Executives from small, independently-owned cable operators across the U.S. gathered at the Minneapolis Convention Center in Minneapolis from July 30 to August 2 for The Independent Show, the annual joint event staged by the National Content and Technology Cooperative (NCTC) and ACA Connects. Click below for a photo gallery from the event. 

The National Content and Technology Cooperative (NCTC), with partner ACA Connects, will stage The Independent Show, their signature conference, in Minneapolis July 30-August 2 amid a changing and challenging marketplace for NCTC’s more than 700 small, independently-owned communications service provider members.  

With major changes to the traditional video business, a continually shrinking subscriber base and increased competition from emerging technologies, NCTC executives said the conference will look to educate and inform member distributors who have their hands full keeping their future business prospects in line with the evolving landscape.

Multichannel News caught up with NCTC CEO Lou Borrelli and executive VP of programming Judy Meyka to talk about the state of the business and the co-op’s role in mitigating the myriad of industry changes both on the programming and technology side on the eve of The Independent Show. A lightly edited version of the interview appears below:

MCN What are the top issues NCTC members are facing going into the Independent Show? 

Lou Borrelli: As you know, the business has been evolving for several years now, from content being the main product driving the business to now being one of a few products. What Judy and her team have been doing is successfully navigating how we prepare for what our members will be thinking about doing going forward. The whole concept of declining linear customers is real, and we have some member companies — mostly the smaller ones — who have opted out of video and gone broadband-first. We’ve been looking at a wide range of solutions that would potentially provide choices to members based upon their size and based upon their strategy to have video as an essential product. Video may not be as essential as it was 15, 20, or 30 years ago, but it's still important. The key is it's evolving into something different where the economics are different and the customer relationship is different. Part of our job as stewards of the co-op is to figure out strategies and execution that our members can accept that give them a chance to keep going in this category.

MCN: Are you finding that most of the members are still supportive of the video business or are they looking to follow other distributors in partnering with a virtual MVPD for video while continuing with the broadband business? 

Judy Meyka: Unfortunately, it is a huge range of feelings, to be honest with you. I've said this before … if you ask 10 of our members, you'll probably get nine or 10 different answers. I think it depends on the history of the member. If they started as a cable company or a telco, or an overbuilder, it might make a difference in where they are now in the evolution. But we really have a lot of members who still believe in video — it might not look exactly the same, and maybe it should look even more different going forward. Some of our members definitely view vMVPDs as competition, but others view it as a way to offer their customers the kind of viewing experience that they want. It really depends on what their strategy is and how they feel about it going forward. There are definitely some of our members who are ready to get out of video; it just depends on who they are and where they are in their evolution and their process. 

MCN: For those members who do wish to stay in video, what are the biggest challenges they face in an evolving marketplace? 

JM: As I’m sure you’ve heard a billion times, the cost of programming continues to be a concern. They’re really focused on wanting to give the consumer what the consumer wants, and I think the consumer does want bundled programming, although I'm not sure what that bundle exactly is. They also want more programming but at a lower cost. That's obviously incredibly challenging in this day and age given the ever-increasing costs from the programmer side. I also think that one of the challenges is wanting to make sure that the consumer has the best user experience. We still have members who have analog systems, and we have a lot of members who have upgraded and want to make sure that they can keep upgrading that experience for customers, and sometimes that’s not easy to do on an individual basis. One of the huge benefits that the co-op offers is to give members the ability to upgrade to a better platform in an aggregated way. Obviously, competition is always an issue because there’s a lot of competition out there. Also, the large programming media groups taking value out of the linear channels by moving it to the direct-to-consumer platform is a huge challenge. How do we still maintain a product that has enough value and is worth what we and the consumer are actually paying for it?

LB: The reality is that media companies have been developing their direct-to-consumer platforms. It’s sort of like building a car while you're driving it down the road, and we are both the gas and the mechanics to keep their businesses running. For those of us that have been in the business on the cable side some 45 years, it’s rough, but I understand it. It’s not like I think they should never do it, but I think that if it were me and if we had the opportunity to talk about it years before they decided to go, we probably would’ve crafted a more elegant transition that would’ve provided a little less risk and a little bit more of the opportunity for us to continue to have an ongoing financial relationship.

MCN: With the continual change in the marketplace, what is NCTC’s role in negotiating deals for its members, and what are members asking you to do?

LB: We look at the industry holistically and look for the best opportunities for our members. That’s why we’re in the connectivity business and that’s why we’re launching MVNO [Mobile Virtual Network Operator-provided cellphone service]; that’s also why we’ve ramped up and retooled our group purchasing. For the bulk of our members, we are the strategic overhead that they can’t afford and the purchasing power that they can’t do on their own. We are the ones that can go out and evaluate technology, products, and services that frankly they don’t have the time to do or, especially for the smaller guys, don't have the expertise to do. We do a really good job of evaluating options and try to present them in a way where the members feel like they have some choices. We’ve been agile and I think we continue to figure out how we can be an essential service to the membership at large, not just a particular subset. 

JM: Even if the member doesn’t actually partake in these new technologies, deals or other things, we are a place that they can come to to get information, or ask questions or just ask if they are thinking about the right stuff. 

The National Content and Technology Cooperative said Monday that an unspecified number of people who attended the Independent Show conference in Lake Buena Vista, Florida, July 24-27 have tested positive for COVID-19. 

“It has come to our attention that some of our Independent Show attendees have tested positive for COVID upon returning home,” NCTC said in an email message to members. “We are alerting you so you can take the proper measures to self-test and should you test positive, to ensure you are taking the proper precautions and following CDC recommended guidelines.” 

The show was the first the organization, in partnership with ACA Connects, had held in person in two years. Highlights of the show included several panel discussions, the unveiling of the NCTC’s new name and the status of a pending MVNO wireless deal for member companies. 

Also: Borrelli Says New Name Emphasizes NCTC Strength 

COVID continues to be a factor hanging over travel and big gatherings. Out of caution, the Television Critics Association switched a planned return to an in-person summer press tour to make it virtual. Attendees of the recent Comic-Con convention in San Diego, too, shared on Twitter that they went home with COVID. 

“We take the safety of our members and staff seriously,” NCTC CEO Lou Borrelli said in a statement. “Out of an abundance of caution, we are alerting attendees that we have received reports from a small number of attendees that they have tested positive so that others may be proactive in the care of themselves and their families. We will not share any specifics due to privacy and other legal regulations and concerns.” 

Also: Former Congressman Gives Advice on How to Win Broadband Funding  

Prior to the event, NCTC had estimated that 150 to 170 NCTC and ACAC member companies would send more than 300 staffers to the show, and more than 120 exhibiting companies would send more than 300 staff members. ■  

LAKE BUENA VISTA, Florida — With more than $40 billion in federal funding available through state agencies for rural broadband expansion, most small cable operators are hard pressed to know how to navigate the bureaucratic quagmire. But one former Congressman has a simple answer — get to know the decision-makers.

The federal government is making about $42.5 billion in rural broadband grants available to companies through the Broadband Equity, Access and Deployment (BEAD) program, which will be administered through several states. At the Independent Show Tuesday session “Uncle Sam’s Broadband Bucks, Who’s Holding the Purse Strings,” and moderated by outgoing ACA Connects CEO Matt Polka, former Rep. Greg Walden (R-Ore.) suggested that to win those funds, small operators are going to have to learn how their state government machinery works.

“[E]ach state is going to be a little different, some will be better staffed and ready for this money,” Walden said. “You’re going to have to work and get to know who makes those decisions in your state and how do you take advantage of it.”

That means not just getting to know the heads of the state agencies that distribute funding, Walden added, but local and state legislators as well, who can be supportive in dealing with the various bureaucracies involved with each application.

“The extent to which you can build partnerships when you go in, [is] probably the better,” Walden said. “Most elected officials don’t like to choose among their children, so if you can move up, you’ll have a stronger case to make and they will too to whoever is going to make the decision in the state.”

Legislators on both the federal and state side also will have to work hard to ensure that funds go to the right companies, adding that stringent oversight was not a hallmark of past federal programs. But he was encouraged by the current BEAD structure.

“This is a much better statute,” he said.

Stricter oversight could be in store for the House Energy & Commerce Committee, which Walden chaired for six years before retiring on January 3, 2021. With expectations that there will be big turnover in Congress after the 2023 midterm elections, Walden was confident that friendly ears will abound in the House.

“Watch for Congress,” Walden advised, adding that typically the party in power loses 26 seats in Congress after its first midterm election.

“If your president has more than a 50% approval rating that number changes to 14 seats, if it’s less than a 50% approval rating that’s 36 seats,” he continued. President Biden’s current approval rating is about 38%.

“So I would look for a change of control, which means Republicans will take over,” Walden said.

Walden also had some advice for operators who are considering applying for grants to build out broadband services.  

“I would find out what your state has, if they have any kind of broadband buildout plan already, so they already have an idea about what they want to do,” Walden said. “I would also watch for other unmet needs.”

Walden added that in some large rural states, governors are worried about the overall lack of communications infrastructure in their states and could use the lure of broadband money to improve that. 

“They are going to try to leverage this to improve communications overall,” Walden said. “I think, especially in the big rural states, the Montanas, the Wyomings, they are really struggling to get adequate communications one way or another.” ■ 

LAKE BUENA VISTA, Florida — In unveiling the NCTC’s new moniker at The Independent Show here Monday, president and CEO Lou Borrelli said the change is in part an effort to emphasize the organization’s position in the industry and to ensure that its membership still has a strong voice.

The NCTC officially changed its name to the National Content and Technology Cooperative on Monday. It had previously been the National Cable Television Cooperative.

In announcing the switch on the Independent Show stage, Borrelli said the purchasing of programming will still be at the group’s core, but added that membership engagement is needed as the organization moves forward.

Also from The Independent Show: Small Ops Say Communication is the Key to Customer Experience

“Fundamentally, the relationship that we have as a co-op with our members is changing,” Borrelli said. “We've had a fairly passive relationship under the way the Co-op was formed originally with buying programming: We negotiate deals, you launch channels and then we wait until the renewal. 

“Our path going forward requires all of us to be more active and be more engaged,” he continued. “This is not a passive relationship anymore. It can’t be, because what’s happening in Washington with the money that is going to be flowing, what’s happening with technology and direct-to-consumer, we all have to be in this together active and involved. If not, it puts our sustainable future at risk.”

Borrelli added the co-op will still purchase programming and equipment for members, but added that its size has been overlooked in the past.

NCTC members represent more than 34 million homes, or one-third of all of the connected households in the U.S., he said.

“That puts us on par with Comcast and with Charter, and gives us a seat at the adults table,” Borrelli said. “We will be more engaged, more active in the industry, we will have a voice on your behalf, to make sure that the independent operators are not left behind in the conversation.”  

He added that NCTC also has great partners in ACA Connects, who do the same in Washington with legislators and with elected officials, locally, statewide and nationally.

"I couldn't be happier to be joined at the hip with them," Borrelli said. ▪️

LAKE BUENA VISTA, Florida — A panel of top small cable company executives said that while improving the overall customer experience is a primary goal for operators — especially as broadband competition heats up — maintaining a strong line of communication with customers is essential.

“I think A-plus-B equals customer experience,” said Buckeye Broadband president Geoff Shook at The Independent Show panel session titled “The Impact of Industry Evolution” and moderated by NCTC president and CEO Lou Borrelli. “I think the A would be customer service, but the B part that we have to zero in on is customer care. We have the opportunity as the more personalized provider to accelerate to accentuate the customer care, the fact that the service doesn't stop at the side of the house.” 

Schurz Communications chief technology officer Tom Williams added that it is essential that operators not only keep the lines of communication open with customers, but that they communicate in the way they want to. 

Also from The Independent Show: Borrelli Says New Name Emphasizes NCTC Strength

“Maybe they don’t want to make a phone call,” Williams said. “Maybe they want to do a text chat over their phone. They want to get the information and talk to us the way that they want to talk to us, not in the way that we want them to talk to us.”

Shook added that while communication is essential, techs and other cable employees should keep the message simple, direct and with as little jargon as possible. Sometimes, he said, too much information can “torpedo” the customer experience. 

“There’s a razor’s edge between too much communication and not enough,” Shook said. “We tend to not saturate but thoroughly communicate.”

Communication also means letting customers know in advance when there is going to be a service disruption due to planned maintenance or other factors, he added.  

“Bad news does not get better with time,” Shook said. “If we know that there is something intrusive getting ready to happen, in the field we like to make absolutely sure that we’ve communicated it thoroughly so it is not a surprise.”

Williams added that operators have to consider what messaging they are sending out to customers and be careful not to flood them with marketing messages that force them to overlook important service information.

“You can throw so many marketing messages out that they're not going to listen to the technology message of an outage,” Williams said. “There's a real balance you have to play there, or else their not going to listen to ‘There’s going to be a 5 minute outage on Tuesday night at 12:30 a.m.,’ and then they're online and it drops anyway, because you’ve sent so many marketing messages that they just delete all the messages coming from us.”

Conway Corp. chief marketing officer Crystal Kemp said it is important for operators to stress that customer experience isn’t just a priority, it is one of their core values.

“Because our priorities can change, our values usually don't,” Kemp said. “We are constantly putting that in front of people, in front of our employees, in front of our customers, to say along with reliability, along with innovation, along with all of those things, customer experience is a core value.”  

Operators also stressed the importance of their local presence, which gives companies a regular opportunity to reinforce their brand. 

“I’ve been to more franchise meetings than I care to talk about, but every single one of them they are appreciative of how local we are,” Williams said. “It is their residents that are answering the phones every day, or responding to a message or coming to their homes.” 

He added that it makes a big difference, especially when small operators are competing against larger operators that have huge bureaucracies and make it difficult for customers to access care reps. 

“It’s not hard,” Williams said. “You have to make it easy to work with. You want to delight your customer.” ￭

Grant Spellmeyer knows that he has some pretty big shoes to fill. 

Named CEO of ACA Connects in May, taking the helm from retiring CEO Matt Polka, Spellmeyer has extensive experience lobbying for the telecom industry: He comes from U.S. Cellular, the mobile arm of ACA member TDS Telecom. 

Polka officially ends his 25-year tenure representing smaller, independent cable operators at ACA Connects this month, culminating in The Independent Show July 24-27 in Orlando, Florida. In the meantime, Spellmeyer has been busy making the rounds, meeting with individual ACAC members and companies, as well as National Cable Television Cooperative CEO Lou Borrelli, learning more about the cable business and listening to what his members feel is most important to the industry. 

Spellmeyer took some time out earlier this week to speak with Multichannel News senior content producer – finance Mike Farrell. Here's an edited transcript of that conversation.  

MCN: What drew you to this job?

Grant Spellmeyer: There are a couple of factors. First, personally for me, it was a good time in my life to make a switch. But more importantly, I have always held ACA in the highest regard as the premier communications association for what I’ll call non-national providers. Many of them have their roots on the cable side, some of them from the telephone side, some from the cooperative side, some from municipalities. And it is certainly a changing industry. I’ve had the opportunity to know Matt Polka and to work with him quite a bit during the last 15 or 16 years that I’ve been active in the telecom scene in Washington. I’ve watched what Matt and the team have done, they’ve certainly had a long series of wins along the way. I came from U.S. Cellular, which [is] a non-national wireless carrier, midsized — they operate in 21 states — kind of a scrappy competitor. That’s what ACA is full of, a lot of small and medium-sized communications providers who are a little bit of the underdog in the world of Washington, D.C. It was a nice fit from who I get to represent at ACA Connects and the fact that they’re just really good at what they do. They’ve got a good team and I’m excited to be here.

Also: NCTC CEO Lou Borrelli Talks Connectivity Exchange MVNO Deals and the New Name 

MCN: It seems like a lot of the issues that are important to telecom companies are important to cable companies — broadband wireless and the like. So it seems that this job is right in your wheelhouse. 

GS: I think it is. I don’t come with an extensive cable background, although I’ve been busy learning and there are no concerns that I can’t get up to speed on those issues pretty quickly. At least right now, and for the next few years, this is all about broadband. That’s issue No. 1 and I have certainly spent a lot of the last 15 years working on broadband issues, universal service issues, government funding of the provision of broadband in hard-to-reach areas. Issues like mapping I was all over on the wireless side, so I’m pretty fluent in those things. The broadband guys want to get into the wireless business and the wireless guys want to get into the broadband business, and so I see it as a good opportunity to help the association navigate whatever is going to come in Washington and around the states in the coming years. 

ACA is working well. I’m not here to fix anything that is broken. I’m here to carry forward the legacy of success that Matt Polka has put in place over the past 25 years. I don’t think I’ll be lucky enough to break his longevity streak. But I certainly hope to take what he’s built and continue it and adapt it as the industry changes and the regulation landscape in Washington changes. Matt and I are friends, he’s been very gracious to me in the onboarding process, helping me get up to speed with learning the members and learning the issues. And of course, we have our show coming up next week, so that’ll be a new opportunity to go down and experience that. I’ve been to Kansas City to meet with Lou Borrelli and the team at NCTC. Those were good discussions and we’ve got our joint show, and I’m looking forward to what the future has to hold there.     

MCN: In your travels to meet the membership, what are the biggest issues on their minds?

GS: In terms of issues, there are a couple of things I have heard. Broadband would be the most important. There are concerns about how governors and federal agencies will distribute money both from an offensive and defensive perspective. Some members want to get a hold of money, other members are very concerned about being overbuilt in areas that already have coverage that meets the standards under the law. We’re going to be working with NTIA and the FCC and the governors and the state broadband authorities about that. 

The second thing I would flag is the issue of the broadband data collection maps that are due to the FCC by September 1. There was a lot of concern over the FCC requirement that a professional engineer certify the maps. We, along with some other associations, were pushing the FCC to produce some clarity to that and to relax the requirement that everybody go out and engage a certified professional engineer in the state, because in many states they’re not there and certified engineers don’t have the skill sets that are necessarily required for telecommunications. The FCC issued a bureau-level order clarifying that provision and we were very pleased with that, our members were very pleased with it. 

And thirdly, there is retransmission consent. It comes up everywhere I go. I don’t think that’s the No. 1 issue right out of the chute in the next couple of months at the FCC, but they do have some proceedings underway that are looking at certain issues related to retrans. 

MCN: Are you optimistic that you’ll get some traction on the retrans side after all these years?

GS: I think it's more of a long-term play. I think as the cable industry continues to evolve, there are going to be a lot of reasons for the FCC and potentially for Congress to revisit the rules associated with it.

MCN: Going into the show, what’s your take on the industry? Obviously things have changed a lot. 

GS: Keeping in mind that I am still learning the industry and I certainly haven’t talked in depth with a good number of the majority of members — although I have talked to companies that represent a majority of members — I think they have adapted well. They were fortuitous enough to see some of this coming and shift focus to broadband. I expect that to continue. Traditional video cable subscribership is dropping and is likely to continue for a while, but I think folks have adapted really well to it and we will see where it goes over the course of the next decade. But nobody has come to me and said “Grant, you’ve really got to fix this for us because we’re all going under otherwise.” 

People are optimistic, people are very excited to be coming together for the first time — this is the first time since 2019 that we’ve done The Independent Show in-person — so there is a lot of pent-up demand, and I think a lot of my members enjoy the opportunities to visit Orlando with their families. I think everybody is going to have a good time, and hopefully learn something about the state landscape at the moment. And we’re going to celebrate a little bit. It’s a farewell for Matt, and a lot of folks have spent the past 20, 25 years working with Matt, so it’s going to be special from that perspective.

Hopefully they will come away [from the show] going “that Spellmeyer guy seems like he’ll do a good job and let’s charge forward to the future.”

MCN: Is this your first Independent Show? One thing that has struck me about this show, in particular, is that there still seems to be a fair amount of business going on, and members see this as an opportunity to share ideas with other operators.  

GS: It will be my first one. I don't have the frame of reference that I wish I did. ACA used to do a Summit in Washington that was more Hill-oriented, and I’ve been to that a couple of times, but this will be my first time at the Independent Show. From everything I’ve heard, it’s a nice size, not as big as the Consumer Electronics Show, where you’ve got 100,000 people running around Las Vegas. I’ve been to 5,000-person and 10,000-person  trade shows and those are challenging to get any real business done because you can’t find anybody. This is different because it’s one hotel, it's a good size and if you want to track somebody down within the course of 48 hours it’s pretty easy to do so. And that facilitates lots of dialogue and I think that’s what Lou Borrelli and I are after, in terms of where we want to take this show in the future. There is a value to it that is significant, part of it is meeting with vendors and part of it is talking with other members and I think a lot of both of those will be going on. 

MCN: At the same time you’ve got to keep your eye on the historical issues in the industry, like retrans and there is talk of another net neutrality bill on the horizon. 

GS: We’re going to keep our eye on that and there are lots of potential changes coming to Washington after the elections this fall, one way or the other. There are a lot of members not seeking re-election, so I expect a new landscape there. I’ve spent a lot of time on Hill-related matters, and I’m not going to take my eye off that or the retrans ball. I’ve got a good team and we’re going to do good things with it. 

MCN: NCTC hired a new CEO in May 2021 [Borrelli], and you started this May. Do you see the relationship between ACA changing as leadership has changed? How do you see it evolving?

GS: I have spent time with Lou and he seems to be a very, very skilled industry veteran. I think he was the right choice to run NCTC. He’s got a 40-year background in the cable industry that I don’t and I think he is doing and will continue to do really good things at NCTC. We have talked about things like ways to work together additionally amongst our significantly-shared membership, educational opportunities, regional meetings. 

We’ve kind of agreed to get through the show in Orlando and have a more fulsome discussion about what 2023 looks like. But I am all in favor of finding ways to collaborate and they serve the members a whole lot from an operational purchasing perspective and I think we do a really good job on the educational policy side. It’s a good team. We’re going to have some fun together next week. ■

The thermometer reads into the triple digits at the NCTC’s Lenexa, Kansas, office on a late-afternoon June Tuesday, and Lou Borrelli has his sleeves rolled up.

Now 13 months into his tenure as CEO of the National Cable Television Cooperative, the veteran cable executive has been busy transforming the entity, once almost entirely devoted to program-licensing negotiations for its smaller cable operator constituents, into something more useful for cable’s more consolidated connectivity age.

Choosing an odd metaphor for such a hot day, the part of the NCTC’s iceberg poking out of the water is The Independent Show, which is finally set to conduct its first live, in-person event of the COVID-19 era, convening in Orlando, Florida, July 24.

Exhibition space is sold out, Borrelli said, and he expects to exceed the attendance numbers of the NCTC's last in-person convention back in July 2019, and the metrics of the 2018 event, as well. He calls the Independent Show the “last big cable convention,” and he might be right about that.

One of the big unveilings at The Independent Show this year: The National Cable TV Cooperative will have a new name.

“I’m not going to tell you what it is,” Borrelli said, guessing Next TV's next question. “I haven't even told my people what it is yet.”

The name will convey the NCTC's new priorities and focus — a transitional crossroads already traversed by the now-merged SCTE and CableLabs, among other groups serving the cable industry.

In short, what was once a thriving constituency of small, family-owned companies four decades ago when the NCTC was formed has whittled and consolidated into around “700-plus” operators, many of them having forsaken the long-since-very-profitable business activity of bundling TV channels.

Borrelli, a New England native whose last job in a cable industry players uniform was leading Kingston, Jamaica-based Digicel's cable broadband operations, has worked with the NCTC board of directors to come up with some clever initiatives.

Prime example: “The Connectivity Exchange,” which unifies NCTC member companies into singular network platforms, able to pursue big national RFPs.

“Collectively, we represent 40 million digital connections, a third of the country,” Borrelli explained. That, of course, is bigger than either Comcast or Charter Communications. And the beauty of it is, the NCTC can “fill in the holes” for the RFPs the big cable companies go after, too, seizing "complimentary" opportunities.

“If the USPS is looking to get connectivity for 1,000 post offices, we can bid,” Borrelli explained.

NCTC is just getting started with the Connectivity Exchange, which will be amply showcased at the Independent Show. ■

Dialing in to MVNO Deals

Meanwhile, another big Indy Show topic will be MVNO deals, something the org board and constituency have grown increasingly interested in lately as they observe the mobile growth happening at Comcast, Charter and Altice USA.

Negotiating these wholesale wireless network deals has become less and less complicated, Borrelli said, with many of the technical and business hurdles now out of the way.

Video tech is still a big focus for the group, as well — for example, NCTC has been talking to Comcast about licensing Xfinity Flex for its members.

“They could be in Walmart, they could be in Best Buy, they could be wherever,” Borrelli said “But I think we could be very helpful in distribution of that technology.”

“We’ll be ready to go next month,” he added, noting Orlando’s showcase. ‘We’ve hit all our targets.” ■

The Independent Show, slated to return to live-and-in-person for the first time in about a year, has told its members that the conference, slated for Oct. 5-6 in Minneapolis, will now be held virtually.

This will be the second virtual Independent Show -- the 2020 conference was also held virtually because of pandemic concerns. Although the show’s organizers -- the National Cable Television Cooperative and ACA Connects -- were enthusiastic about returning to an in-person format (this year's show is titled "The Power of Together"), concerns about the COVID-19 virus (and its delta variant) forced their collective hands.

“After thoughtful discussion, ACA Connects and NCTC decided to take the Independent Show online next month because of difficult planning issues despite strong enthusiasm for such an important industry event to take place in Minneapolis. It’s the correct decision, with broad support from both ACAC and NCTC members,” ACA Connects Chairman Patricia Jo Boyers said in a press release. “I’m positive the online event will be a smashing success.”

Other industry events that had also been slated to be in-person have pulled back to virtual status because of concerns over the pandemic as well as continued business travel restrictions. In June the Cable Center said it would hold its Hall of Fame celebration virtually in October. Earlier this month, it pushed the date to Nov. 15. Last week, the Mid-America Cable Telecommunications Association said its annual conference would be held virtually as well. 

TIS organizers had planned several COVID precautions, including requiring attendees show proof of vaccination or provide a negative test for the virus prior to the meeting, that face masks be worn indoors at conference events regardless of vaccination status and that social distancing be practiced. The organizers had also planned to live stream sessions so members could watch the events from home or at the show.  

But that apparently was not enough to quell concerns.

“COVID-19 and the Delta variant have been a moving target. While our plan was to finally meet in-person, it has become more and more clear that it was not the responsible thing to do,” NCTC CEO Lou Borrelli said in a press release. “Nevertheless, the online show to me is a can’t-miss program, and I greatly look forward to seeing friends and members on the big screen.”

Rich Fickle joined the National Cable Television Cooperative in 2011 amid what was a trying time for the small cable operator buying collective.  After its former CEO left, there was a growing sentiment among smaller operators in the membership that their needs weren’t being met, and that larger players were dominating what had been started in 1984 as a way for small companies to band together, share ideas and buy equipment and programming with a single voice. It took some time, but Fickle and his team managed to turn the NCTC around and refocus the operation toward its original mission. Now after 10 years, Fickle told the NCTC board that he will step down before the end of the year, ending one chapter in his 40-year cable career, and perhaps opening a door to the next. Fickle spoke with senior content producer -- finance Mike Farrell about his legacy and plans for the future. An edited transcript follows. 

MCN: What brought this decision about?

Rich Fickle: It’s the longest job I think I’ve had, ever. I’ve worked for affiliated companies doing different things every three or four years, but I think this has been the same job  for 10 years. I guess maybe part of the answer is I always enjoyed tackling new things and changing the scenery a little bit to keep growing myself. But the other side of it is I think it’s healthy for this organization to also bring in a fresh perspective. As you get a little bit older you want to give a little bit of a different allocation of time for work versus other things. I felt like I was less willing to put in the 60-70 hours a week for certain things than probably should be in this role. So I said, ‘I need more flexibility and time.’ 

I’m still hoping to stay engaged in some way with the industry, but that’s a marketplace kind of opportunity. If it doesn’t happen, I’m OK with that too. 

Is this a retirement for you?

RF: I don't think it will be. It could be? It’s kind of like you’re going through a door and you really have very little idea of what’s on the other side of it. I committed to staying engaged through the end of the year. The reality is I think they’ll find a replacement within a few months. And then I’ll be helpful to that person for some period of time -- maybe a couple of months -- and then just kind of be available for the rest of the year.

It’s sound like this is something you’ve been thinking about for awhile.

RF: There wasn’t any disruptive, conflicting or change-of-life condition. I think it’s just my DNA. I kind of want to not do the same thing in one place forever. I value the learning and challenges of new environments and various things to put effort into. I think I’m happier doing that. Some people are happier knowing what they are going to do every day, and it’s very predictable. I’m just not one of the ones to do that. 

When you joined 10 years ago, NCTC was in a little bit of turmoil and there were questions concerning which direction it would take. But you seemed to bring a sense of stability pretty quickly to the organization. 

RF: I don’t know if I can opine on what I did as opposed to what a lot of others contributed. Let me answer it this way: I would say, yes, 10 years ago there were some distinctive challenges. There was a board that wasn’t as unified as it is today. You had members on the board that contained representations from some very large MSOs and some very small MSOs. And there seemed to be a lack of unity because they have some different views, are from different worlds that are pretty dramatic. You want some of that, but you have to have a balance there. That was one issue. I think the other part of it was there were certain parts of engagements with the other parts of the industry -- CableLabs or SCTE or even the other associations like those that represent the telco or fiber based providers -- that felt alienated in their relationship with the NCTC. I can't go into the story of why that happened, but one of the things we tried to do was change that, because the industry has always been  stronger when people are working together.  

The other notable shift that we tried to incorporate fairly quickly, is that the members [and] organizations had to feel like they were not disenfranchised. Small ops felt like the NCTC may have changed allegiance to focus just on the large companies. We worked hard to try to rectify that. Some of that is just the perception, because there’s a void in communication that creates those impressions sometimes of not being important anymore. But there was some reality to it as well.

The membership was a little bit unsatisfied, or feeling like this is no longer the co-op they remember. There's those things that were almost immediate challenges. Financially, there was probably a different mindset around how to manage the balance sheet. A long time ago I was a CFO and it’s just kind of ingrained in me that if you have an organization, you’ve got to  have to have a bit of staying power for opportunities and rainy days. So we had to do some work-throughs.

The plus is that the co-op was founded on a very solid foundation of a true cooperative spirit with entrepreneurial  independent companies wanting to collaborate and an employee base that had a really clear mission about trying to help small and medium sized operators really be successful. And that mission is very well ingrained and people love getting up in the morning feeling like they contributed something meaningful. Those types of things, the member mission, the spirit of the co-op, the entrepreneurial mindset, was so strong that it helped us make changes relatively quickly because there was that common ground. It’s been a good team that contributed that. We’ve had fantastic board members. We have 14-to-15 of them at any given time, so it’s a large board. But after that first year, we had a board that was much more unified. That creates a whole different dynamic because you can become so distracted by governance that is in conflict that it ripples through everything you do. I feel for the last nine years we’ve had a really, really good, supportive board. 

And we’ve had a lot of fun too. We decided to step up our game on the shows and open it up more; it was very limited attendance. We opened up the checkbook to bring in more talent, more events, because having people being able to enjoy each other's company and collaborate and build relationships is hard to measure but it’s foundational. I think it paid off. We all enjoyed that capability. COVID has kind of iced a lot of that for the more recent events, but we do want to go back to it. 

Let’s talk about the Independent Show. It seemed you were stepping things up when everyone else was stepping back.

RF: If you look at it from the larger cable operator perspective, their support of shows [and] things like that was huge dollars. They had to question themselves, the rationale for that investment, as they consolidated and grew bigger. But the NCTC group of companies hasn’t really changed that much. I think when I first joined there were roughly 700 companies, today we’re just north of that. Given the change of the last 10 years and we’re dealing with roughly 700 companies, that’s pretty amazing. We’ve had consolidation, we just keep adding new companies into the mix. There’s always been this fragmentation problem that we help solve by providing venues to help suppliers and other interested parties to work together.

The other change is the programming world has changed dramatically. The large programmers have consolidated, they have less of a need to attend shows, they’ve cut back on their affiliate staffs, but they still see value in attending, participating and supporting, which is great. The other thing we did is we expanded the scope of our supplier community to include a lot more technology partners. The size of that group of companies and the size of dollars flowing through the NCTC, I’m pretty sure, has doubled. We emphasized more of that in the last few years, and it’s growing at a very fast rate. 

As we shift more and more resources into broadband, we are not abandoning video and programming, in fact we’re growing there, but we made an intentional effort several years ago to be more tech friendly. Because a lot of the solutions that the large guys were getting behind from an R&D perspective were great for them, but it doesn’t work well for smaller markets. 

There's a divergence too. A lot of our companies come from different backgrounds. They  may be telco-centric, they may be municipalities, they may be new entrants coming from a whole different world based on fiber. But all of them have kind of taken a fresher perspective. They are early adopters of next generation network technology like fiber to the home, much more than some of the large guys that have had such huge investments in coax and DOCSIS technology. Fiber growth has fueled a lot of companies entering the business, because fiber is so powerful with broadband. Broadband seems to be a natural companion with video. Broadband is kind of the lead horse, but programming with video content is essential to customer relationships, especially in Tier 2 or Tier 3 markets. They kind of go hand in hand. We expanded and will continue to expand heavily in supporting the broadband side of that.

In the last few years, there has been an effort by the NCTC to help smaller operators that wanted to make the transition to broadband-only or at least broadband-mostly, more smoothly.

RF: You’re right, there are operators that want to transition to fiber. That’s interesting and a problem for a lot of these guys. A lot of the major fibercom providers didn’t know how to talk to cable operators, they were used to dealing with telcos maybe more than cable operators. We merged those worlds, or at least tried to help do that. So today we have five large providers of fiber technology and materials that we have done fairly good sized stocking deals with, because we know that area is exploding. We have a lot of capacity to serve members with that supply chain. We have three com deals with major providers of that technology, maybe have a fourth soon. And then we’ve done a lot on the DOCSIS modem side as well. That’s been there for a long time, but we also shifted more toward IP video support, we launched a key partnership with Plume around managed WiFi for the home, we’re going to do more of those types of things for the home network. We’ve got a circuit program now where we have multiple national carriers that supply circuits to our members. It’s a natural point of help for  members because we can aggregate those opportunities across the entire U.S. for them to have connectivity with different carriers and hopefully better terms. That program kicked off about a year and a half ago and it’s going well too. 

There’s more to come. Who knows what a successor will do, but we’ve got a road map of probably a half a dozen items that if we could do them today, we’d do them. There’s only so much time we have to work on things. But there’s a rich set of additional things we can do to help members, especially on broadband.

You’re also helping members with retransmission consent negotiations.

RF: I’m glad you brought that up, because programming and video is still pretty darn important. And if you look at the numbers we’ve actually been growing every year. How much programming we transact, on the retrans side specifically, we started with retrans deals that were tied to large cable network agreements. I think it was either ESPN or NBC that was the first because they had O&O retrans capabilities, that was probably five years ago. Just over three years ago, we did a handful of station group deals. We jumped into that pool. Then in this last round, we more than doubled that. Now retrans is a significant part of our portfolio of programming deals that we work on. These are tough. It probably is one of the biggest pain points for our membership base because of the cost of retrans and a lot of changes with programming content and station group consolidation. But it’s been very successful over the last two major renewal cycles to increase our presence on the retrans side. I suspect we will continue to do that. And I hope the station groups will see value in that too because we’re able to hopefully make it more sufficient for them to reach a large number of operators across the country.  

Even on the general programming side, last year we did 36 deals, some are renewals some are brand new, we still support entirely new networks. When I first joined the NCTC, we were lucky to get four deals a year done.  And we haven’t changed the size of the team that manages the programming side. [EVP of Programming] Judy Meyka came on a year or so after I came on. She’s done an incredible job of doing a lot of those transactions, she’s very effective, she’s built a good team. It’s really quite rewarding to see how much productivity we have on that side of the business.

One of the criticisms of the NCTC before you got there was that larger members could pick and choose which deals they did on their own and with the co-op, which some members saw as limiting your negotiating leverage. How did you change that dynamic?

RF: The way that structure worked created several problems, where larger members could almost sit at the table and see where the NCTC was going with certain deals and make decisions on whether they would pursue their own deal at the eleventh hour and even before that. That creates this uncertainty, not only for our membership and our negotiations, but think about it from the programmers’ side. The programmers were upset because they felt like ‘I have to negotiate twice with this large company, give them the benefit of seeing things coming through the NCTC and then that allows them to be more informed on their negotiation strategy.’ They felt like it was unfair. I actually agreed with them. 

It’s an imperfect world because you always have to provide choice to any member to do their own thing, and we still do that today. But we now have  structures in place that say, ‘If you want us to negotiate on your behalf, we can be effective if you commit to us today that that’s what you want to do.’ If you don’t want to commit to do that, that ‘s fine. Do your own thing, no hard feelings. But we didn’t have that before. 

So now we’re asking on major deals for members to be able to commit that they’re going to allow the NCTC to go through the negotiations. They’ll be a part of it, they’re not going to disrupt it, they’ll be supportive of it. And that has created a much, much more trusted process for both our side of the table as well as the content providers. And, yeah, there was a little bit of resistance or hesitancy to do that for various reasons, but it’s worked out.  

Do we still have large companies that still want to do their own thing for certain types of agreements? Yeah, but that’s OK. We’ve actually had more of our larger members rejoin some of our larger deals than we have the other direction where they exited on renewals. Our net track record is a positive in terms of large operators being involved in major programming deals.

We have to prove ourselves. We have to deliver value. We’ve never taken the approach that if you’re a member, you have to sign this secret oath that you’re going to do everything through the co-op. We feel like we have to earn it. If members don’t see the value in the short term and the long term of supporting that structure, then they probably shouldn’t be members. There are always situations where it does make sense for operators to consider doing a little something different for themselves. And that’s fine. 

With retrans and regular cable networks, you can go as a united front and say you represent however many millions of subscribers you represent -- at one point it was over 25 million.

RF: That depends on how you do the accounting on some of that, but that was when we had some very large MSOs involved. I always look at the level of participation as opposed to the theoretical level, how many subs are actually participating. I don’t think we ever had that number exactly from that definition. You had that number from the aggregate number of companies that signed a membership agreement. 

Can you say how many you represent now?

RF: I would say in general our larger deals probably hover anywhere from six to 10 million, which is still pretty notable in the world of consolidated companies and so forth. It could be a little less on certain deals, but that’s the general idea. 

Is it different when you’re dealing with retrans? Or do you just do national O&O deals?

RF: No, we’re doing the station group stuff. So you can think about large station groups like Sinclair and others. I think we make more sense for both sides if it's a large station group as opposed to one that only has a few stations and only affects a  few members. I think we are very focused on trying to help large station groups and large groups of  members that are part of that.      

We started off with the O&O stuff five years ago, a little bit over three years ago we did our first set of station group deals. This last round at the end of 2020, we essentially doubled the size of the station group deals.

Are you expecting that to grow?

RF: Yes. I think it’s been successful. It’s painful because they are hard deals. I think that most members see value in us helping them with that. And I think the stations see value in that efficiency as well. 

In 2017, you reached a deal for members with Mobi TV, which is going through a Chapter 11 restructuring, but it looks for now that the relationship will continue.

RF: Mobi has done a fabulous job for a lot of our member companies and it’s been embraced in a fairly quick way. Yes, Mobi is dealing with some financial issues. There are a lot of reasons for why that happened, but one of the most easily understandable ones is that they were counting on fairly high growth on their platform last year. They had been in the market long enough that a number of cable operators had been launched and the pattern for  operators to step on the gas and convert legacy video systems to Mobi seemed to be in alignment. So 2020 was supposed to be the growth year. 

COVID hit and cable operators found it very challenging to do anything that involved getting into the consumer home to switch out video systems. You combine that with the fact that the demand for broadband went through the roof in most of these markets, so operators had to reshift the resources to focus on that broadband growth and network reliability. Mobi, unfortunately, became impacted by that negatively. The growth just didn't happen. 

The good news is I think these operators are back in the saddle, trying to move forward to reignite their growth on Mobi deployments. But Mobi first has got to get through this financial restructuring and/or sales process. Chapter 11 activities are somewhat opaque. They’ve got a relatively short time to work through this and we’re very supportive of them and glad to help Mobi and/or other companies that are willing to help Mobi through investment. We’re super-supportive of them. I think our members have felt like they’ve done an excellent job. So we’re engaged, there are some areas I can’t talk about because of NDA stuff, but I can say that Mobi has been a super service and it’s been great for small operators and some of our large members as well.

Looking forward to the rest of this year, is there anything you want to do or accomplish before you hang it up?

RF: There are probably a lot of things I want to do but I probably will not get to do. Time seems to be slipping away faster than I thought. I guess it comes down to do the best I can to help the new CEO. If there are projects or things I can do to help them with after that, somewhere in that ecosystem, I’m glad to do it, but I feel like I’m probably more limited in terms of the impact I can have for the rest of the year, other than just making sure that we’ve got a really good direction set with the new person being there at the NCTC. 

Will you help with the search?

RF: We retained a search firm, Carlsen Resources, one of the best in the business. [They’ve] been working on it for a while now and I think have surfaced some good candidates.

Do you think you’ll have a candidate soon?

RF: I think so. I think the plan is to have somebody hired and in place maybe within the next six-to-eight weeks. Maybe it takes longer. Maybe it might be June before they actually can take all of the reins, but it is in that time frame. 

Is there anything you're most proud of during your time at NCTC, and is there anything you wish you could have done while you were there, but couldn’t? 

RF: Proud, in my book, it’s a team thing. I guess the pride is from the standpoint that member companies, in many cases suppliers, and our staff rallied to address challenges and also to seize opportunities. When I first started in the cable industry a long time ago, that was the norm. But as the industry evolved and large companies emerged, the cooperation with the industry was diluted. Larger companies had a mindset of their own R&D, their own capabilities, less willing to share. The experience at the NCTC, which I think we helped contribute more to in terms of building up that level of cooperation, is wonderful to see. Because it’s kind of the way I started my career in the industry and probably the way I'll be ending my career in the industry, which is seeing an uncommonly high level of cooperation for the common good of building a better business. How many times can you see opportunities like that? I feel very grateful.

On the wishful side, we have 700 companies and there are all types of ownership structures. Some are public but a lot of these companies are also third- or fourth-generation family-owned companies. The richness of the ownership and the people who lead those companies is amazing. My biggest regret is somehow I never seemed to make enough time to have developed more of those relationships in depth, because these people are amazing, 

If I had somehow a chance to do it over, I would try to figure out ways to shift time to be more with those folks. Just a personal thing, they’re just amazing people.  To hear the stories of all the challenges they had and running these companies successfully for years and years and years. 

Is that your advice for the next person that comes in?

RF: Yes. I regret not doing more of it. I think I did OK at it, but regret not doing more. I think it’s a foundational element of trust that is essential for a cooperative to be successful. People have to get to know you. And I think it's enriching in both directions.    

The National Cable Television Cooperative and ACA Connects said Wednesday its 2020 Independent Show will be a virtual online event.

NCTC said the “reimagined” virtual Independent Show will take place Sept. 29 to Oct. 1 and will feature national, industry and political speakers. The theme of the six-hour, three-day event is "Trailblazing in a Digital World," and will bring together nearly 1,000 industry professionals from across the country, the NCTC said. 

"The goal is to help independent providers better understand the changing landscape of broadband Internet, advanced video and other technical and policy issues in a post-COVID 19 world, including in the marketplace, on Capitol Hill and at the Federal Communications Commission," NCTC  said in a press release.

The 2020 Independent Show event was originally scheduled for July 26-29 in San Antonio, Texas, but was changed due to restrictions due to the COVID-19 pandemic.

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“We’re very excited to bring our members together once again for our 15th annual Independent Show, and while this show will be different from all of the others it will be the same in delivering the best information that will help our members meet their communities’ broadband and video needs in our new normal,” NCTC CEO Rich Fickle said in a press release.

CNN political analyst Ron Brownstein will lead a keynote session on politics today in America and the upcoming 2020 election. A full schedule of speakers and sessions will be announced soon, including political, regulatory and industry leaders, member presentations and breakouts, and a review of the key business and policy issues facing NCTC and ACAC Members.

Related: Cable TV Pioneers Names 2020 Class

“Our members have delivered the broadband promise during the COVID-19 pandemic, but the political and regulatory stakes are higher than ever, and that’s why we’re glad to meet at #TIS20 to cover these important issues,” said ACA Connects CEO Matt Polka in a press release.

Registration opens July 20. More details are available at The Independent Show website.  

CHICAGO — Broadband, OTT, the fight against onerous and outdated regulation and a pep talk from an unlikely source — a programmer — were all a part of the 2019 Independent Show, the yearly gathering of smaller, independent operators here.

This year’s theme was “Ignite” and the return to Chicago appeared to be a charm — the show was first launched 14 years ago in the city under the theme “Winds of Change” — with hundreds of operators, programmers, equipment vendors and their families making the trip to the Sheraton Grand Chicago hotel. The 2020 show will be held in San Antonio, Texas, July 26-29.

Viacom CEO Bob Bakish became the first major programming CEO to headline a keynote session at the show, and although he noted the sometimes contentious relationship his company has had with small cable in the past, came to mend fences with operators.

Fixing ‘Frayed’ Relations

Bakish admitted that Viacom’s past dealings with small cable operators have been “frayed:” Cable One and Suddenlink dropped the networks in 2014. (Only Suddenlink eventually renewed.) Since Bakish came on board in 2016 and focused the programmer on its six core brands, though, Viacom has worked hard to repair that relationship.

“[W]e stepped back, evaluated the situation to figure out how we could work with distributors in a more partnerly way,” Bakish said, which he determined would be to expand the scope of the distribution relationship, including licensing linear feeds and VOD content and exploring deeper relationships on the advanced advertising front.

“Since we’ve done that, we haven’t gone dark with anyone, we’ve renewed or extended the vast majority of our traditional sub base, we’ve actually increased our distribution and we’ve gotten access to plant for advanced advertising,” he added.

Bakish expects that relationship to evolve to its new acquisition, with Pluto TV becoming a successful complement to cable broadband service.

“The reality is, all of you have footprints and markets all around the country in all different-sized markets,” Bakish said. “There is great power in that, because you have those local consumer connections. I don’t want to go build those. I would rather work with the people that have them and figure out how, working together, we can grow our businesses.”

Regulation, as always, was a big topic at the show, with former Bush White House press secretary Ari Fleischer urging operators to continue to pressure regulators on issues important to their businesses.

“If you’re not involved, you’re going to lose,” Fleischer said in a Q&A with ACA Connects president and CEO Matt Polka, adding that particularly with complex issues like net neutrality, few members in the House and Senate fully understand the issues weighing on the industry. “The only way they will believe in you is if they see you, they hear you and they feel you. Activism is at the heart of what you have to do.”

Former NCTC chairman and retired MCTV chief Bob Gessner kicked off the conference with a CEO panel featuring top executives in the small cable space — including his daughter, MCTV president Katherine Gessner, who pointed out just how powerful offering a compelling high-speed service can be.

Katherine Gessner said MCTV began overbuilding its network with fiber-to-the-home in 2014 or 2015 and last year began acquiring a few small properties near its traditional service territory. Upgrading those systems has resulted in strong broadband growth, she said.

“We shut off the analog plant in the first system in November and went from 0% internet penetration to about 20% in about seven months,” Katherine Gessner said. “It really opened our eyes to the need for rural broadband.”

OTT, SVOD in Spotlight

OTT and SVOD products also garnered some attention from small operators. In a panel session titled “Kindling and Sparks … Getting Your OTT & SVOD Strategies Blazing,” Vyve Broadband senior vice president of marketing and customer service Diane Quennoz said the days when every pay TV provider’s video packages were the same are over.

“The challenge is picking the right horse,” Quennoz said. “TV can’t be the same way it was three, five or even 10 years ago. Viewing habits change. The challenge is we have so many different carriers.”

Cincinnati Bell director, programming and content Jonathan Bond pointed out the difficulty that smaller operators have when dealing with mega-companies like Netflix.

“Netflix called us ‘cute’ when we had 300,000 video subscribers and 170,000 broadband subscribers,” Bond said. He was not optimistic that the SVOD pioneer’s recent subscriber losses — it shed 130,000 domestic customers in Q2, its first period of domestic subscriber losses — would make it more receptive to smaller operators.

“Probably not,” Bond said. “It would probably take multiple quarters [of declines].”

Chicago -- Former White House Press Secretary Ari Fleischer urged small cable operators to keep up the pressure on Washington legislators on key issues facing the industry, telling an audience at The Independent Show that their continued activism is key to their success.

“If you’re not involved, you’re going to lose,” Fleischer said in a Q&A with ACA Connects president and CEO Matt Polka, adding that particularly with complicated issues like net neutrality, few members in the House and Senate fully understand the issues that are weighing on the industry. “The only way they will believe in you is if they see you, they hear you and they feel you. Activism is at the heart of what you have to do.”

Earlier, Fleischer gave his take on the successful campaign of President Donald Trump -- he said that unlike Democratic candidate Hilary Clinton, Trump appealed to blue-collar workers who believed they were being ignored by Washington -- and predicted that the 2020 presidential election will have record turnout.

Fleischer went to bat for small cable operators who have endured criticism that they shouldn’t be trusted with something as vital as the internet, adding that the actions of smaller operators speak louder than words.

“If ever there was an issue where the attacks on your position were exaggerated, it’s this one,” Fleischer said of the net neutrality debate. “As if the FCC’s ruling destroyed the internet? I do think you have history on your side to show that the opposition was wrong. That’s a good starting point.”

Fleischer suggested that cable operators continue to make the case of providing what consumers want, stressing that “superb” customer service is essential.

“If people call you the local hometown provider and they think they are falling into the same type of consumer responsiveness that they get from the giant cable providers, then you haven't differentiated yourself. If you believe in your small town, in touch, local community base, the people who answer your phone and help your customers have got to provide that service, otherwise it rings hollow,” he said.

Fleischer, who had his own disagreements with reporters during his White House tenure, touched on some of President Trump’s criticisms of the press, adding that his assertion that the press is an “enemy of the people” is unwarranted.

“No, the press is not the enemy of the people,” Fleischer said. “Every President needs to have their feet held to the fire. ...They are often liberal reporters who make mistakes. President Trump has proved something, that he can push back, he can fight back in a way that [former Republican Presidential candidates] John McCain and Mitt Romney did not. But I also believe that there are bounds and there must be civility in how we carry out our arguments in the White House and as Americans. I’ll just say that they’re liberals and they’re wrong. I won’t say they are enemies of the people. ”

Fleischer also decried the absence of White House briefings, but said reporters shouldn’t miss them because they have something better -- access to the President.

“I give tremendous credit to President Trump for going out there and being his own press secretary,” Fleischer said. “He takes questions every day. That’s a reporter’s dream come true. As much as reporters complain, as much as they hate the President and the President hates them, and there’s this terrible hostility, he gives them the No. 1 most important thing they need and that is access to him to ask whatever is on their mind.”

Earlier, Fleischer said he would bring back the briefings, but not put them on TV.

“It shouldn’t be a TV show,” Fleischer said. “The briefing should be a normal conveyance of governmental information to reporters with questions so that reporters don’t posture and argue back and stand their ground so they can become famous and get Twitter followers. Take it off the TV and just make it a good old fashioned briefing.” 

CHICAGO — Bridging the digital divide in small rural communities is still a top priority and one that can help operators drive sales growth even as video customers dwindle, a panel of top small cable CEOs said at The Independent Show’s Opening General Session.

“Providing that local connection, and not just driving the content of those customers, [is critical],” said Buckeye Broadband president and general manager Geoff Shook at the session titled Hot Topics, Cool Leaders. “Owning that relationship from the edge of the end user’s device all the way through the businesses.”

MCTV president Katherine Gessner added that just providing the service isn’t enough for success. Education is a key part of the puzzle.

Gessner told the audience that in MCTV’s initial moves to convert some newly acquired customers from fairly antiquated systems to fiber-to-the home, they were reluctant to switch, even though converting meant they would get data speeds four times faster than their old DSL service.

“They didn’t understand what you could do with it [higher speeds],” Gessner said. “We found out there was a waiting list for DSL. They didn’t want to switch because they were scared that if our service didn’t work they couldn’t go back.”

For Schurz Communications, president and CEO Todd Schurz said one solution has been to partner with other providers in building out broadband networks. Schurz is currently working with local governments, using some state grants in Vermont and Minnesota, working with telephone co-ops in Iowa, electric co-ops in Minnesota, and Native American nations in Minnesota and Arizona.

“What we have found, all of these are structured differently, there’s no one model that fits everything,” Schurz said. “But it’s something that everybody realizes they need to do.”

“If you can go to some of these local entities and say, ‘You don’t have to build a digital headend, you don’t have to worry about all of that infrastructure, and you can put your resources into upgrading the local network, and we will then take the handoff,’ that seems to work pretty well,” he said.

As the industry moves closer toward 5G wireless services, smaller operators are helping to lead the way. At Shentel, executive VP and chief operating officer David Heimbach said that while his company is moving forward on wireline initiatives like DOCSIS
3.1 — which should be completed by the end of the year — they are also making inroads with 5G.

Heimbach said Shentel is currently trialing a 5G service, but there is still plenty of time before that service becomes essential. Of the 5 billion discrete wireless customers worldwide, he said, only one-third are on a 4G network and only 15% of mobile customers are expected to have 5G by 2025.

“This has a long tail on it,” Heimbach said.

But small operators are forging ahead, building out their networks and providing state-of-the-art service to customers, largely funded by their own coffers.

Gessner said that although MCTV did look into obtaining federal grants to build its fiber network, it didn’t make sense in the long run. MCTV began overbuilding its network with fiber to the home in 2014 or 2015 and last year began acquiring a few small properties near its traditional territory. The upgrades have resulted in strong broadband growth, she said.

“We shut off the analog plant in the first system in November and went from 0% internet penetration to about 20% in about seven months,” Gessner said. “It really opened our eyes to the need for rural broadband.” 

CHICAGO — The Independent Show — which kicks off today (July 29) in Chicago — is shifting with the changing cable sands this year, offering members more marketing, workforce and e-commerce sessions in line with the industry-wide transition toward broadband and IP services. National Cable Television Cooperative CEO Rich Fickle spoke with Multichannel News about the show and and other issues affecting small cable operators. An edited transcript follows.

MCN: What’s different about the show this year? What should operators be looking for?

Rich Fickle: If you looked at the show content three years ago or four years ago, it was probably 80% video-driven. Now you’re seeing a broader mix, more broadband and some other areas relating to the management of companies. So, for example, this will have a focus on three panels regarding workforce hiring. Next generation — there are a lot of family-run companies, so there are a lot of special circumstances associated with that. It’s really an interesting time, in terms of how do you find a workforce that can adapt and operate in a much more software-driven world, given the mix of services? That’s one critical theme.

The folks in our group and ACA [Connects] on the legal side put together a pretty good program that is attracting some of the top legal executives from across the membership. That’s a first for us.

There is much more of a focus on marketing. As some of these services start to look alike across the competitive landscape and there is more competition, how do you differentiate yourself as a smaller operator? Where do you stand in terms of your brand, and what are the best practices that you can learn from others to compete with sometimes larger companies?

MCN: How different is it marketing broadband, apps and IP services than the traditional bundle, which mainly was sold on a price-comparison basis?

RF: Operators used to have a common, triple, double, sometimes quadruple play, and everyone was organized the same way and it was a call-center sales process. Today, I think it’s much more of an e-commerce play — allowing customers to find you easily, make their selections online and, in some cases, fill their requests online and even from the comfort of their remotes at home. That’s a different paradigm.

MCN: I see that you’re doing a General Session with Viacom. Is that a first for you guys?

RF: It is. We recently completed a renewal with Viacom and I think the terms are good, they’re attractive to a lot of our members. It doesn’t mean you won’t see some members think long and hard about the renewals, just because of the way that pressures are with the cost of video. We thought it was appropriate, given that we were able to reach a positive agreement with Viacom, to have their executives spend some time talking about what’s going on with that company, and a little bit about the deal structure and where they’re going. I would give kudos to [Viacom CEO Bob] Bakish and his team in their efforts to revitalize those relationships across the industry, ours included.

You’ll see another similar approach on the technology side. We invited some senior executives from a couple of the large suppliers to talk about their businesses and the challenges they have, given things like competition on a global basis, tariffs and shrinking R&D budgets. We thought we would let these executives help us understand what’s important to them, what the challenges are and how we can work together more collaboratively.

MCN: There are some breakout sessions on topics like HR. Is that becoming increasingly important to your membership as technology advances?

RF: It is. In some ways it’s kind of an aging workforce, and the question is, how do you recruit and attract that next generation? The old way I grew up in cable, you had technicians that were at the top of the food chain in terms of being able to solve problems and turn things around. Now a lot of the tech skills are embedded in support systems, alarming, alerts and diagnostics. [Call-center reps are] no longer customer-service reps. They’re really technical support people now, with tools that are far different than what we had five years ago.

MCN: What can members do for fun at the show?

RF: We’ve got an afternoon out at Wrigley Field, giving members and their families the chance to run out on the field, run the bases, throw pitches, hear from the Cubs management and a few players. I think it will be a tremendously popular event and it’s being done in partnership with Sinclair, which struck a relationship with the Cubs [forming RSN Marquee Sports Network]. … We’re grateful to Sinclair, to have them participate in a big way, and once again it’s a sign of the different approach to how we’re adapting to the challenges in the industry.  

CHICAGO — The Independent Show is really two shows in one for small cable operators — an opportunity to meet, reconnect and share ideas with other small operators from around the country, and an opportunity to bone up on regulatory issues and trends with the biggest small operator lobbying group in the country, ACA Connects. ACA Connects CEO Matt Polka spoke with Multichannel News about what attendees should expect to see and what sessions could be of particular interest. An edited transcript follows. 

MCN: Going into the show, what should small operators be expecting from ACA?

Matt Polka: There is a lot that we’ve been working on together with our friends at NCTC to make this show stellar and to stand out in our industry, which I think it does, now that there are basically fewer shows. It puts a lot more focus on our Independent Show and our members and what they are doing, which was ironically the goal when we introduced The Independent Show 14 years ago in Chicago.

In terms of the show itself, we expect this to be one of our largest ever for a couple of reasons. There are fewer shows, so you’re getting more participation from operator members, as well as vendor companies that want to come out to support it. The second reason is we’re in the middle of the country in Chicago, where if you draw a 400- to 500-mile circle around Chicago, you can draw a lot of people in who can drive. As we saw a couple of years ago in Indianapolis, a show like this in the breadbasket of the country helps to bring in members.

“Ignite” is a really good term for our theme. Fourteen years ago, it was “Winds of Change,” and that was appropriate then as we were introducing a brand-new show. Now, Ignite is just as appropriate, because so many things are hot, they’re moving, they’re important right now, whether it’s business, technology, policy, operations, over-the-top, 5G spectrum issues. [There is] a lot more that our members are involved in, day to day, than they ever were back in 2006.

MCN: Tell us about some of the speakers you’ve brought in. I see that former White House press secretary Ari Fleischer is scheduled for the Tuesday keynote.

MP: Ari Fleischer is nationally known, former key staff in the Bush White House, someone who has made his views felt on Twitter and in our industry. And while he speaks from a particular political point of view, the one thing that has always impressed me about Ari, particularly when I follow him on Twitter … throughout everything he says are two important elements that are sorely lacking in Washington today: common sense and fairness.

We’re bringing in another keynote on Wednesday, Bill Conner, the CEO of SonicWall. Bill’s been in cybersecurity posts and technology all of his life, from an association perspective and a business perspective. Beyond that, in addition to his work advising clients, he’s an international expert on the threats that today our nation, our government, our infrastructure, our business face from all across the world. After Bill is done, I think a lot of people are going to run out and start changing their passwords.

I’ve been happy to work with the development of our CEO leadership panel this year, which will be Monday morning after we have our kickoff. Bob Gessner, who is our current chairman at ACA Connects, is going to moderate that, along with his daughter Katherine, who is the president of MCTV; Dave Heimbach, who’s the COO of ShenTel; Todd Schurz, the CEO of Schurz Communications; and then Jeff Shook at Buckeye [Communications], who is the operational head of Buckeye in the Toledo [Ohio] area. This has become kind of a tradition for us, but it’s really great to benchmark from some of our top leaders.

MCN: I see there are sessions on the legal track and on state government issues.

MP: Our SVP of government affairs, Ross Lieberman, and our VP of regulatory affairs, Brian Hurley, have been working closely with Jeff Nourse [NCTC SVP regulatory and legal affairs] on developing this very very strong legal track that will certainly attract practicing lawyers, general counsels and legal staff for our members, as well as other interested parties.

MCN: The Independent Show always struck me as one where the members realized maybe more than most that talking to other people in the industry was good for their business. In this climate, is that more important than ever?

MP: Many people say that our show harkens back to what cable used to be like. It’s always one of the top reasons our members give us in surveys for coming to the event, and that is to be able to have lunch and dinner with another member to network, to ask how they’re handling this problem or that problem, to benchmark with each other. I think that’s one of the coolest things our show provides. 

Minim, a maker of AI-driven WiFi and IoT security software, has announced the integration of its platform into Motorola-branded router products from Zoom Telephonics, as well as WiFi mesh extenders made by Sercomm.

“There’s a lot to like about Comcast’s xFi solution,” said Jeremy Hitchcock, founder and CEO of Minim, referring to Comcast’s popular WiFi management and IoT security app. “Smaller operators need those kinds of capabilities, too, but if you’re not Comcast, you probably don’t have the resources to build them yourself."

At the Independent Show in Chicago this week, Minim will showcase the Motorola MG8702 Cable Gateway, a DOCSIS 3.1 cable gateway that has an integrated AC3200 wireless gigabit router with Power Boost WiFi amplification. The MG8702 implements Secure Boot for advanced network security and defense against code substitution.

Minim will also be showcasing integration of its platform into the Sercomm RP324 WiFi Mesh Extender.

Minim offers a care portal for operators to provide smart home support and security services to their subscribers, an self-care mobile app for subscribers (in both iOS and Android versions), as well as platform benefits such as firmware management.

“The integration of Minim capability into our Motorola branded cable gateways provides us with a strong competitive advantage in the service provider market,” said Joe Wytanis, president of Zoom Telephonics, in a statement. “Our service provider customers can gain a new source of revenue from home network management tools and can solve the increasing problems introduced by smart home’s using multiple wireless devices. New revenue and higher subscriber satisfaction is a powerful combination provided through our Minim-capable cable gateways.”

Added Hitchock: “A lot of operators are asking, ‘How can I expand what I do?’ And we offer a complete care portal. We can see what’s going on inside the home [network] and help subscribers diagnose problems.”

As far as security capabilities, he noted, “We’ve seen a thousand Nest cameras know what they do… We tailor security for the specific device and what it needs to do.”

Anaheim – With broadband speeds doubling every two years, operators need to focus on innovation, network reliability and connectivity to drive results, a panel of experts said at a Monday (July 31) panel session at The Independent Show here.

Read More: MCN's Coverage of The Independent Show

CableLabs chief operating officer Chris Lammers noted that according to Nielsen's Law, high-end users’ bandwidth needs will grow by 50% every two years. With that in mind, Lammers said ultimate speeds will rise from 1 Gigabit per second in 2016-17, to 10 Gbps by 2023 and 100 Gbps by 2029.

ShenTel senior vice president, cable Tom Whitaker said operators need to make sure their networks are up to snuff to deliver higher and to know who their completion really is. While 5G wireless is getting a lot of press, in many cases the technology isn’t economically feasible for small communities.

Whitaker pointed to a Verizon Communications 5G deployment in Houston that cost the telco about $15.50 per covered POP. In a smaller market, like Lexington, Va., 5G could cost $55 per covered POP.

“Maybe 4G is a better option, a better long-term solution for many wireless networks in most of the small towns where we do business. So, I wouldn’t get all jacked up about 5G unless it’s in a bigger town,” Whitaker said.

Deploying fiber also has a halo effect on the entire company, said TDS Telecom director of product management and development Scott Schultz. While TDS does better in areas where it has deployed fiber, the halo the network gets from offering the service extends to areas it hasn’t upgraded yet. Take rates for copper-based services increased about 9% in neighborhoods that haven’t gotten the full fiber treatment yet, Schultz said.

“Even when you don’t have fiber to add, it works,” Schultz said. 

Anaheim – Video isn’t quite dead yet, it’s just taking a different train, according to a Monday (July 30) panel session at The Independent Show here. And small operators are finding ways to pair content offerings with broadband to satisfy changing consumer habits.

Read More: MCN's Coverage of The Independent Show

At the opening session, “Tackling the Challenge of Change… and Everything Else,” Multichannel News managing director, content Mark Robichaux and a panel of executives at top mid-sized and small operators picked apart the business, which has been dominated over the past few years by broadband and commercial services. The panel insisted that despite high programming costs and changing viewing habits, video is still an important arrow in cable’s quiver.

Video is taking a different form and instead traditional lineups packed with linear networks, smaller operators are offering the product through broadband apps and OTT services.

Schurz Communications vice president, cable Brian Lynch agreed that the video business has evolved, but added the industry has seen this before.

“The video challenge is a real one, but we’ve survived DirecTV and Dish [Network] in 1993 to 1995. The outcome of that was we got better and stronger,” Lynch said. “I think the same thing is going to happen with the onset of OTT. It’s a clear risk, we have time to solve this, but the main focus has to remain high-speed data.”

Fidelity Communications president John Colbert said while broadband and business services are the profit centers, less expensive forms of video are gaining traction with consumers.

“The challenge is to find how do we provide video and find a way to do it less expensively. I’m still long on this industry,” Colbert said. “We still have the best pipe in the house.”

Still, Colbert said most of Fidelity’s new customers are single-play broadband. In the last 36 months Fidelity grew broadband by 36,000 customers, half of whom were single-play broadband subscribers. He added that making it easier for customers to navigate between different OTT services has helped grow that segment.

“The ease of that transition supports the fundamental growth of high-speed data,” Colbert said. “Video consumption is going up.”

At Cable One, which was one of the first cable operators to move broadband to the front seat years ago, chief operating officer Michael Bowker said ease of use is essential for success.

“Our goal is we don’t view [video] as friend or foe,” Bowker said. “We want to enable our customers to have access to consume the video product however they want. If they’re doing that over my HSD pipes, then I win in that scenario.”

Broadband is fueling most of the growth of small cable and it doesn’t show any signs of letting up soon. Colbert said in some recently acquired markets, penetration rates are in the high 30% range.

“I don’t see why we can’t have 70% penetration,” in those markets, Colbert said.

Small operators are at an advantage in rural areas because the competition can’t always invest the capital to offer superior speeds. That has even been the case for newer players.

At Allo Communications, which has overbuilt several markets in Nebraska and Colorado with fiber, the company has captured 80% to 90% market share in business services in some locations. It is expecting similar results in Lincoln, Neb., when it completes its fiber build there later this year.

“The avalanche is coming,” Allo president Brad Moline said.  

INDIANAPOLIS — Public speaking can be anything but easy.

Five minutes into his keynote presentation onstage at The Independent Show, industry consultant and futurist Shelly Palmer (pictured) made the best of a tough spot.

After the fog for a laser show had barely dissipated, jackhammers started pounding away on the roof, to the dismay of the speaker. Then, after a few minutes, fire alarm sirens and strobe lights started going off.

Then a Voice of God came to life on the PA system and tried to reassure Palmer that the fire alarm was being checked out, and it was probably a false alarm.

And in the words of the late Hunter S. Thompson, when the going gets rough, the weird turn pro.

Palmer whipped out his phone: “I think it’s time for Facebook Live. This is one of those moments….

“This is really funny, I mean, you know, in a weird, completely ‘are you kidding me?’ kind of way,” he continued. “In a minute, they’re re going to tell me if I can finish my speech or what’s behind door No. 2? Run like hell for the exit!”

Once on Facebook Live and streaming, he looked into his phone and began: “Hi, the strobes are going here. I’m onstage at NCTC. Here’s everybody. Notice the strobes … We’re live on Facebook right now. Wave everybody.”

After a bit more of that inspired improv, Palmer said goodbye to the assembled online masses. The sirens stopped, and he resumed his talk.

INDIANAPOLIS — With the rest of the cable industry focused on the possibility of Scripps Networks combining with either Discovery Communications or Viacom, Sanford Bernstein media analyst Todd Juenger warned that one of the catalysts for a deal — preserving double-digit affiliate fee increases — won’t last too much longer for any cable programmer.

Update: Discovery to Buy Scripps Networks for $14.6 billion

Gross margins on video programming for the average cable operator are about $21 per subscriber per month, after affiliate fees and customer expenses, Juenger noted on a panel at The Independent Show here. Juenger estimated that by 2018, that gross margin would shrink to $15 per month per subscriber.

“If nothing else changes, how long is it until that $20 per subscriber per month goes to zero?” Juenger asked. “The answer is 2023.” In order to maintain profit margins, either affiliate-fee growth must slow down or networks have to be dropped, he added.

Juenger had an answer for that, too. Of the 10 network groups that control the bulk of programming and affiliate fees, he said distributors have several choices.

Weighing Net Losses
The greatest financial impact, he said, would come from dropping The Walt Disney Co.’s networks — including broadcaster ABC and ESPN, pay TV’s priciest network — as Disney charges the highest affiliate fees at $11.49 per sub, per month. But it could also prompt the greatest number of subscribers to switch providers: 43%, by Juenger’s estimate.

Dropping Discovery Communications, Scripps Networks, AMC Networks and CBS would have the smallest subscriber impact — under 10% for each network group — but also the least financial impact. All four networks combined have total fees of less than $4 per subscriber per month.

That leaves Viacom, which has affiliate fees of about $3.50 per subscriber per month and had already been dropped by Cable One, Suddenlink Communications (later restored after its purchase by Altice USA) and several smaller cable operators. Those distributors have lost video customers at a higher than average rate, at least partly attributable to shedding the Viacom channels. Cable One has shed about 20% of its video base in the past two years, compared to 2% to 3% for the rest of the industry. But Cable One was willing to sacrifice what it believed to be less profitable customers and has focused on broadband for years.

For Juenger, it’s a simple case of economics. Ultimately, it comes down to how many subscribers a distributor is willing to lose. According to Juenger’s calculations, dropping Viacom would result in losing about 15% of a distributor’s video base.

“If you can stand to lose 15% of your subscribers, you should drop Viacom,” Juenger said, adding that he wasn’t singling out the company because of some personal vendetta. “If you drop Disney, you’ll have a tougher time maintaining subscribers.

“Everybody has something to break,” he added. “This is why the networks cannot continue to harvest these big price increases. It’s no longer financially viable to carry it.”

But it is just that fear of eroding affiliate-fee growth that is pushing some networks together. Scripps Networks, which has about eight channels including HGTV, Food Network, Travel Channel and CMT, is in merger talks with Discovery Communications. That’s after Viacom dropped out of the running for Scripps, after reportedly readying an offer of $10.6 billion in cash.

The Discovery bid is expected to top $90 per share for Scripps, a 34% premium to its close on July 18, when merger talk first surfaced.

Read More: Complete Coverage of the Proposed Discovery-Scripps Merger

Fighting Scale With Scale
Merger proponents say smaller players need scale economics and added carriage for negotiating leverage. That’s because distributors have also been very active on the M&A front to give them more scale and leverage against programmers.

With big deals like Charter Communications-Time Warner Cable completed, and AT&T’s $108.7 billion purchase of Time Warner Inc. winding through the federal approval process, several other smaller deals have popped up in the past few months. TPG Capital has been particularly aggressive in the space — it snapped up RCN and Grande Communications last year for $2.25 billion, and in May agreed to purchase Wave Broadband for $2.36 billion. Cogeco Cable, the Canadian parent of Atlantic Broadband, agreed to buy Harron Communications’ MetroCast operations for $1.4 billion.

For smaller operators, the main catalyst for deals is to expand fiber and broadband networks. For many, video is becoming a second-class offering — small operators CableOne and Suddenlink Communications were the first to drop a major programmer (Viacom) in 2014.

According to a panel session at last week’s Independent Show, more deals are expected to come.

“Markets are strong across the board. We’re seeing that in the checks the private equity guys are writing,” said CoBank senior vice president Ted Koerner at a TIS session moderated by DH Capital co-founder and chairman Joe Duggan.

Sony Interactive Entertainment America said it has notched a deal to offer PlayStation Vue, its OTT TV service, to customers of the 850-plus cable operators and other service providers that are members of the National Cable Television Cooperative (NCTC).  

RELATED: Complete Coverage of TIS17

The agreement comes during The Independent Show, being held this week in Indianapolis, and comes on the heels of a similar deal between the NCTC and fuboTV, another virtual MVPD that competes with PS Vue and others such as DirecTV Now, Sling TV, Hulu and YouTube TV.

RELATED: TIS17: NCTC Reaches Pact With FuboTV

Those deals are forming as members of the NCTC look for new ways to offer video services to broadband-only customers and to provide an option to consumers who have cut the cord on traditional pay TV services or have never taken a pay TV service. In turn, the deals could give OTT players more exposure to consumers who are seeking those alternatives and bump up their sub totals. 

Financial terms were not announced, but they said the deal with the NCTC, whose members represent more than 9 million U.S. subs, will give those co-op members the ability to “enhance their product portfolio with a new offering to reach broadband customers with differentiated packages and enhanced user experience."

“This is a great opportunity for customers to experience PlayStation Vue’s innovative cloud-based TV streaming service through their NCTC member provider,” Dwayne Benefield, VP and head of PlayStation Vue for SIEA, said in a statement. “PlayStation Vue offers an incredible value to users, with more than 100 popular live national and local channels, a powerful user interface, and the ability to purchase channels a la carte without a bundle.”

“Our members are looking for ways to offer more video choice to their customers, and this new agreement allows them to do that,” added Rich Fickle, NCTC’s President and CEO, “NCTC understands the importance of pursuing new opportunities for the distribution of content, and we are excited to partner with such a strong brand.”

Sony launched PS Vue, initially in three markets, in March 2015, and has since expanded to feature a national offering that includes live local broadcast TV channels in certain markets as it signs more deals with affiliate groups, and next-day VOD access to their shows in others. Sony has not announced sub numbers for PS Vue.

PS Vue is currently supported on web browsers, PlayStation 4 and PS 3 consoles, Apple TV, Roku, Amazon Fire TV and Fire TV Stick devices, Android TV devices, iOS and Android smartphone and tablets, and is optimized for the Google Chromecast for iOS and Android.

INDIANAPOLIS – Rising pole attachment fees and delays in obtaining necessary permits from municipalities are the biggest roadblocks in building out broadband infrastructure in rural America, a panel of experts said at The Independent Show Monday (July 24).

Read More: Get complete coverage of #TIS17.

ShenTel EVP and chief operating officer Earle MacKenzie said for the small market telecom company, simply obtaining permission to string its lines on a utility pole and obtaining a reasonable rate can delay projects for months.

“It’s a different story with each pole owner,” MacKenzie said at the panel session, moderated by Kelly, Drey & Warren LLP partner Tom Cohen. One of the major issues is getting a good estimate upfront and getting detailed billing so we know what we’re paying for.”

He added that last year, ShenTel had 60 construction projects that were delayed an average of 60 days because of pole attachment issues.

While obtaining permits and getting local government approvals can be a hassle, Chattanooga mayor Andy Berke, who has overseen the construction of one of the most extensive municipal broadband networks in the country, said they are necessary.

“We really care about aesthetics,” Berke said, adding that making sure the city gets a fair price and engages with its contractors to make sure the process goes smoothly. “We don’t want 25 people digging up streets. We want to dig once.”

But he added that cities want to be fair to contractors, while keeping their priorities straight.

“Part of the challenge for us is to set up a regulatory scheme and a payment scheme that is fair to the city and constituents and to allow the economic development to put people to work,” Berke said

McKenzie added that Chattanooga can be the exception. Many municipalities, he added, have no clue what they want or how to get it. He pointed to a project in the city of Roanoke, Va., where the telco was delayed in getting the proper permits to run fiber to local schools.

“If we are serious about getting service to everyone, we need to take down the roadblocks,” MacKenzie said. “The last thing we want to do is irritate our customers. We really are in business to make money and make our customers happy. If we have to scratch a different itch in every town, it gets expensive and in some cases it’s not worth going forward.”

Berke suggested that contractors and providers make sure they take into account where local governments stand when they are proposing to build a network to ensure a smoother process.

“If you’re going to a city that doesn’t have clear rules, make sure you’re talking the language of the people running city government,” Berke said.

The Federal Communications Commission, which has in the past kept pole attachments disputes at arm’s length, opting instead to let the market find a solution, has been considering getting more involved, said FCC Wireline Competition Bureau deputy bureau chief Madeleine Findley. FCC chairman Ajit Pai created the Broadband Deployment Advisory Committee earlier this year to specifically address these issues. Findley said the BDAC docket is still open and encouraged operators to offer questions and comments about issues including timelines, rates and fees, best practices and ways to encourage more efficient deployment.

“The chairman is very concerned about closing the digital divide,” Findley said, adding later that the commission is aware that there is no simple solution for the problem.

“The commission is cognizant that this is not an area where one size fits all,” she said. “There are different issues. We want to be available as a resource.”

Findley said the commission is considering whether to impose a 180-day shot clock on itself for such issues to help speed up the process.  

“This is not a once and done thing for the commission,” Findley said. “It’s going to be an iterative conversation. We want to be a participant in that conversation.”

INDIANAPOLIS – The rash of recent M&A deals in the small cable space is likely to continue, but money also will flow into the sector to build out networks and increasingly focus on in-home networking, customer service and improving the overall experience according to a panel session at The Independent Show.

The handful of top executives at small cable operators said they expect consolidation to continue especially as larger companies recognize the strength of their networks and the rising demand for fast and faster broadband speeds.

Read More: Get complete coverage of #TIS17.

Already there has been a flood of deals in the past year – private equity firm TPG’s purchase of RCN and Grande Communications last August for $2.25 billion and its May agreement to buy Wave Broadband for $2.36 billion; and Cogeco Cable’s July agreement to purchase MetroCast for $1.4 billion.

New deal currencies form recent IPOs at WideOpenWest and Altice USA also should provide fuel for more deals.

But the operators during the panel session moderated by CNBC senior analyst and commentator Ron Insana said there is also a big push to continue to improve the overall customer experience, and that means a sharper focus on in-home networking and customer education.

WOW CEO Steve Cochran, which went public in May, said he was encourage most by the fact that many of the recent deals involved small companies buying small companies.

“It’s all about knowing the customer segment you’re going after,” Cochran said, adding that he was happy that recent transactions involved many of the people that are in this room coming together.”

Knowing that customer segment involves providing faster data speeds for both residential and business customers. At EPB, the Chattanooga, Tenn.-based municipal electric utility, that means providing a good product and with strong customer service.

Vice president of new products Katie Espeseth said customer service said customer service is still the biggest differentiator for small operators competing against larger, deeper pocketed competitors.

“It’s what really sets us apart,” she said.

Related: Indie Cable Operators: Small but Powerful

Espeseth sees small cable and municipal broadband operators not just as providers of less expensive, more efficient service, but as catalysts for the local economy.

“We see our role as being the sparkplug in the community,” Espeseth said. “We spur economic development; we see these type of broadband services as being a catalyst not only for residential customers but to improve businesses and provide an environment for entrepreneurs to grow and flourish.”

But Espeseth said with choices and options increasing exponentially as new methods of content delivery emerge, from streaming to over the top services and TV Everywhere, customers are getting increasingly confused.

That means that education is becoming increasingly important to help customers navigate their choices and to “steer [them] to an experience they feel they personally curated.”

Wave Broadband chief operating officer Harold Zeitz added that allowing customers to integrate their services and devices via in-home networks is the next big priority for the industry, adding that it is essential that operators educate customers in how to use the products they’re offered.

Harron Communications EVP and general counsel Ryan Pearson said in-home networking is high on his priority is, adding that it is also important for customers to be able to interact with their provider in the way they want, whether that be via e-mail, text, or social media.

Espial has introduced Elevate IPTV, a turnkey, cloud-based video platform for MVPDs that has been pre-integrated with Arris’s portfolio of video set-tops and gateways.

Read More: Get complete coverage of #TIS17.

Espial claimed that the new software-as-a-service offering enables partners to turn up new live, VOD, OTT and whole-home DVR services in as quickly as 90 days while also supporting an operator’s legacy QAM video platform and delivering an experience that can be unified across both sides.

The debut of Elevate IPTV comes about a year after Espial closed its acquisition of Arris’s Whole Home Solution platform, which originated from Arris’s $20 million acquisition of the Digeo set-top and software business from Paul Allen in 2009.

RELATED: Espial Seals Deal For Arris’s Whole Home Solution Platform

At the time, Arris and Espial also announced that they’d collaborate on integration and co-marketing activities, and were creating a reseller agreement. Arris was also named Espial’s preferred partner for gateways, though Espial is free to work with other hardware partners.

Espial introduced Elevate IPTV in tandem with The Independent Show, being held this week in Indianapolis.

 “Elevate IPTV provides an elegant solution to access the ever growing choice of video content and consumer viewing devices” Mick McCluskey, VP of product management at Espial, said in a statement. “With content providers engaging consumers directly, Elevate IPTV provides operators with a powerful platform that allows operators to compete with scale.”

“In today’s increasingly competitive environment, we're enabling operators to deliver immersive new viewing experiences that seamlessly combine advanced TV, OTT, and operator-specific services,” added Rob Folk, VP of product management at Arris. “Operators are uniquely positioned to create these next-generation services quickly and efficiently, empowered by ARRIS technology and advanced platforms like Elevate IPTV."

SES said 30 U.S. pay TV providers are using its platform to test the delivery of 4K programming to the home after adding nine cable MSOs and IPTV providers to the mix.

Read More: Get complete coverage of #TIS17.

The latest batch of trial participants includes Alliance Communications; Cincinnati Bell; Douglas County Community Network in Washington; Hotwire; Midco; Midwest Video Solutions (MVS); Oneida Telephone Exchange; Skitter TV; and South Dakota Networks (SDN), which delivers IPTV services in partnership with 19 telcos in South Dakota.

NAB 2017: Two MVPDs Roll Out 4K with SES, Vivicast

They’re on board to test out an integrated platform that offers a package of programming from content partners that include Fashion One 4K, Travelxp 4K, 4KUNIVERSE, NASA TV UHD, Insight TV, UHD1, C4K360, Funbox 4K, Nature Relaxation 4K, as well as SES’s UHD demo channel. SES is hosting the channels using a set of satellites (SES-1, SES-3, AMC-18).

RELATED: Verizon Teams with SES on Ultra HD Trial

“Momentum continues to build as SES accelerates the delivery and commercial availability of Ultra HD services throughout North America, and we expect more cable and IPTV providers to join the trio of operators who have already launched their commercial Ultra HD services using our platform,” Steve Corda, VP of business development at SES Video, said in a statement.

Other trial participants include Marquette-Adams Communications; Highlands Cable Group; EPB Fiber Optics; Verizon Communications; Frontier Communications; Buckeye Broadband;  Service Electric Cable TV; enTouch Systems; Cable America, Golden West Telecommunications; MTC Cable; Aureon; GVTC Communications; KPU Telecommunications; Shrewsbury Community Cable; and Sjoberg’s Cable TV.

SES has been delivering 4K TV at 18 Mbps using HEVC coding. In an earlier interview, Corda reasoned that that bit rate squares with cable operators, because it allows them to fit two 4K TV signals into a 6MHz-wide channel.

RELATED: SES: 18 Mbps Is the Right Rate for 4K TV (subscription required)

Most of the cable operators that in the pilot are delivering the signals over QAM transport to set-top boxes, but some are also considering deliver over DOCSIS networks using IP multicast technology.

DirecTV, Layer3 TV, Dish Network, and Comcast are among other U.S. MVPDs that have rolled out or are testing 4K services.

INDIANAPOLIS -- National Cable Television Cooperative members will be able to offer fuboTV’s broadband and over-the-top streaming TV bundle as a result of a partnership reached ahead of the co-op’s annual conference, The Independent Show, here July 23-26.

“This partnership gives our members the ability to provide added value to their broadband customers, while also providing more content options for our members, who will now have access to a turnkey OTT video bundle that includes some of the most popular sports, news and entertainment channels on TV,” said NCTC’s vice president of product management John Childress in a statement.  “There is growing demand from certain consumer groups towards live streaming video services, and we feel these partnerships help provide members options to reach these different types of consumers.”

Read More: Get complete coverage of #TIS17.

Sports-first virtual multichannel video programming distributor (MVPD) fuboTV’s entry-level “Fubo Premier” bundle includes 60-plus live channels – including 34 that carry sports; 80% of the country’s regional sports networks (RSNs); and seven of the top eight broadcast networks – and can be accessed on desktop or mobile web at fubo.tv; via Amazon Fire TV and Fire TV Stick; Android and iOS devices; Apple TV; Chromecast; Kindle Fire; and Roku.  Additionally, subscribers can access a growing video on demand (VOD) library, and at no additional cost, can use their fuboTV ID and password to log in to dozens of networks’ authenticated TV Everywhere apps and websites.

Also as part of this agreement, NCTC members will have the ability to offer extended free 30-day trials of Premier twice annually on a company-by-company basis, with fuboTV providing materials that can be used by each member’s marketing teams. Fubo Premier is currently available at an introductory price of $34.99 per month, with a seven-day free trial.

“As the only independent live streaming TV service in the space, we are looking forward to partnering with hundreds of independent providers to help them level the playing field in an increasingly competitive marketplace,” said fuboTV co-founder and CEO David Gandler in a statement.  “I’m confident that this relationship will be mutually-beneficial, and am thrilled to be making this announcement in advance of fall TV premieres and the upcoming NFL, NBA, NHL, soccer and college football seasons, and the MLB pennant race.”

The American Cable Association honored several members at The Independent Show in Orlando, Fla., Wednesday in recognition of their support of the organization as well as their commitment to providing high-quality video, voice and broadband service to consumers in rural and remote parts of the country.

"The individuals and companies that ACA is honoring with its most prestigious awards are exceptionally talented and dedicated, and I salute them all for the accolades that they so richly deserve," ACA President and CEO Matt Polka said in a statement.

ACA's top honors were presented as follows:

Lyn Simpson Grassroots Spirit Award: Chad Lawson, Network Technician, Murray Electric System 

Presented to a company or individual embodying the passion and commitment that Lyn brought to the small operator community in her role as an ACA founding member in the early 1990s. The award underscores the value of commitment, dedication, and sacrifice to the independent cable business.

ACA PAC Leadership/Company: GCI

This award recognizes GCI for greatly increasing PAC contribution totals and significantly increasing the number of ACA PAC donors in the past year.  

PAC Individual Award: Steve Weed, CEO Wave Broadband. 

The PAC Individual Award recognizes enthusiasm, dedication and support for the ACA PAC and for creating a culture of knowledge within the company regarding the ACA PAC's important role and purpose.

ACA Partnership Award: Scripps Network

This award is for partnership, commitment and support for ACA and independent cable businesses everywhere.

Eagle Award: Bill Beaty, EVP of Cable TV, Comporium.

Presented for making outstanding contributions to independent cable operators and providing critical leadership to help build support for new laws and regulations designed for smaller, full-service communications providers.

The Independent Show is co-hosted and jointly organized by ACA and the National Cable Television Cooperative.

C Spire said it is working with MobiTV on a next-gen, in-home TV service that will do away with “traditional” set-tops and instead target a wide range of connected streaming platforms, including Roku players, Amazon Fire TV and Apple TV devices, select smart TVs, and iOS and Android smartphones and tablets.

The Mississippi-based wireless operator, which timed the announcement with this week’s The Independent Show in Orlando, Fla., said it expects to launch beta testing in November and obtain customer feedback and input prior to a commercial launch.

C Spire said the new service will feature a full linear TV lineup, including local broadcast TV stations, VOD, a cloud DVR, and seven-day TV “catch up” service. C Spire said it also has plans to pair that full-freight pay TV service with optional “skinny” channel packages

"Since the service relies on in-home streaming and mobile devices, it eliminates the need for traditional set top boxes,” Suzy Hays, SVP of consumer markets at C Spire, said in a statement. “This next generation service leverages our long-standing history of providing customer-inspired wireless experiences and will look and feel more like an app than your standard cable TV service with features such as in-depth search, personal recommendations and catch up TV.”

C Spire’s decision to go with an apps-style pay TV service comes amid the FCC’s pursuit of new set-top rules. The cable industry, led by the NCTA, has been advocating for an apps-based approach under its “Ditch the Box” proposal. Last week, the NCTA fed the FCC a pile of data and information about the technical and operational components of its proposal.

C Spire’s legacy pay TV service, called Super HD TV, features a mobile app with TV Everywhere support, interactive guide, and a whole home DVR that can record up to 400 hours of HD and record six shows at the same time. The company has been asked for more detail on its legacy vendor partners. C Spire has been rolling out fiber networks in several communities, including Clinton, Flora, Jackson, Madison, Quitman, Ridgeland, and Starkville.

Updated: A C Spire official confirmed that its legacy video platform was developed in partnership with Innovative Systems, and that its next-gen, app-focused TV product will be delivered into the home via managed IP connections.

MobiTV said C Spire is the first U.S. MVPD to tap its IPTV platform, which integrated several components, including the CMS, DRM, Media Player, nDVR, content policy, identity management, billing and authentication.

MobiTV has historically focused on mobile operators, and counts clients such as AT&T, Deutsche Telekom, Sprint, T-Mobile, TELUS, US Cellular and Verizon.

“The in-home TV experience is changing rapidly, creating both challenges and opportunities for providers as they navigate the new reality of delivering pay TV services in today’s market,” said Charlie Nooney, CEO of MobiTV. “This is only the beginning for us. We continue to break barriers and utilize our long-history in the video delivery space to help more companies’ future-proof their offerings through our ever-evolving, agile solutions within the video delivery ecosystem.”

Wurl said more than 50 operators have signed on to distribute a handful of ad-supported, over-the-top streaming channels that will appear in set-top guides alongside traditional, linear TV services. 

Wurl, a Palo Alto-based company that specializes in streaming video services for pay TV operators, said it’s booting up the offering with a mix of its own aggregated/curated streaming channels -- The Alt Channel (“millennial-targeted” content), Streaming News Network, and The Sports Feed -- as well as two offerings sourced from programming partners: the Popcornflix Channel and Baeble Music TV.

All five are designed to appear in a set-top’s on-screen guide like regular linear channels. In addition to accessing those channels as a linear-style feed, viewers will also have the option to access on-demand programming from those OTT channels. 

Content from those channels have typically been accessible via digital platforms (such as the Web, mobile devices and streaming media players), but, with Wurl’s cloud-based platform, are now being made available on set-tops from MVPDs, Sean Doherty, Wurl’s CEO and co-founder, explained.

“This is a very cable-friendly way to let pay TV subscribers access streaming content,” he said.

As for technical requirements, set-tops must have an IP connection to pipe in Wurl’s streaming channels. Wurl has also been integrating its platform with middleware and set-top software partners to get its content stitched into guides alongside more traditional programming.

Wurl said more than 50 operators representing 13.5 million subscribers have agreed to carry its streaming channels. Doherty said most of its initial partners use the Arris Whole Home Solution or a TiVo-powered platform.

The first and only announced distribution partner announced is Fidelity Communications, an independent operator that serves parts of Arkansas, Louisiana, Missouri, Oklahoma and Texas. Fidelity offers the Arris Whole Home Solution (WHS), an IP-capable platform, under the “Fido” brand. Wurl and Arris, which recently sold the WHS assets to Espial,  announced an OTT integration deal in July 2014.

“We now have a new source of programming and new interactive viewing features that will give us a competitive edge,” Loren King, product manager at Fidelity, said in a statement.

Doherty said it’s offering its OTT channels at no cost to the operator, and that it drives revenues from a programmatic, cloud-based ad management and insertion system called AdSpring. Wurl uses that platforms to sell ads, but also enables its programmers and operator partners to sell inventory on its platform as well.

Wurl timed the announcement with this week’s The Independent Show in Orlando. 

As cable operators of all shapes and sizes descend on the Walt Disney World resort in Orlando, Fla., this week for The Independent Show, the pay TV business is at a crossroads. Over-the-top services, changing viewing habits and the continued emergence of broadband as the dominant product are forcing small and large operators alike to rethink the pay TV business.

That transformation is occurring in the organizations that represent these businesses, too. The National Cable Television Cooperative, created decades ago as a buying group, is no different. While negotiating programming contracts will continue to be a big part of its mission, the NCTC is gradually shifting toward helping smaller operators cope with the ever-changing market.

Rich Fickle, president and CEO of the NCTC, spoke with Multichannel News senior finance editor Mike Farrell about those topics and others recently. An edited transcript follows.

MCN Independent Operators of the Year:WideOpenWest Covers Its Bases | Buckeye: Building on Broadband

MCN:What should NCTC members expect to get out of the Independent Show?

Rich Fickle: We always find that members get a lot out of hearing from other members. We started about a year ago diversifying some of the content, and we’ll have a good breakout session on company culture and customer service. But probably the bigger one is the whole IP-video space. You’ll see several exhibitors in that category, both platforms and OTT providers. That seems to be a key for the continuation of video.

If we can find ways and help these guys make that migration happen, to go from analog and [quadrature amplitude modulation] to IP, I think that’s really important. I think, we’re seeing some of the larger guys doing network DVR and more extensive on-demand offerings. The good news is that we’re finding ways to do that, too.

It’s probably unlikely programmers are going to stop raising rates, so they have got to embrace a different model. And our hope at the NCTC is that we can be a helping hand in providing options for them [small operators] in that new model.

The existing programming model is probably going south. [Operators] have to find other ways to keep customers happy with video.

MCN:What’s the alternative? OTT?

RF: OTT means a lot of different things to different people. One flavor of OTT is current programmers like premium-service providers like HBO. In an OTT world, maybe it’s the same programming relationship with the operator, but the OTT app for HBO offers well over 2,000 titles, compared to what you can get on VOD or a linear stream. The other application is niche content. Some of these guys are pretty well suited to fit some niches in an IP world that doesn’t take up full-time bandwidth.

Then, you’ve got bundled services like Sling TV and Sony [PlayStation] Vue. Hulu is trying to emerge as a vehicle for some of the large content groups. Some of those make sense to investigate. We’ll embrace other content sources and other forms of the same content but with a better experience for the consumer.

Related >Big Government vs. Smaller Ops: A Q&A With the ACA's Matt Polka

MCN:Is this like a build-your-own-skinny bundle offering with services like Hulu and Netflix, because the cable networks won’t let you do it?

RF: You’re kind of removing a barrier by adopting IP, removing the barrier of having the shelf space dominated by eight companies. Now, you can allow the consumer to have more choices. That’s what the business has always been about.

It’s hard to know who’s going to win the OTT contests, especially those that are recreating packages. But if you set it up right, you can let the market decide that. The cable operator takes on a role of providing the best choices he possibly can, the very best broadband network, the very best in-home WiFi experience and maybe an IP video set-top or apps. It could be an app business one day.

MCN:Apps are gaining traction with distributors across the board. I’ve heard people say one day that is how all services will be delivered — through apps, not set-tops.

RF: That’s right. You’ll hear at our show about a couple of members who will move that way next year. I think it’s probably too early for a broad number of companies to do that. But as usual, we have a couple of companies that are very entrepreneurial and they are going to move toward app-driven video delivery on Roku devices or Amazon Fire, and they’ll probably have that up and running this year.

MCN:Can you say who they are?

RF: I can’t. They want to make an announcement at the show. I don’t want to steal their thunder.

MCN:You recently launched VU-IT with Evolution, a new platform that includes a solution for back-office integration, OTT apps and enables IP-based linear and OTT services.

RF: There are two pieces to it. The initial impetus was to try to find a way to lower the cost structure of deploying TiVo for small and midsized operators. We’re also taking a more active role in some of the apps that show up on the TiVo box on behalf of those companies. There is a healthy pipeline of 15 or so companies either in the launch process or close to making that commitment and some already up and running.

In the process of doing that, we had to build out a back-office platform, we call it Bravo. We finished that and turned it up about a month ago. We’re finding that maybe there are some other opportunities for it. It is a way to facilitate back-office integration for mobile devices, OTT partnerships or some other things we’re working on. You’ll hear more about Bravo in the future.

MCN:That seems like a good example of how NCTC has evolved, you’re not just negotiating programming deals anymore.

RF: Our board told us about three or four months ago that the major programming renewals are still important, but maybe as important if not more important is finding ways to help members with these types of services, so we can create virtual scale if needed and bring the right partners or expertise to the table and help these guys move fast.

MCN:How are you going to do that?

RF: We have a list of about 10 projects. Some are a little further along than others. We have an IP VOD project that we are about to finish phase one on [with Evolution and its iVelocity unit]. There will be a couple of other phases to it and that will marry up with TiVo or a couple of other platforms. The idea is to provide a deep library of on-demand content with a very low cost structure and a good user experience. It’s all IP so it takes away the need for local markets to invest in VOD servers and that whole infrastructure. We treat it just like an OTT app so it can sit on mobile devices as well as set-tops.

That’s probably the most obvious. There are a halfdozen others, ranging from advanced advertising [to] network DVR.

The cable industry’s regulatory environment has heated up in the past year, with potential new set-top-box rules and the Federal Communications Commission’s decision to back off on retransmission-consent reform just the latest in a long list of cable-centric rules that could place undue burdens on operators large and small. While limited resources would make it hard for small, independent operators to fight lengthy regulatory battles, they have the American Cable Association to do it for them.

As The Independent Show in Orlando, Fla., drew near, ACA president and CEO Matt Polka spoke with Multichannel News senior finance editor Mike Farrell about how small operators can deal with the changing climate. An edited transcript follows.

MCN Independent Operators of the Year:WideOpenWest Covers Its Bases | Buckeye: Building on Broadband

MCN:What are the biggest issues for small operators going into the show?

Matt Polka: The theme of the show is, “Refocus and Reconnect.” I think that is appropriate in many ways. I would also say recommit. We’ve never had a year like this where we are under such enormous regulatory strain, where the types of important rulemakings that are moving at the commission, each on their own, could have a significant impact on our members’ ability to deploy more broadband service. We’re telling our members to refocus, reconnect and recommit, so you can be strong in the face of this storm.

As part of that recommitting, we’re saying, “Recommit with us at ACA so your voice can increasingly be heard.” We’re also telling our members to look at their customer service as a key differentiator that will help them maintain a strong positon and will also keep them from scrutiny.

A couple of weeks ago, Sen. [Claire] McCaskill (DMo.) and Sen. [Rob] Portman (R-Ohio) had a hearing regarding customer service for primarily the larger MVPDs. And while that hearing wasn’t focused on our members, it’s a good lesson to never ever take anything from a customer-service perspective for granted, [to] ensure that we as cable operators are presenting the best cable customer service we can provide and demonstrating that value that we are a vital connection to the community.

There are four primary issues from a rulemaking perspective: The set-top box rulemaking; the rulemaking on business data services, otherwise known as special access; the broadband privacy rulemaking at the FCC; and then just the implementation of Title II. Each one of these is a specific regulatory effort — although [with] Title II, the FCC hasn’t said what it might do yet — each one of those areas are crucial because of the cost impact to comply with the regulation, man hours, paperwork hours, the diversion of resources from deployment of broadband service to what we see as needless regulatory compliance.

MCN:It seemed like all of the indications pointed to the FCC finally doing something on the retransmission-consent reform front. How will inaction affect the industry going forward?

MP: Based on even as late as late last week [July 15] meetings with the bureau and other commission staff indicated there was going to be an order. For [FCC chairman Tom Wheeler] to say, “Nah, I don’t think so,” we’re shocked by that. I think what it’s going to mean — this isn’t the year when most agreements come up, it’s next year — unless something changes at the FCC or at the Hill, we’re going to see the impact of basically an unfettered broadcast industry that has carte blanche to do whatever it wants. That’s not a result that anybody wants.

Related >It’s a Small World After All: A Q&A With the NCTC's Rick Fickle

MCN:This year is an election year. Does that mean even more change is in store for the industry?

MP: We’re looking ahead to what’s going to happen in 2017. Heavens knows what is going to happen in the presidential elections. We’re going to have to deal with a new administration, most likely an interim FCC chair and then a new FCC chair. There will be a new head of the Energy & Commerce committee in the House because of term limits there; it’s unknown whether the Senate is going to flip from Republican to Democratic and whether [Democratic] Sen. [Bill] Nelson from Florida will be the chairman or [Republican] Sen. [John] Thune from South Dakota will remain the chairman.

We’re telling our members regardless of all of this uncertainty in the political environment, we at ACA are well-positioned because we’ve done the homework, we’ve done the grassroots, we’ve done the groundwork, so regardless of these possible changes we can stay focused on our policy objective moving forward.

One of the big issues that remains is whether [FCC Democrat Jessica] Rosenworcel is renominated and how that could affect the commission, and whether chairman Wheeler, as is tradition, steps down. There could be some bills on the Hill passed during the lameduck session, like an enhanced transparency exemption extension bill.

The Senate not too long ago passed a small-business broadband bill that increased the number of subscribers that subscribe to an ISP from 100,000 to 250,000 to comply with the FCC enhanced transparency requirements. That bill is likely to get passed at year-end. The rest of the Hill agenda for this year is kind of cloudy.

MCN:Small operators have been very outspoken over the years on a lot of regulatory issues. Could consolidation change that?

MP: It remains to be seen what impact consolidation will have on our segment of the industry. I do see some strategic combinations of our members that help to provide maybe better operational control within a particular area. It really remains to be seen whether some of the large interests have any interest in acquiring our members.

The truth of it is, I don’t care who you are, Mediacom, Cable One, WideOpenWest, that’s still really small. Even if you combine some of the larger smaller ops, you’re still tiny compared to Charter and AT&T and Comcast. If there is any consolidation, I tend to think we’ll still be fighting for the same issues.

MCN:One issue that small operators have been especially vocal about over the years has been forced bundling by programmers. Now that larger operators have taken up the skinny-bundle mantle, do you think we’ll see some traction there soon?

MP: I do. We’ve always comically but also seriously at the ACA called ourselves the canary in the coal mine. What has happened is whether it is retransmission consent or problems of cable programming choice or lack thereof, or other issues, is that larger MVPDs have gravitated toward us as they have seen in their own companies with much greater scale the need for relief and reform.

As those companies bring their greater influence to bear, it complements what we at ACA have been doing for years quite well because we compare and contrast on the same track to say the market has changed; the regulations that were once needed aren’t needed anymore with the dynamic, changing marketplace; and that government should release the straps of regulation and let the market decide.

Evolution Digital said it has reached a deal with the National Cable Television Cooperative (NCTC) to distribute its eVUE-TV IP video-on-demand service to the NCTC’s membership of independent operators.

eVUE-TV, a platform introduced by Colorado-based Evolution in February, supplies “thousands” of hours of movies and TV shows on-demand while also integrating IP linear and VOD across a unified interface. Evolution’s future plans for the platform include cloud-based services, including a cloud DVR.

Evolution noted that eVUE-TV is the first offering to be introduced as an option for NCTC members for “VU-IT!,” a new platform that includes a solution for backoffice integration, OTT apps and “enhanced services” to enable IP-based linear and VOD services.

VU-IT will initially be available on TiVo-powered devices, such as Evolution’s recently re-branded, hybrid IP/QAM “eBOX,” but will also be deployed on other platforms, as well as mobile devices, Evolution said. Notably, GLDS announced Monday (July 18) that it had completed the integration of VU-IT! With its own BroadHub billing and customer management system, with Vyve on board as the first operator to deploy the integrated GLDS/NCTC solution. Vyve and TiVo announced their original partnership in February 2014.

As for the eVUE-TV approach, on-demand content is uploaded from the cable operator’s local VOD and transcoded, enabling an “exact replication” of the MSO’s VOD catalog in IP.

“Today’s agreement ensures that members of NCTC have access to the best on-demand content on one, easy-to-use platform at a price point that makes sense to the operator,” Marc Cohen, executive vice president of sales at Evolution Digital, said in a statement. “As a disruptor in the pay-TV industry, we are committed to driving growth for NCTC members and, with the deployment of eVUE-TV, we will provide an unparalleled viewing experience to customers.”

“We are pleased to offer Evolution Digital’s eVUE-TV on our platform, providing cable operators a low-cost solution to deliver VOD,” added Rich Fickle, CEO and president at NCTC.  “Evolution Digital continues to be a key partner for NCTC, from its pioneering of DTAs to now driving solutions that enable IP video services.”

Evolution’s latest NCTC distribution deal, announced ahead of next week’s Independent Show in Orlando, follows one with the co-op announced in February that centers on Evolution’s hybrid set-top box.

Among operators, WideOpenWest plans to use the Evolution/TiVo eBOX combo to underpin a new service called “SW!VEL” that will feature a skinny TV bundle that includes the major broadcast TV networks and a suite of OTT apps. WOW also plans to deploy eVUE and has put a cloud DVR on its product roadmap.

Update: Evolution’s agreement with WOW is separate from Evolution’s arrangements with the NCTC. But Evolution has “a number of irons in the fire” with tier-2 operators that are looking to take advantage of the NCTC accords, Brent Smith, Evolution Digital’s president and CTO, explained. Though Evolution will focus on the combination of its eBOX and eVUE platforms, he noted that eVUE is agnostic in the sense that the platform can be combined with other types of set-tops and CPE. 

A favored telecommunications analysts painted a bearish, if not bleak, picture for a loyal following of small and medium cable operators, as he considered new Internet rules and price regulations.

MoffettNathanson principal and senior analyst Craig Moffett, a longtime cable bull, gave the crowd at The Independent Show in Boston a mixed forecast for the next decade.

He reminded the crowd of the painful market forces that have begun to buffet cable operators – and programmers -- of all sizes at this moment in time. 

TV ratings are down, and programming costs are up. The biggest programmers are licensing more shows to OTT players. 

“They’re increasingly licensing content (to OTT) because it’s the only way to plug the hole in the income statement,” Moffett said.

He suggested that the trickle of OTT services could swell to a torrent that could do real harm to the traditional dual-revenue stream business model that has served programmers and cable operators so well for so many years.

And there is ample evidence that cord-cutting continues to accelerate, he said, triggering nods in unison around the crowd when he noted the pressure on the bottom line.

As if the current conditions weren’t bad enough, Moffett said the near future will be tougher to navigate. The one, big bright spot for cable operators from a revenue viewpoint – broadband service – may soon see the end of its heady growth as the market matures.

Penetration of broadband has been steady, but slower growth is ahead; almost everyone who can afford broadband or wants it, has it. Of the people who don’t have broadband, most are not ideal customers: Half of them make less than $25,000 annually, or are considered undereducated or don’t own computer, Moffett noted.

While he said he saw some bright spots with potential for growth, they were few. Potential growth lies in such areas as business services, and the growth of wireless demand holds promise for cable’s Wifi offerings. The most obvious option for revenue growth: Cable operators can leverage the pricing of broadband.

“It’s the one thing here that you have some flexibility to control, at least competively,” Moffett said.

But if they do, they risk the ire of the FCC, which is soliciting complaints. Title II “is absolutely about broadband price regulation,” he said, “and in that context lies the real challenge for the cable operators.”

Still, he said, Title II is not a certainty either, as the new rule could be quashed by a new congressional action or get tossed out by a federal  court or even left inactive by a new FCC chairman.

“This topic of regulation is unavoidable as you think about the next 10 years,” Moffett said.

BOSTON — A Harvard Business School professor suggested that cable operators may be thinking about new over-the-top competitors in the wrong way, and that they should focus on the customer, not the product.

Bharat N. Anand, a professor of business administration, spoke to a crowd of several hundred small and midsized cable operators at The Independent Show in Boston, on “Lessons from the Digital Transformation of Media.”

As cable operators look for ways to stem video subscriber losses, amid new competitors and consumer preferences, Anand suggested they dissect why customers were sampling OTT packages. And the answers may not be so obvious.

In business, he said, it’s deceptively hard to figure out whom — and with what — you are competing against. One of the biggest “competitors” for Black & Decker power tools, he said, were, of all things, neckties. Why?  Because both were the go-to gift on Father’s Day, men’s birthdays and Christmas.

“There are industry forces, but strategy is ultimately a decision” that has huge implications, he said.

Newspapers, he said, suffered in the digital age not because there was a news problem so much as it was a classified advertising problem.  Print became obsolete when searchable, free ads appeared.

“We better be sure what the fundamental reason is why people are leaving,” he said.

The upside is huge when consumers change tastes or technologies, and the companies that fail to act swiftly to respond are punished profoundly.

“If the problem turns up in your financials, it’s probably too late,” he said.

The music industry got hammered not so much by piracy, Anand said, as the format change to digital, a similar cyclical change that also came with LPs, and later, cassettes.  Artists have adapted. As the price of CDs dropped, artists focused on live acts.

Concerts, once viewed as elaborate promotions for CD sales, are now the cash cow, and CDs and digital music are a complementary way to promote concert tickets for artists, he said.

The key to successful strategies, he said, are “complementary” products offered to user networks. Complementary products include the National Football League and Fantasy Football, greeting cards and flowers, or tires and restaurant guides.  In the war for readers between the Sony e-reader and the Amazon Kindle, the Kindle had one key feature — it was wireless.  It was less about the reading experience than complementary experience of buying the book, he said.

He said that cable operators are too “ focused on products and not customers.” And he hinted they would be better served looking at complementary products and services, such as installation, recommendation and search.

“The history of media tells us that every time a we think something’s a threat, it turns out to be a be complement, starting with radio and music,” he said.

With all the government issues facing smaller operators these days, the masses assembling in Boston this week for the Independent Show could very well have their own version of a Boston Tea Party.

Members of the National Cable Television Cooperative and the American Cable Association have gathered to hash out thorny issues facing small, midsized and independent cable operators: retransmission consent deals that have left many in the dark, programming costs that are forcing some out of the video business, and the promise — or threat — of over-the-top TV options. There’s also the distant but persistent threat of cybersecurity. Multichannel News editorial director Mark Robichaux caught up with ACA president and CEO Matt Polka to hear about what’s on his mind, and his members’ (polite) policy demands.

MCN:Just this week you sent out a letter criticizing Media General’s TV signal black out of Mediacom cable customers — 14 markets, three Fox stations. The National Association of Broadcasters says retransmission consent is not broken. You and your members disagree. What will it take to fix it?

Matt Polka: Our good friends in the broadcasting business have their feet firmly planted in the regulations of the ’60s, ’70s, ’80s and ’90s, because it does one thing and one thing only, and that’s benefit them and no one else.

The world is moving on. I mean they’ve become dinosaurs holding onto and using these old rules in harmful, anti-consumer ways.

But the fact of the matter is this, ACA for years has been an effective advocate on the need for retransmission consent reform, which everybody but the broadcasters thinks needs to occur. Look at the facts: Since just 2013 there have been nearly 250 blackouts.

MCN:Who fixes this? Congress? The FCC?

MP: All of the above. The FCC can certainly make some changes, which they are starting to do and they have done over the last couple of years with their good-faith rules prohibiting coordinated negotiations. Congress has wide latitude in its own oversight to change the rules. I mean, they created the rules back in 1992 for a specific reason that does not exist today and hasn’t for some time.

MCN:When do you think Congress will act?

MP: At the beginning of the year, we all were expecting a larger rewrite in both the House and the Senate, and the net neutrality issues that came out of the FCC have had a significant impact on the communications agenda on the Hill. So both the Senate and House committees are looking at more limited, rifle-shot kinds of approaches. We expect to see some more from the committees here after the August recess.

The hope and the intent is to get started this year; start a process that continues into 2016 and into 2017 after the election is over.

MCN:Related to that are increased programming costs …

MP: We have demonstrated this year the harm of the bundle and how that also hurts consumers through price increases, but also limits our members’ ability to deploy more broadband in their communities. It’s a capital question and an operational question. If you’re spending more money on programming, that’s less that you have laying around to basically deploy broadband. So there is a definite effect.

MCN:You say programming costs prohibit smaller players from deploying more broadband — what happened after you filed that petition to the FCC?

MP: It’s still pending; the FCC has to put its report together and report to Congress. But we have shown very clearly there is definitely linkage between higher programming rates and diminished ability to provide the broadband that consumers want.

We have members that are saying to companies like Viacom and others, and I think we’ll see more of it as time goes on, “Your bundle is just not worth it by way of ratings, by way of what you’re asking, by way of your onerous carriage requirements. We are just not going to renew.”

MCN:Are ACA members prepared to compete with new OTT rivals?

MP: Yes. And, at the same time, they are also coming to Boston to really expand their knowledge base as well as to make sure they understand their options.

The first step is they recognize now that we are now broadband providers who also provide telephone and video. We are in a huge transition era right now where consumers as well as providers are sort of weaning themselves from the old linear traditional cable model to the expansive online, broadbandvideo model, where consumers no longer view video on cable by the channel but increasingly view video online by the program. So it is a really dynamic time, and we’re really on the cusp of the new world.

The Pittsburgh-headquartered American Cable Association (ACA), and its sister organization, the Lenexa, Kan.-based National Cable Television Cooperative (NCTC), have been, for many decades between them, advocating for and representing their hundreds of cable TV, phone, and broadband members in their business and governmental endeavors.

In the case of the NCTC, it stands as an amalgam of nearly 950+ small-to-mid-sized U.S. cable operators, typically negotiating with large to small programmers for mass-volume rates that are the core of multiyear programming distribution agreements. As for ACA, its home base staff of eight, together with its communications VP, Ted Hearn, and legal senior VP, Ross Lieberman, both in Washington, DC, run the ACA cable telecom and media policy show for its 850 cable system constituents.

Since 1997, the ACA has been lead by veteran policy influencer, Matt Polka, himself an experienced  lawyer (See, “Mixed Signals,” 12-10-2012, “The ACA’s Amazing Bandwidth), while the NCTC takes its direction from CEO and president Rich Fickle, whose NCTC tenure dates back to 2011, and who hails from corporate industry experiences with AT&T, Ascent Media, and Deluxe Entertainment.

ACA and NCTC today serve cable systems ranging from fewer than 100 subscribers to the largest, such as Mediacom, with roughly a million. As another example of the organizations’ scope is the roughly 7  mil. subscribers the ACA represents today in Washington, DC and in statehouses across the nation.

While serving July 28-30, in Kansas City, MO, as an opening panelist at the 2014 ACA/NCTC Annual Summit called The Independent Show, I had the opportunity to ask Matt Polka whom he recommended among the organizations’ up-and-coming leaders and as the better spokespeople for the two groups. Without hardly a hesitation, Matt barked out, “No problem, Gesner and Boyers.”

Robert Gessner, ACA Chairman; former NCTC chairman; and President, MCTV, Massillon, OH

The initial walk away I had from my half hour on the ACA/NCTC exhibition floor with Bob Gessner was that of a leader with fervent passion, unique articulation, and a tough competitive streak. When it comes to the ACA and small town cable in America, the guy can talk (which is meant only in a positive way)!

Gessner’s is a slightly larger than average ACA system, at about 40,000 current subscribers. He pointed out that for the ACA membership, the median system size is 900 subscribers, while the average size is about 4,000 subscribers.

Gessner’s initial focus was on the enhanced competition felt by ACA members these days. “Everyone these days is a competitor…Internet, TV, phone,” he mused. “So many of the smaller ACA and NCTC systems do not have the resources to be super active and aggressive,’ Gessner lamented. “Our industry must make the transformation from mere linear content offerings, and from being a tax collector for the content companies (who see the U.S. consumer as an annuity and a guaranteed periodic payment). Because that is unsustainable, and at the current rate, subscriber fees will double in five years, to $100,” Gessner challenged.

For the best future, the new ACA chairman believes that the proper transition for small-to-midsized cable operators will be one with an “infrastructure based on choice, and based on the subscription model; we will all get to a pure IP model, the only question is how soon.”

Yet, once that IP transition does occur, Gessner worries further about what he termed “the cable-ization of the Internet,” where the “content guys” quickly take over the Internet (just like they did in the 1970s with early national cable).

Finally, a few years down the cable road, Gessner – like his peers in this article – predicts the current cable content model will break, and “when it breaks, they will have to fix it,” he concludes. 

Patricia Jo Boyers, Vice Chairwoman , ACA; President, BOYCOM, Poplar Bluff, MO

The  current vice chairwoman of the ACA has been in the cable business in small town American for the past 22 years; she and her husband, Steve, still run BOYCOM together for their nearly 5,000 subscribers.

Boyers quickly reeled off four key small-to-midsized cable business challenges, when I asked for her list.

These are 1) industry consolidation 2) lack of choice 3) price increases and 4) subscribers having to pay for what they don’t want.

Her southeastern Missouri system has not yet fully upgraded from analog to digital, mostly due to monetary restrictions. That means today most of her system serves a broadband-only component. Although the Boyers’ BOYCOM has begun the costly upgrade process, which is well along, it has been tough, she says, because smaller systems, especially closely held ones like hers, do not have the access to financing that the larger ones do. Mrs. Boyers describes her home county as “perpetually impoverished,” which makes her task even tougher, she states.

When asked what she sees for her company five years hence, she believes her access into the homes of her customers will be lead by the Holy Grail of future residential telecom and media, that of the “smart pipe,” which offers a core Media Gateway-type product that vastly enhances access to content via multiple devices around the home. “Internet Protocol (IP) is about the future, and we have a bright future, because cable is best equipped to do that,” she concludes.

Jimmy Schaeffler is a telecom/media author and chairman and CSO of the Carmel-by-the-Sea-based streaming/broadband, broadcast, and pay TV/video consultancy, The Carmel Group (www.carmelgroup.com).

Kansas City, Mo. -- A growing number of small and independent cable operators are preparing to get rid of the very product that once drew customers to their business: TV programming.

With the wholesale price of programming increasing at a rate far higher than the retail cost, many operators attending The Independent Show here are generally ready to get out of the programming business and instead allow customers to pick and choose programming services with an IP, or over-the-top system.

At a panel titled “IP is the Future – Are you On Board?” at the annual convention of the American Cable Association and the National Cable Television Cooperative, operators focused on an option of making broadband the core product and allowing customers to deal directly with programmers.  Steve Weed, CEO of Wave Division Holdings, said smaller cable operators are focused on building -- and maintaining --  a gateway to the home that allows over the top players such as Netflix to be delivered to cable customers. Wave Broadband currently uses the Tivo platform, which features Netflix.

For its part, Cable ONE said it has inked a deal that will enable its customers to access Netflix directly through TiVo-powered HD-DVRs that it leases to subscribers.

“We don’t make any money on video,” said Weed, noting the 14% of gross margin on subscription video business, essentially passing along content to customers at cost. “We have a big incentive to get out of that.”

With the current wave of consolidation evident in several announced deals -- Comcast/Time Warner Cable; AT&T/DirecTV: 21st Century's offer to Time Warner -- panelists agreed that big mergers will accelerate the likelihood that basic-cable packages could go over-the-top.

“You’ve got this huge force of traditional media players,” said Jimmy Schaeffler, chairman of the Carmel  Group.  “They are getting more and more control and squeezing your margins harder and harder. They’re making it tougher and tougher to hang on to that video that you have…..”

Because programming rate increases, said Weed, are the No.1 complaint from customers, smaller cable operators would do better getting rid of their traditional TV video product and instead focusing on providing a gateway to the home that connects all the services – phone service, home automation, security – and helps “manage the complexity” for customers.

Regardless, broadband is expected to play an increasingly larger role as a product offering.  Schaeffler predicted a big part of small ops’ future is the Internet of things.  He reminded the audience that Mediacom Communications is working with John Deere to investigate the extension of high-speed broadband in rural Iowa to provide connectivity for automated farm machinery. Mediacom wants to improve agricultural efficiency by connecting commercial farming operations (and John Deere equipment) with wireless broadband services. 

“The Internet of things will proliferate and many of you will be in the middle of it rural America” said Schaeffler.  Younger users will continue their craving for more broadband in time, he said. “You have a pipe they will scream for, “ he said.

Commemorating the National Cable Television Cooperative’s 30th anniversary, executives from small cable operators across the nation and their families are going to Kansas City, Mo. for The Independent Show.

In the group’s hometown, NCTC and American Cable Association officials are gathering on Sunday, July 27 for registration, the first-timers' reception and a welcoming evening tailgate party, before getting down to business from July 28-30, when they will pursue networking opportunities, check out displays from over 140 exhibitors and engage in educational sessions, with key discussions centering on IP, TV Everywhere and, not surprisingly, rising programming costs.

This year’s event will unfurl at the Kansas City Sheraton Hotel at Crown Center. Check out the conference schedule here.    

Monday’s agenda is highlighted by a members-only meeting, where NCTC president and CEO Rich Fickle and ACA president and CEO Matt Polka will preside over the combined discussion for both organizations. The former group will conduct its 2014 board member election and present a financial overview and examine other business issues, while ACA will elect its board, distribute its member awards and provide an overview of the progress made during 2013-2014 and its plans for 2014-2015. Those events will be backed by an open discussion about key issues impacting members.

The conference’s opening general session follows: “IP is the Future – Are you on Board?” Moderated by The Wall Street Journal’s Shalini Ramachandran, the discussion will focus on the key trends and how members can align their resources to optimize the opportunity for the IP future and to ensure their place in it. The panelists: Wave Broadband CEO Steve Weed, Imagine Communications CTO Steve Reynolds, and Jimmy Schaeffler, CSO of consultancy, The Carmel Group.

Sigurd Jonny “Sig” Hansen, who leads the fishing boat Northwestern of Discovery Channel’s long-running reality hit, Deadliest Catch, will pilot conventioneers through lunch with insights as to how his vessel is one of the Alaskan crab industry’s leading producers.

On Tuesday, July 29, the ACA staff and its consultants will provide attendees with updates on a number of current issues integral to small cable operators retransmission-consent, program access, the proposed Comcast-Time Warner Cable merger, net neutrality, Aereo and the Connect America Fund, among them..

Also on the agenda are three key panels: “From the TV to Everywhere: All Things TVE” that examines the burgeoning platform; a financial discourse with “Wall Street Update for Main Street MSOs”; and a look at top approaches across home security and business services, as well as other growing parts of the cable product mix, during “The Maturing Customer Experience: Best Practices in a Changing Environment.”

Tuesday night’s showcase is the 30th Anniversary Celebration Dinner, honoring NCTC’s contributions over the past three decades. The Independent Operator of the Year Awards will also be presented.  

The Independent Show concludes on Wednesday, July 30, but not before attendees and their families can break breakfast bread  (and bacon and eggs) and  learn about the success story that is Jayhawks basketball from Kansas University head coach Bill Self, who along with his wife Cindy has established the Assist Foundation, a fundraising conduit for an array of youth initiatives.

Before the NCTC and Mid-America Cable Show co-hosted golf tournament at Tiffany Springs Golf Course drives into full swing, members can learn more about such “Emerging Revenue Opportunites” as smart homes, education and healthcare; receive the latest intel on how to handle and communicate to customers when negotiations stall or go wrong in “Surviving a Programmer Dispute: It’s Not the End of the World – Roundtable Discussion”; and learn how to maximize regional sports network agreements in “Acquiring Sports Rights: History and Challenges.”

For its part, the Mid-America Cable Telecommunications Association is holding its annual event alongside the Independent Show. More information about the Mid-America Cable Show is available here.