Small Operators, Big Issues

WASHINGTON — American Cable Association president Matt Polka has a lot on his plate — he didn’t even have time to fill out a March Madness bracket, he said — with such issues in mind as the proposed Comcast- Time Warner Cable merger, reauthorization of the Satellite Television Extension and Localism Act (STELA), a Federal Communications Commission ownership order and FCC budget oversight hearings to monitor. There’s also this week’s annual ACA Summit, where Polka’s constituency of small and midsized independent cable operators gather to celebrate victories but not rest on their laurels, he suggested.

The ACA has gotten plenty of traction in Washington of late, with compliments from the FCC on its data related to TV-station joint-sharing agreements and movement on a long-dormant FCC retransmission-consent docket — an issue on which Polka’s group has taken the lead. The FCC has framed itself as a data-driven agency, and Polka suggested that one of the ACA’s keys to success is providing some of that motivational force.

For the event this week (April 1-3 at Washington’s Grand Hyatt), ACA has corralled FCC chairman Tom Wheeler for a speech and has snagged Aereo founder Chet Kanojia to weigh in on Aereo’s broadcast-disruptive technology, whose case ACA plans to back at the Supreme Court.

On the eve of the ACA Summit, Polka talked to Multichannel News about the big merger, why data trumps all arguments and why he thinks the issues facing the American Television Alliance, the retransmissionconsent reform advocacy group, are universal. An edited transcript of their conversation follows.

MCN: What are the most pressing concerns for the ACA in Washington?

Matt Polka: We look at what is moving this year that actually can make a difference. Of course, that is the STELA reauthorization with reform efforts underway, as well as the chairman’s announced order on coordinated negotiations (with broadcasters). So, those are two top-level issues that we are engaged in right now to begin to move reform efforts forward.

Then there will be further review in 2014 under a Communications Act update, so those are the toplevel issues.

MCN: What else?

MP: The second tier of issues relate to the video marketplace, with prices, terms and conditions that continue to escalate, with the bigger and bigger bundles that have an impact on our members’ ability to provide broadband service when they are forced to carry both the high-def and standard-def signals of the major media conglomerates.

Although that is not an issue directly in the FCC’s or Congress’s wheelhouse, it does impact a number of questions that have been raised, whether by Sen. Jay Rockefeller [D-W.Va.] in his online video access bill or Rep. Anna Eshoo’s [D-Calif.] bill focused on online access to video programming.

MCN: Where does the ACA stand on the Comcast/ Time Warner Cable merger proposal?

MP: We are waiting for Comcast and Time Warner [Cable’s] application to be filed so we can begin to analyze that deeply from an economic and legal perspective before we file comments. But we do think there are specific harms that will need to be addressed, whether [they’re] related to availability of programming to competitors; the rising cost of programming to others other than Comcast and Time Warner because of what is expected to be their lower cost of programming; how that affects competition in the marketplace; and certainly Comcast’s dominance from an online perspective, controlling some 40% of the broadband market that’s out there.

MCN: Are you also looking for another change to the FCC’s program-access rules?

MP: We have asked the FCC to make a very slight modification to its current rules that would allow a buying group like the National Cable Television Cooperative to take advantage of the rules.

MCN: They can’t do that now?

MP: Today, the standard in the definition really imposes full liability on NCTC as a buying group. If one company defaults on its programming payment, the current definition requires NCTC to be responsible for every cable operator under the agreement.

MCN: What’s wrong with that?

MP: Frankly, that isn’t the way that NCTC programmers have decided, among themselves, to deal with such a situation.

MCN: What’s the holdup? Hasn’t the FCC already signaled it agreed with you?

MP: They do; that is the irony here. In the Further Notice of Proposed Rulemaking on the programaccess rules, the FCC tentatively concluded that the definition should be changed. We keep reminding them of that.

But what they have gotten is a lot of pushback from companies like Comcast-NBCUniversal, a vertically integrated programmer, saying, for one, that vertical integration is on the decline. [Laughs.] They certainly can’t say that now, because with their merger they are now on the incline.

The second thing they have said is actually kind of preposterous, which is that you can’t make this change to allow NCTC greater access to the program-access rules because they will have too much leverage in the negotiations for programming content. Frankly, it is just ludicrous that a company like Comcast/NBCU, as well as AMC [Networks, majority controlled by Cablevision Systems’ ruling Dolan family] and others would say, as they have, that this change would give a buying cooperative like NCTC too much leverage.

So, the FCC just needs to do what it said it would do, which is tentatively conclude that the rules should be changed.

MCN: What about network neutrality?

MP: That’s a big issue, because it ties into our members’ future. It has been very interesting to watch the movement since the court’s order to overturn the FCC’s decision. We supported that [decision] when it was moved forward by [former FCC chairman Julius] Genachowski. We supported the net-neutrality principles.

MCN: So your members aren’t using the rule hiatus to start blocking and degrading Internet traffic?

MP: Since the court’s decision, our members have not taken any action as ISPs to take advantage of what is a lack of regulation in the marketplace. Rather, we expect to be working with the chairman as he moves forward. Net-neutrality concerns will be an important part of the Comcast-Time Warner merger. And we will be active on that front.

MCN: Are there conditions that would make the Comcast-TWC deal acceptable to ACA?

MP: Let’s put it this way: We have not said officially whether we outright oppose the merger and ask that the FCC or [U.S. Justice Department] deny it. I think it is reasonable to say at the very least there is harm in the merger.

MCN: ACA has gotten some traction on some major issues this year, whether joint-sales agreements (JSA) or helping move the long-dormant retrans docket. In fact, on a conference call with reporters, FCC officials cited ACA data specifically in outlining their JSA move.

MP: I think that if we have had any influence, which I know we have, it is because we have sought to be very serious and credible with our responses with providing data to the regulatory agencies.

You hear so much by way of argument, but so little by way of data. That is why it has been very important for us in our work to bring them direct responses from our members, surveys, economic data and analysis, and other credible information that is helpful in making a decision. It is not just an argument. It is datadriven, backed up by analysis. I think that has made a difference.

Second, I would say the strength of our team in Washington, led by Ross Lieberman [vice president of government affairs] and our friends at [law firm] Cinnamon Mueller, in providing credible responses in direct response to the regulators’ questions. Often times, it seems like everybody comes to the commission and answers the questions they, the advocates, want answered, rather than what the commission may be asking.

Finally, it comes back to our members and our board thinking long-term rather than short-term, realizing this is a long-term business and you have to build a solid foundation.

MCN: Speaking of help from the board, did it help the retransmission-consent argument to have the NCTA board decide to get more engaged in the issue?

MP: We have been quite engaged on the issue with them. As you can see with some of their statements recently, I think they also realize reform is necessary. I have appreciated their statements on retransmission consent and continue to encourage their involvement in the issue.

But, going back to the early days, we have really created our path in the interest of our members, and the issues they are most concerned about with our uniquely independent voice. And it has been gratifying over the years that through our efforts, and thanks to the broadcasters, who created more blackouts in 2013 than in any year before that, we’ve underscored the need for reform and others have gravitated to that.

We are pleased to be part of the American Television Alliance, which is a broad, diverse group of cable, satellite, telephone, public and consumer interests that have come together to say retrans reform is necessary.

MCN: Chairman Wheeler at the March 31 meeting is planning to limit JSAs and coordinated retransmission- consent negotiations. What else is needed?

MP: There is more that needs to be done. I think the opportunities through STELA reform and the chairman’s order on coordinated negotiations are fantastic. We truly appreciate what the chairman is trying to do, because he has recognized an issue that needs to be addressed forthrightly and he is doing it forthrightly. But looking beyond this, there is a clear need for greater reform efforts as part of a Communications Act update.

I truly believe that the time has come for Congress to engage in that broader review because we live in a marketplace today that has so fundamentally changed, even from the last rewrite in 1996, let alone 1992 or even earlier.

Communications laws and regulations were designed in such a different way when you look at silos of regulation compared to the dynamic, changing nature of the marketplace, where one provider is involved in all aspects of services, whether it is video, phone, wired or even wireless broadband service. So, it really underscores the need for broader reform.

Consumers are already moving in such a way to change the nature of the marketplace irrespective of laws and regulations as they move toward consumption of greater online video. We certainly want to be part of that change effort after STELA is reauthorized in 2014.

MCN: So, does that mean you think video reforms are better made in the Communications Act than in STELA?

MP: No, I actually think it is time for reform efforts to begin. We have encouraged members to be engaged in not only [the] House Commerce [Committee, where a draft of STELA was approved in the Communications Subcommittee last week], but also the House and Senate Judiciary committees and Senate Commerce [all have jurisdiction over the bill]. The time to start this is now.

MCN: Aereo founder Chet Kanojia is speaking to the convention. Do you support Aereo?

MP: Yes. In fact, we expect to be active in the Supreme Court, filing in support of Aereo as a new, disruptive technology to provide over-the-air signals to broadcasters. [Amicus briefs to the Supreme Court in support of Aereo are due April 2]

We think it also is important to support new technologies that want to provide services to consumers. We can’t bury our heads like the broadcasters are doing and say, “No, we can’t support new technology.” Basically, what the broadcasters are doing is trying to solidify regulatory gains they have had for 50 or 60 years. We think it is high time that the court embrace new technology and allow it to flourish because it is to the benefit of consumers to do so.

MCN: Broadcasters, in their fight against the FCC tightening JSAs, have argued that cable operators also jointly negotiate with relative impunity.

MP: Whether it is the STELA debate or coordinated retrans negotiations, I have seen a lot of smoke and mirrors here from the broadcasters and their arguments to try to say those bad old cable guys are doing just the same things to collude as we are, or to evade current laws and regulations.

I don’t believe that’s the case from our perspective at all. Frankly, what I see is a desperate attempt by the broadcast industry to maintain its grasp on outdated regulations that are clearly harming consumers. It’s raising prices, it’s causing blackouts, it’s denying availability of new technology that consumers want and are using.

MCN: Let’s turn to the summit. How is registration shaping up?

MP: We expect registration will be at or above last year. We told our members that our time is now. That is the summit tagline, but we really believe it.

We have worked very hard over 20 years to establish firm relationships in Washington, and I think that our members have done a tremendous job of identifying their communities to their lawmakers, as well as the FCC, and I think they are seeing the benefit of it. They see that their commitment to Washington can indeed move mountains, and that is what they are seeing here now.

We are pleased to have Congresswoman Anna Eshoo and Congressman Peter Welch [D-Vt.] and chairman [Wheeler], as well as a broadband panel, to look ahead on those issues.

MCN: What would you like to hear from the chairman in his speech to your members?

MP: I’m fascinated by the chairman as someone who is a businessman, someone who has worked from an advocacy perspective, someone who has worked on policy, as well as his history background. [Wheeler is an amateur historian, with a focus on President Abraham Lincoln and the Civil War.]

I think he brings a unique perspective that I don’t know we have seen in many years. I am really just fascinated at how someone with that diverse background really processes the politics and business issues and works to develop policy.

MCN: Have you met with him?

MP: One time early on in his tenure, when he invited a number of association heads for a visit. I was refreshed by his review of his work, as well as ours, looking at what he calls the network compact that exists between providers and consumers and keeping that compact strong, and recognizing that we in the industry have a role to play to help the public interest.

It is interesting to hear someone like chairman Wheeler say: “My role is to basically watch that things are in the public interest. If you do your job, I don’t necessarily have to do as much of mine.”

But he also said many times that he is willing to do what needs to be done from a regulatory perspective, and I take him at his word.

I think the commission is in as good a place today as it has been in a long time.

ACA Summit Stats

April 1–3

Washington, D.C.

Keynote Speakers: FCC chairman Tom Wheeler, Aero founder Chet Konojia, and Reps. Anna Eshoo (DCal.) and Peter Welch (D-Vt.)

SOURCE: American Cable Association


Matt Polka

Age: 55

Hometown: McKeesport, Pa.

Education: B.S., Journalism (News-Editorial), West Virginia University (1982); J.D., Duquesne University School of Law (1986)

ACA Resume

Joined Small Cable Business Association at its founding in May 1993 following passage of the 1992 Cable Act. (It was an all-volunteer group until 1997.)

Served on the SCBA Board , 1994-97; and the Executive Committee, 1995-97.

Named president in May 1997.

SCBA changes name to American Cable Association in 1999.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.