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ACA President & CEO Polka Calls For Small Cable Unity In Tough Regulatory Climate

American Cable Association President and CEO Matthew M. Polka told the independent cable community that unity is essential in order to overcome the efforts of powerful special interests and to achieve the consumer-friendly reforms sought by ACA and many others.

Polka's call for joint progress came in opening remarks to hundreds of ACA members gathered here for the 5th Annual Independent Cable Show, an important business conclave hosted and organized by ACA and the National Cable Television Cooperative (NCTC), a Lenexa, Kansas-based group that purchases programming and equipment for U.S. cable operators.

In his remarks, Polka ran through the key issues facing the independent cable community, from the Comcast-NBC Universal merger to retransmission consent reform, broadband reclassification and alternatives to current FCC set-top box mandates.

"On every issue we are engaged, decisions that run counter to our interests will exact a serious penalty," Polka said. "In such an environment, I will do everything in my power to ensure that the entire ACA team is pulling in the same direction and that we are capitalizing on every opportunity to win the fight before us."

On the Comcast-NBCU transaction, Polka said ACA has called for meaningful conditions to prevent the Comcast-NBCU merger from inflicting serious harm on consumers and competition by unreasonably raising the price of its marquee cable and broadcast channels in an effort to expand its bottom line and drive up the operating costs of direct competitors, including many ACA members.

"I'm confident that ACA is effectively shining a spotlight on the deeply troubling aspects of this transaction. But make no mistake about it, we have our work cut out for us, and we must stay committed until significant conditions are imposed on the merger by the FCC and Department of Justice," Polka said.

On retransmission consent reform, Polka said that after many years of fighting broadcasters all alone, a coalition reflecting business, consumer and public interest viewpoints has taken form and officially asked the FCC to open a rulemaking. In a petition filed in March, the coalition, now known as the American Television Alliance, asked the FCC to launch a rulemaking proceeding to consider rule changes that would prevent abrupt signal-pulling by TV stations and protect consumers from onerous retransmission consent fee increases.

ACA, Polka noted, believes the FCC also has to examine whether TV stations should be allowed to use their market power to charge small cable providers far more than they charge ACA members' direct competitors.

"For real reform to happen, the FCC should prevent broadcasters from charging excessive and discriminatory fees to small cable operators. The agency also needs to restrict the ability of two or more "Big Four" TV stations in the same market from jointly negotiating retransmission consent in a bid to reap outrageously high fees," Polka said.

On broadband reclassification, Polka noted that ACA expected the FCC would engage in closer supervision of broadband access providers, which could have serious consequences for ACA members providing expanded broadband services. In a recent move, the FCC proposed applying some Title II common carrier regulations to cable broadband providers for the first time, in an abrupt departure from the light regulatory approach in place at least since 2002.

"I cannot overstate the business significance to ACA members of the policy change that FCC Chairman Genachowski is attempting to effect. Imposing common carrier obligations on ACA members will significantly increase administrative recordkeeping, reporting and filing burdens and might result in direct economic regulation of broadband access providers," Polka said. "That's why the FCC must conduct a formal rulemaking and quantify the burdens of reclassification on small operators and take steps to lessen or eliminate those burdens."

On Set-Top Box reform, Polka was optimistic and pleased that the FCC has dropped strict reliance on the expensive CableCARD regime in favor of more affordable and consumer-friendly alternatives.

"I'm hopeful that by the end of the year, the FCC will allow all cable operators to deploy inexpensive, integrated HD-capable set-top boxes," Polka said, cautioning that the agency might limit relief to systems with no more than 550 MHz of capacity.

The FCC might replace the CableCARD with something it calls the "AllVid" solution, Polka said, adding that his trade group has not taken a stand on the viability of "AllVid" as a cost-effective innovation.

"I'm concerned that the ‘AllVid' approach could come with large per-headend or per-customer costs that would be very difficult to recover from a small customer base," Polka said. "I hope the FCC does not repeat mistakes of the CableCARD era and hit ACA members with rules that divert valuable capital resources away from the deployment of advanced services, including broadband, in rural and smaller markets."

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