Retrans: A Big Hole in Telecom Bill

The roughly 900 independent cable operators represented by the American Cable Association are encouraged by many of the provisions in the proposed Senate Telecommunications Bill, S. 2686. But its members will be even more encouraged if the Senate addresses problems caused by the unintended consequences of prior broadcast carriage legislation.

The bill seeks to create a level playing field for cable operators, who have been serving their communities for years, and new entrants — the Bell companies. Parity is good. Like services should be treated alike. Local franchise control is better, but if the Senate revises current franchise rules it should ensure that no community is left behind because of race or economic status. New entrants should not get a free ride to choose the communities they want to serve.

One key provision of the bill is a necessity for smaller cable companies to enter the voice business: Interconnection rights. It is imperative for independent operators to be able to port numbers over from prior communications suppliers. Being able to offer customers the ability to keep their existing phone number is an important convenience and incentive to try our service.

Another key is the ability to provide customers with analog television sets a “down-converted” digital signal for broadcast television, even after broadcasters convert to digital transmission. As a cable company with several small head-ends, we cannot right now afford the equipment necessary to provide analog-TV customers with a digital broadcast signal and converter set-top box. Without down-conversion, millions of people will lose access to broadcast television signals after the transition date in February 2009.

Our MSO, New Wave Communications, has invested $14 million and plans to invest another $18 million to build broadband networks in rural areas and provide our customers with the best internet experience available. If private companies like Google and Microsoft are given unfettered access to our networks, it will mean slower speeds at higher prices for our consumers. Giving the FCC the right to monitor broadband providers is the right approach to this issue.

The issue that has the most impact on a cable operator’s business — retransmission consent and the tying and bundling of content — is missing from this legislation. Through such tying and bundling, broadcast groups and media conglomerates have effectively taken over my video pipe by saying they’ll withhold their signal, creating havoc for customers.

By government fiat given to the broadcasters, customers are forced to pay for ever-increasing retransmission consent demands while also being forced to take cable networks they don’t want, all for the right to receive free over-the-air TV. If the Senate does not address retransmission consent, then two things are a given: One, basic and expanded basic cable rates will rise and rise. Two, more and more unwanted, and often indecent, programming will be shoved onto consumers — and they will be given no choice.

The Senate bill is a good starting point. However, to ensure consumers in smaller markets and rural America receive the best in voice, video and data from cable, the Senate must tackle the issue of retransmission consent.