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Small Cable Operators to Congress: Help!

Patrick Knorr of Sunflower Broadband, representing the American Cable Association, said the cost of programming has grown exponentially, telling a Congressional committee it would be "shocked" to know how much they have to pay for programming, but that there was no way for them to find out because of nondisclosure terms in their contacts.

That came in prepared testimony for a House Communications Subcommittee hearing Thursday on video competition.

Touching on a hot-button issue with baseball and football fans on the Hill, Knorr singled out sports programming, saying it was the most "illuminating example," calling
it a "significant percentage" of overall bills.

Knorr said Congress should require "transparency" in cost per channel for sports, which would expose the disparities between what large and smaller operators have to pay for it.

He also warned that "flaws" in the retransmission consent regime should not be transferred and "hard-baked" into the online video distribution model.

ACA would like to see a Fox/DirecTV-like merger conditions placed on those negotiations, including streamlined arbitration, no blackouts during dispute resolution and automatic retransmission consent for smaller operators.

It also wants access to satellite local-into-local signals on the same rates and terms among a host of other things.

While Knorr argued that power and control is too concentrated in big players, in his testimony, Adam Thierer, new head of free market think tank, the Progress & Freedom Foundation, suggested that traditional media suppliers may have too little power, rather than too much.

With "information overload" from the volume and diversity of options, he argued, "the viability of traditional media operators is increasingly in doubt since they lack pricing power and the ability to control when, where, and how their content is delivered and consumed."

He said traditional media companies could be in trouble. "[N]ow certainly isn't the time to impose new rules and red tape that could hamstring their ability to respond to new competitive pressures."