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Market Abuse Evidence Mounting as FCC Considers New Wholesale Programming Rules

Retrans Complaints Paints Clear Picture of Wholesale Bundling and Exorbitant Pricing

Pittsburgh, October 28, 2008 - Yet another small cable operator has filed a complaint with the Federal Communications Commission (FCC) alleging abusive retransmission consent negotiating tactics and violations of the Commission's good faith rules by broadcasters.  In a 31-page complaint filed with the FCC dated October 24, the Lafayette Utility System (LUS) details bundling requirements, excessive fee demands, and repeated "take-it-or-leave- it" offers by ComCorp, White Knight Broadcasting and their representative.  This filing, reported by Communications Daily Monday evening, comes at a time when the Commission - under the leadership of Chairman Martin - is scheduled to consider actions to curtail wholesale bundling requirements and price discrimination on the part of broadcasters and programmers.

"Market abuse and abusive negotiating tactics on the part of broadcasters to extort higher fees and forced carriage of undesired channels by cable operators of every size is the worst kept secret in the industry," said ACA CEO and President, Matthew M. Polka.  "All year long the programmers and broadcasters have claimed that the marketplace works, and operators can purchase programming on a standalone basis; however, the evidence proving otherwise keeps mounting at the FCC. The Commission could not ask for more clear evidence that corrective measures must be taken as part of the wholesale programming rulemaking.  LUS is only the latest in an increasing number of operators who, quite simply, cannot deal in this increasingly abusive climate and have turned to the FCC for help.  We have every confidence that under the Chairman's leadership, they will get it."

Further background information from LUS's complaint can be found here and here.

On October 16, the American Cable Association (ACA) filed comments in support of complaints made by Trust Cable TV, Inc. (available here), and Baja Broadband Operating Company (available here).  On  September 18, Trust Cable TV filed a complaint (available here) against broadcasters WGMB and WVLA for their abusive negotiation tactics in the wake of Hurricane Gustav, and requested an emergency stay preventing the broadcast station owners from pulling their signals until Trust can fully recover from the storm and the proceeding concludes.  Baja Broadband's complaint (available here), also filed that day, against El Paso station KTSM details "take it or leave it" refusals to negotiate and other abuses of market power.  Baja also requested the Commission to grant a stay preventing the broadcaster from pulling its signal during the pendency of the complaints.  On September 22, Paul Bunyan Telephone Cooperative filed a complaint (available here) against Granite Broadcasting stations KRII and KBJR and Malara Broadcasting station KDLH detailing these stations' violations of the good faith rules by engaging in unilateral offers and engaging in other abusive negotiating tactics.

In a January 4 filing (available here) with the FCC, the ACA urged the FCC to adopt new rules that would allow small cable operators the flexibility to provide consumers with a superior television service, including a wider variety of tiers, better value, and more independent programming.  The comments were filed as part of the FCC's wholesale programming rulemaking (MB Docket No. 07-918), which is examining wholesale bundling and other abusive practices by broadcasters and programmers.

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About the American Cable Association

Based in Pittsburgh, the American Cable Association is a trade organization representing 1,100 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 www.americancable.org.

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