terrestrial delivery.

MCN: Are you talking about just covering costs, or something more?

MP: It is developing. We are working with the FCC on proposals that would cover out-of-pocket costs for transition to whatever technology means are necessary to avoid the harm. There are some other elements. Broadcasters, in typical fashion, maybe asked for more than they deserve [TV stations use the C-band to receive programming from their networks, too]. We are focused on what would make an MVPD whole for capital outlay to avoid interference.

MCN: What do you hope to hear from FCC chairman Ajit Pai at the summit and how would you handicap his first two years?

MP: I will say this first: we have really enjoyed working in association with chairman Pai because of his depth of experience at the commission and what he has put into practice with his policies. And we have not always agreed with him. I mean, we are not exactly enamored with greater broadcast-ownership relaxation that gives them more power to take advantage of outdated retransmission-consent rules.

But his approach has been one we have been able to trust, rely on, and work together on. I expect him to say: “Thank you for doing what you have been doing since the Restoring Internet Freedom Order.” We told him that if those rules were lifted our members would invest and deploy, and by gosh they did.

And they are working with or without federal funds to connect their communities. Certainly I think he will recognize that what we have done together has worked.

Second, I think he will be focused on how we reach the places that still need to be reached and how we can work together to do that.

Washington, D.C. -- "High speed data has years and years before showing signs of maturity," Cable One executive chairman Tom Might declared here Wednesday during a panel at the American Cable Association Summit

Echoing a growing view that over-the-top content is replacing traditional linear TV as a favored video source, especially among younger viewers,  Might said, "Were making more money on video today than we were five years ago," noting that about half of Cable One’s subscribers are focused on high-speed data service (HSD).

"We think over-the-top content is a great complement to our HSD-centric strategy," he said during a panel on "Leveraging Disruption in the Video Market." Might noted that Netflix service is integrated on Cable One’s TiVo boxes, but he admitted that "those are tough negotiations."

Might cited conversations with other independent cable operators here during ACA 24th annual Summit, with many of them skeptical about pulling back from linear video carriage. He said that Cable One applied Nielsen analytics to its services package starting about five years ago and found that "customers in some categories were not as profitable." 

"The psychographics of our own customer base" was surprising,  he confessed, but the company recognized that traditional customers were "largely going to competitors or satellite."  Moreover, about 10% had completely cut the cord.

With those findings, Cable One "had this Eureka! moment when we identified the value of different kinds of customers," he explained.

Might also said that with its digital plant in place, the company is better able to serve enterprise customers.

"Business services have grown at a steady rate and have a long road of opportunity ahead," he said.

Moderator Mark Robichaux (editorial director of NewBay Media's Multichannel News and Broadcasting & Cable) pointed out that in the last three quarters, "cord cutting is up and network ratings are down," observing that those factors may be contributing to operators' decisions to focus on broadband delivery services and "no longer pushing video."

RELATED: NCTC Accelerating OTT Content Packaging for Cable Ops

Dwayne Benefield, VP and head of Sony's PlayStation Vue, confirmed that he sees "a symbiotic relationship" between cable operators and OTT providers such as his.

By streaming Netflix, games, live TV, music and other services, "it helps drive acquisition for partners at a local level," Benefield said. He acknowledged that Sony is "talking to many companies in this room." 

Since PS Vue is not strictly tied to the PlayStation console for distribution, Benefield focused on the opportunities for cable delivery of its content. He claimed that, "We have more than 90% customer satisfaction levels."

RELATED: PlayStation Vue Bites Into Apple TV

Michael Smith, another panelist and professor of Information Technology and Marketing at Carnegie Mellon University, advised that operators could "look at marrying their brand to Vue, especially to reach the target demographic of 18-34 year olds."

Smith also recommended "not to think about Netflix as another channel."

"It is fundamentally a different business," he said. Smith is co-author of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, a new book that delves into Netflix role in the evolving market.

Too Many Commercials?

As for legacy video providers finding new roles in the evolving digital marketplace, Elisabeth Sami of NBC News identified a major challenge as "how to keep strong brand connections."  She also cautioned about the growing ad load on linear TV.

"The ad load today is harming our collective business as we compete with OTT services," said Sami, SVP-global strategy and business development of NBC News Group. "We need to reinvent what an advertisement will look like in the future.  There's talk about shortening ad pods by 30% and doing more target advertising. We're having to think about that a lot internally," she explained.

Although viewership on NBC's cable news as well as broadcast newscasts has climbed -- substantially due to interest in recent political developments -- Sami said that the networks "don't have a one-to-one connection" with viewers. 

"We're establishing them [viewer interactions] digitally," she explained, citing social media components that are now integrated into NBC News programming.

O'Rielly Seeks Operator Input  

Earlier in the program, FCC Commissioner Michael O'Rielly  focused on Open Internet/net neutrality, Business Data Services and policy reform. 

"I hope we can reopen the decision," O'Rielly said of the Title II ruling of the previous FCC majority. He said he disagrees with prioritization, noting that it was "incredibly problematic on how it tried to bifurcate the industry." 

O'Rielly characterized FCC Chairman Ajit Pai's efforts to "remove barriers" via process reform as "near and dear to my heart” and describing the effect of over-regulation as having "a unique and disproportionate effect on small businesses," which resonated well among the audience of small, independent cable operators.

During his onstage discussion with ACA president and CEO Matt Polka, O'Rielly (making his first-ever appearance at an ACA Summit) invited cable operators to tell the Commission, "What can we change to make your life easier - things that don't cause other industry segments to have a heart attack."   

O'Rielly said his goal is "to reduce the economic cost [and] to modernize our rules."

"Hopefully in this Commission, things will improve,” he said, and he smiled benignly when Polka reminded the Commissioner that he's now in the new majority.

Washington — The policy-driven ACA Summit in the nation’s capital March 28-30 will feature the new Federal Communications Committee chairman Ajit Pai as a speaker before cable and telecom operators spread out over the city to take their message to the agency and the Hill.

In some ways, they will be preaching to the converted.

The American Cable Association is coming off a string of victories at the FCC, most notably Pai and fellow Republican Michael O’Rielly’s successful effort to renew and expand the small business waiver from the FCC’s enhanced transparency rules that kicked in in January.

The ACA, which represents smaller, independent cable operators, had been pushing for the extension and expanding the carveout from systems of 100,000 subscribers or fewer to 250,000 or fewer. It got bipartisan support in Congress, and then Pai and O’Rielly delivered.

The chairman has also circulated an order granting the ACA’s petition that it modify the Charter Communications- Time Warner Cable overbuild condition so that the mandatory buildouts don’t have to include 1 million high-speed overbuilds.

ACA members in the potential path of those overbuilds were not happy about the condition, and the ACA let the FCC know it.

While at press time the item had not been adopted, that may only be because all three commissioners have to vote an item on circulation. Pai is clearly on board, and O’Rielly dissented from that and other conditions when the deal was approved — his office would not confirm his vote, but it almost certainly will be to jettison the condition.

Asked what the ACA will be pushing for in the new administration, Matt Polka, the association’s president, signaled the group would be pushing for “Congress to address government and private-sector barriers that hinder broadband deployment, apply light-touch regulation to the provision of broadband Internet access service and provide targeted support to encourage broadband deployment in unserved areas.”

The ACA would also like to see “new policies that modernize video regulations that also serve to spur broadband investment and deployment.” The ACA has argued for retrans reforms and preventing what it sees as unfair carriage contract provisions, like bundling, but that will be a much tougher ask from the Pai FCC, given the chairman’s past issues with stepping into contract issues.

The FCC’s new majority members will both be in the speakers’ lineup at the ACA event. O’Rielly is scheduled to speak March 29 at 1:15 p.m. and Pai March 30 at 8 a.m.

Also scheduled to be on the dais: Sen. Shelley Moore Capito (R-W. Va.), March 29 at 8:30 a.m.; Rep. Kurt Schrader (D-Ore.), March 29 at 10 a.m.; and House Republican Conference chair Rep. Cathy McMorris Rodgers (R-Wash.), March 29 at noon.

The following is an edited excerpt from comments by American Cable Association chairman Robert Gessner, president of MCTV in Massillon, Ohio, on March 2 at the 23rd ACA Summit in Washington, D.C.

Though traditional TV service remains important, broadband Internet is ACA’s future. We have established three basic principles to guide our advocacy regarding government involvement in the broadband Internet market:

• Statutes and regulations should be competitively and technologically neutral. They should facilitate network deployments and be targeted to minimize any adverse economic impact on smaller providers and their subscribers;

• Market consolidation and concentration that would harm consumers or competition should be prevented.

• Smaller providers should not be unreasonably disadvantaged. They should be protected from undue market power, unfair or deceptive acts or practices, or other actions contrary to the public interest.

ACA gained a number of policy victories at the FCC. I’ll mention two. First, under a recent FCC order, every cable operator in the country, large or small, is considered subject to effective competition and no longer subject to local price controls.

Second, ACA persuaded the FCC to require Dish Network and DirecTV to pay their fair share of FCC Media Bureau regulatory fees. Dish and DirecTV will pay $4.1 million this year, and I expect that to increase over time.

We do face many challenges. Last year, the FCC imposed Title II common-carrier regulation on us, in one of the biggest policy shifts in FCC history. This FCC action has divided the industry into hostile camps — ISPs on one side, edge providers on the other. ACA is fighting to roll back these harmful regulations. A court ruling is expected in the near future.

Another challenge is retransmission consent. Retrans fees soar while broadcast ratings sink. Why? Because broadcast stations exploit outdated federal rules to gouge viewers. During the past decade, retrans fees have risen by 22,400 percent. SNL Kagan projects MVPD retrans payments will reach $10.3 billion by 2021.

ACA’s persistent efforts encouraged the FCC to open a rulemaking to review its rules that require TV stations and MVPDs to negotiate in good faith. ACA submitted numerous recommendations for determining whether certain conduct is a per se violation of good faith or, at the very least, evidence of bad faith:

Here are just a few:

• It’s bad faith for a TV station to insist on bundling top four-rated broadcast signals with regional sports networks or other “must have” programming.

• It’s bad faith for a TV station to black out linear programming before “marquee” events.

• It’s bad faith for a TV station to black out online programming to gain leverage.

ACA also has been a steady voice at the FCC about the abuses MVPDs suffer at the hands of non-broadcast content companies. Recently, the FCC started a Notice of Inquiry into their practices. ACA will highlight the difficulties ACA members face in providing the services consumers desire.

Another challenge is set-top box regulation. FCC chairman Tom Wheeler has launched his “unlock the box” campaign to require new technical mandates to open all set-top boxes to third-party use. ACA thinks this proposal is horribly misguided. It would inappropriately insert the government into a market teeming with participants, innovation and tens of millions of satisfied consumers.

Washington -- “Everyone seems hell-bent on making sure the bundle persists, [but] we cannot continue to raise prices. That is what will eventually break the bundle,” said Michael Morrison, director of Fioptics Service at Cincinnati Bell, which will launch its “Fioptics MyTV” skinny bundles of video service on Monday, March 7.

“We would rather go to broadband, a much higher-margin product,” he added. “We want to offer those choices.”

Speaking on a panel about “The New Age of Video Consumption” during the American Cable Association Summit in Washington, Morrison explained that the company’s biggest challenge was determining channels that viewers want to see, even if they are not the most popular channels nationwide. 

RELATED STORY: "Cincinnati Bell Rings Up Slimmed-Down TV Packages"

“Being able to let a customer slim down their entertainment options is very important. This is something they want. We’re taking our first step,” Morrison said.

MyTV will supplement Cincinnati Bell’s current video service, which serves 115,000 customers, overbuilding the Time Warner Cable system in the market. When queried by Multichannel News, Morrison declined to predict the take-up of the new service.

MyTV will offer viewer-selected tiers will start with a $35.99 per month Starter Package ($29.99 for the foundation subscription plus $6 for one genre bundle), which will include about 100 channels. This core package includes local channels, as well as cable channels including AMC, Discovery Channel and HGTV.

Morrison said that during consumer testing, 80% of potential subscribers liked the skinny bundle options and pricing, compared to about 25% who like current pricing and structural formats. “We have good options versus Time Warner,” Morrison said, noting that MyTV is carried on the 1 Gbps network that Cincinnati Bell has built during the past eight years. 

“We hope that with the MyTV launch, it will make the entertainment more valuable,” he added. “If you look at what we’re doing, we know that we’re paying more for the packages [than bigger MSOs]. It forces us to be more creative to find new ways to package [channels].”

Morrison’s enthusiastic outlook about MyTV and skinny bundles was part of ACA’s dialogue about the migration of cable operations away from traditional video delivery.

Gene Kimmelman, CEO of Public Knowledge, on the same panel, focused on the ability of new technologies to delivery new services.

“The danger is that the traditional players are continuing to duke it out under old rules and [hence] may be left behind,” he said.

Sandy Brown, CEO of ONE World Sports Network, predicted, “As we look at where this will head, there will always be a place for the bundle.” But he acknowledged that “the OTT market is not as it will be in a year or two.” 

Asked about the role of Comcast’s X1 platform and other access concepts, Morrison said that he expects future licensing deals will generate new kinds of program options.

“Whether it’s provided by X1, TiVo or the Roku box, if a customer has one platform, that’s the best experience for the customer.” He said that he expects “three to five years from now, most of our experiences will be through an app.”

And he emphasized that, “High quality content will continue, whether it’s over the top or [via] a traditional bundle.”

The American Cable Association and National Cable Television Cooperative, long allied in the push to get the Federal Communications Commission to address issues like package deal programming negotiations, are ready for the agency to start drilling down on the issue.

The commission last week voted to launch, at the request of FCC commissioner Mignon Clyburn, an inquiry into access by traditional and online programming to distribution platforms.

"With the release of the FCC's Notice of Inquiry, the programmers behind these unfortunate market trends will finally come under the close scrutiny they so clearly deserve," said Matt Polka, president of the American Cable Association, in a jointly released statement today (Feb. 25).

The topic should be top of mind next week, when ACA members meet in Washington for their annual policy summit and then call on regulators and legislators in the city. This past December, the two associations teamed up to complain in Washington about channel-bundling tactics AMC Networks was then using as part of renewal talks with the cooperative. AMC and the NCTC later reached contract terms, though AMC programming did come off some smaller carriers and remains off them, as The Wall Street Journalreported.  

NCTC, which negotiates program purchases for consortium of smaller providers, teamed with ACA to applaud the FCC inquiry, which both have long advocated.

"While we've completed many distribution agreements with new networks over the last few years in an effort to support diversity in content, unfortunately, our member operators are prevented from broadly supporting these networks as a result of the forced carriage terms demanded by large network groups," NCTC CEO Rich Fickle said in the statement.

Fickle says that some negotiations have included trying to discourage his member's support for alternative over-the-top video offerings, an issue the FCC definitely wants to hear about.

Obstructing access to OTT, if true, is definitely on FCC Chairman Tom Wheeler's list of anti-competitive no-nos.

In outlining the inquiry last week, Media Bureau chief Bill Lake called it a fact-finding enterprise on program diversity and possible ways to address complaints that cable operators and other multichannel video-programming distributors (MVPDs) might be stifling competition.

The NCTC and ACA are drawing the agency's attention to what they called "onerous requirements in cable company carriage contracts that require a high percentage of subscribers to take -- and pay for -- the programmers' suite of shows, regardless of popularity. These provisions, known as guaranteed minimum penetration clauses, have been criticized by consumer advocates and others for limiting customer choice." Distributors say their ability to experiment with lower-cost packages of channels, possibly tacked onto broadband subscriptions, are hindered by contract strictures that require many networks be included in the most popular packages of programs.

"Besides reducing consumer choice at a time when subscribers are increasingly seeking low-cost cable TV choices and accessing their favorite programs online, this 'penetration guarantee' requirement hinders our ability to take on new independent and diverse programming," Elaine Partridge, VP of programming for ACA and NCTC member NewWave Communications, said in the groups' statement. "These outdated requirements limit our ability to offer subscribers inexpensive options, including the low-cost 'lifeline' and local cable packages."

Added Jim Holanda, CEO of RCN Telecom Services and Grande Communications, in the statement: "These restrictions are a version of anti-consumer bundling, greatly limiting consumer choice and flexibility and keeping our viewers' fees artificially high. It forces subscribers to buy services they do not want, and hurts low-income consumers who would choose not to pay extra monthly charges to simply watch the local broadcast cable package." 

The FCC is inviting comment on the state of the marketplace and the challenges to entry. It’s also seeking comment on most favored nation and alternative distribution method provisions in contracts, which independent networks have said can hinder their access. It is also seeking comments on OTT distribution, program bundling, and issues affecting public, education and government (PEG) channels.

The FCC is also seeking comment on its legal authority to address any hindrances to distribution.