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ACA to FCC: Cable Set-Top Plan Isn't for Smaller Ops

Smaller cable operators have told the FCC they should not be subject to either the FCC's "unlock the box" set-top proposal or the National Cable & Telecommunications Association's "ditch the box," app-centric alternative.

Part of NCTA's proposal was that it not apply to operators with fewer than a million subs—NCTA has some of those, too—and ACA, which represents small and mid-sized operators, says it is fine with that.

It also continued to argue that smaller MVPDs should not be subject to the commission's proposal because they are already offering innovation and choice, because compliance costs would not be offset by revenues, and because their participation is not necessary for the FCC proposal to succeed.

In meetings with top FCC staffers, American Cable Association execs said smaller operators have little margins on set-tops, so no incentive in limiting access to alternative navigation devices.

ACA pointed to the "unprecedented" costs the "ditch the box" proposal will incur, including deploying IPTV infrastructure, developing the HTML5 application, upgrading plants in many cases to ensure sufficient bandwidth, and more. And given that the app is free, recovering those costs would be tough for smaller operators.

ACA estimates the compliance costs at $2 million per system compared to the "over $1 million" it estimates for complying with the FCC "unlock the box" plan.

It is proposing a Jack Spratt and spouse approach: "ACA believes that by delivering the choice of app-based access to pay-TV content to most U.S. homes, development of the 'App' solution by large MVPDs will complement the innovations that smaller MVPDs are offering their customers," it told the FCC officials.

It also pointed out that with DBS providers participating in ditch the box, there would be alternatives in pay TV navigation options in markets large and small.