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ACA, Independent Programmers Call On FCC To Curb Forced Bundling

Harms From Bundling Include Higher Bills, Less Diversity, More Consumer Dissatisfaction

PITTSBURGH, February 24, 2017 - The American Cable Association and a trio of independent programmers told the Federal Communications Commission that forced bundling is the single most important obstacle to a thriving marketplace for independent programming.  They urged the FCC to promote genuine competition and viewpoint diversity for consumers.

"The record so far reveals the widespread agreement that the FCC must address forced bundling of unwanted channels to meaningfully aid diverse and independent programming, and the viewers who value such programming.  Bundling is the principal concern not just of ACA's members, but also of the independent programmers themselves," ACA President and CEO Matthew M. Polka said.

ACA set forth its views in joint reply comments filed on Feb. 22 with MAVTV Motorsports Network; co-owned One America News Network and AWE (formerly WealthTV); and Ride TV.  The parties filed these reply comments in an FCC rulemaking that is focused on ways to promote the availability of diverse and independent sources of video programming.

Bundling is an industry practice where large, powerful programmers require multichannel video programming distributors (MVPDs) to clog their systems with unpopular channels in order to carry more popular channels viewers actually want. This leads to higher cable bills and less consumer satisfaction because pay-TV channel guides become crammed with unwanted programming.

ACA and the independent programmers pointed out that if an MVPD seeks to carry desirable channels owned by the nine largest media groups, it will end up having to carry a minimum of 65 channels. This channel bundling often eliminates the possibility of MVPD carriage of independent programmers.  Making things worse, the less-popular conglomerate channels often feature marathon runs of warmed-over content that once aired elsewhere, rather than original programming offered by independent channels.

ACA and the independent programmers stressed that the FCC's failure to address channel bundling first would likely mean even the most effective regulations targeting market-distorting "most-favored nation" (MFN) clauses and unreasonable alternative distribution method (ADM) provisions would prove unavailing.  They pointed out that carriage negotiations cannot even begin if capacity constraints caused by bundling mean the MVPD cannot carry the channel under any offered terms.

ACA and the independent programmers said the FCC in addressing ways to improve the market should also examine the negotiating tactics of broadcasters, which include aggressive bundling demands that violate their legal obligation to negotiate in good faith.

"At a minimum, the FCC should eliminate bundling from the list of conduct that is presumptively consistent with good faith conduct in broadcast carriage talks.  This practice has real, anti-competitive implications, making it more difficult for channels not affiliated with a top-rated broadcast station to obtain carriage," Polka said.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 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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