PITTSBURGH, September 21, 2009 - American Cable Association President and CEO Matthew M. Polka issued the following statement in response to Federal Communications Commission Chairman Julius Genachowski's plan to adopt more expansive Net Neutrality regulations that would apply to ACA members and other entities that provide broadband access:
"If the FCC moves forward with its rulemaking, ACA urges the Commission to ensure that broadband content providers are similarly prevented from imposing closed Internet business models that are even more problematic today than the concerns raised about the ability of broadband access providers to distort various forms of Internet commerce and competition.
"For the last few years, some in Congress and at the FCC have been pushing for rules that would prevent broadband service providers, particularly the larger ones, from operating their networks in ways that would unfairly prevent consumers from accessing all lawful Web-based services and applications. "
"However, during that same period, some Senators, House lawmakers and FCC Chairmen have been missing the far greater threat to the `Open Internet' ideal, which is how media conglomerates and Web giants are using their leverage to assure themselves preferential treatment on the networks of Internet service providers at the expense of other Web-based services, applications and consumers.
"ESPN360, owned by the Walt Disney Co., is pioneering such a closed Internet business model, under which broadband service providers must pay ESPN fees based on their total number of broadband subscribers, forcing those who have no interest in viewing sporting contests over the Internet to subsidize those who actually want to access ESPN360 on a regular basis.
"ESPN, the largest and most dominant sports programming business in the country, uses its leverage in the satellite and cable marketplace to coerce broadband service providers into giving ESPN360 preferential treatment on their networks at the expense of consumers on the one hand and other Web-based services and applications that might seek to compete against them on the other. How can a Web-based sports site fairly compete against ESPN on the Internet when ESPN has secured for itself a substantial per-subscriber fee from every broadband customer in the country?
"Disney refuses to market ESPN360 directly to consumers because the sports media giant believes that there's not enough individual interest in their service to support a subscription model in which those who want the content pay for it. Disney also refuses to compete head-to-head against other sports-based Web sites that have no choice but to roll out such a direct-to-consumer model because they don't have ESPN's clout to coerce broadband providers, particularly those who are small, into becoming broadband toll collectors for them. ESPN is exploiting its dominance in its other markets to foreclose competition in the potentially billion-dollar market for streaming sports content over the Internet.
"These business models are bad for competition and bad for consumers. Disney's quest to extract wholesale license fees on a per-capita basis from broadband access providers will drive up the cost of broadband for all existing customers; put the price of broadband service beyond the means of those on the lower end of the income sale; and obviously delay the arrival of affordable broadband access for every American.
"This FCC Chairman takes Net Neutrality with utmost seriousness, but a holistic examination of the Internet marketplace won't be complete until ACA's ongoing calls for Content Neutrality are given the time and attention they deserve from FCC regulators."
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About the American Cable Association
Based in Pittsburgh, the American Cable Association is a trade organization representing more than 900 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/
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