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PROJECT WRONGWAY: ACA Warns That A&E's Takeover Of Lifetime Will Produce Higher Cable Rates and Less Channel Choice

Control of Lifetime by Disney, Hearst, and NBC Universal Will Allow the Media Giants To Further Leverage Their Market Power To Drive Cable Bills Higher and Crowd Out New Voices

PITTSBURGH, August 28, 2009 - The American CableAssociation warned that A&E Television Networks' acquisition of LifetimeEntertainment Services will produce higher cable bills and mean less channelchoice for consumers in rural America because the media conglomerates incontrol of A&E insist that small, independent cable providers consent toconsumer-hostile pricing, terms and conditions.

"Media conglomerates Disney, Hearst and NBCU, whichwill take three-way control of Lifetime through their interest in A&E, usetheir market power to force small cable operators to pay unfair andunreasonable wholesale rates and distribute channels that their customers donot want included in their programming packages. A&E's takeover of Lifetime-- call it Project Wrongway -- will further enhance the power of media giantsto discriminate against video consumers served by ACA members in thousands ofrural communities," ACA President and CEO Matthew M. Polka said.

ACA has urged the Federal Communications Commission torectify market abuses in the wholesale cable programming market, which iscontrolled by a handful of media conglomerates that effectively dictate how thecountry's most popular broadcast and cable programming is consumed in millionsof TV households.

"Media giants coerce smaller operators into acceptingprices, terms, and conditions -- including obligations to put channels likeA&E, Lifetime, History Channel and others on their systems' most basictiers -- which force consumers to pay for programming that they rarelywatch.  With the Lifetime Networks aboutto become part of A&E, consumers shouldn't be surprised to see Lifetime'sless popular channels, like Lifetime Movie Network and Lifetime Real Women,migrating from digital tiers to basic cable, and see their monthly cable billsgoing up as a result," Polka added.

"These suspect methods lead to higher cable rates and stealchannel capacity that could instead be used to launch independent cablechannels, make broadband upgrades and roll out digital phone service, allhighly sought by consumers," Polka said. "The FCC has an openrulemaking (07-198) on this matter, and the agency should address theseconsumer issues."

Polka added that Lifetime is one of the few national cable networksto not reach a distribution agreement with the NationalCable Television Cooperative, an organization that negotiates mastercontracts with programmers and equipment vendors on behalf of ACAmembers and other cable operators.

"A&E, which has acontract with NCTC, should use its new ownership of Lifetime to ensurethat Lifetime signs its first agreement with NCTC," Polka said.

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About the AmericanCable Association

Based in Pittsburgh, the American Cable Association is atrade organization representing more than 900 smaller and medium-sized,independent cable companies who provide broadband services for more than 7million cable subscribers primarily located in rural and smaller suburbanmarkets across America.  Through active participation in the regulatoryand legislative process in Washington, D.C., ACA's members work together toadvance the interests of their customers and ensure the future competitivenessand viability of their business.  For more information, visit http://www.americancable.org/

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