ACA: Retrans Hurting Small Cable

ACA representatives and member companies met with the FCC's Media Bureau last week to discuss the latest rounds of retransmission consent negotiations between cable companies and local broadcast stations. The cable interests pressed the agency on broadcasters' assertion that the current regime need not be changed as deals eventually get done... However, the ACA says, those deals include "massive" fee increases that will undoubtedly lead to consumer rate hikes.

The cable group said retransmission rules must be modernized to meet today's evolving marketplace, warning the FCC not to be "lulled" into the belief that since deals eventually "get done" that the system is not broken. Conversely, the ACA and its members urged the agency to focus on the impact these fee increases will have on smaller operators, and ultimately, subscribers.

In a letter to the FCC, ACA legal reps said "Across-the-board, retransmission consent fees rose substantially higher than those charged in the preceding cycle" forcing smaller operators to raise subscription rates for essentially the same product. In one particular case, the group cites fee increases incurred by WOW! of 88% and 117% during the two most-recent cycles, "effectively doubling every three years." WOW! VP of Programming Peter Smith told the agency that due to such costs, the operator is no longer able to offer out-of-market stations and has been forced to drop several indie cable nets.

In the initial discussions, several operators told the FCC's Media Bureau that their relatively smaller footprint is "a significant factor" in the ability to reach reasonable deals. So while a failed agreement may mean very little to a station's bottom line, the ACA said it threatens the very sustainability of a company's operations. "Unlike larger operators that may serve dozens of markets or more across the country, smaller operators, who may only operate in only a few markets, are more financially vulnerable to subscriber losses related to the loss of a Big 4 network in a single market," the letter said.

Another major issue cable is urging the FCC to address is coordinated retrans negotiations by separately owned same-market broadcasters. Citing another WOW! market (in Columbus), the ACA wrote that the operator faced a 138% y/y retrans fee increase from a single broadcaster that controlled four area stations (including two Big 4s), representing a 57% premium over its average rates. The group said aggregate retransmission consent costs now range from $3 to $5 per subscriber per month, which will likely lead to basic tier rate increases of nearly the same. •

Global Broadband Growth Fastest in 5 Years

IPTV providers had their strongest quarter ever in Q411 leading to more than 597M subscribers worldwide now having broadband services. The impressive growth, says the Broadband Forum, translates to a 12.3% annual growth rate, broadband's largest increase in the last five years.

According to the global non-profit's end-of-year calculations, total Q4 broadband growth reached an estimated 65.5M connections, a quarterly increase of 2.6%. The Broadband Forum said the numbers point to a strengthening in the market, as broadband moves into the daily lives of more and more people all over the globe.

The group says Russia was a "peak performer" in 2011 with more than 36% growth in broadband and a more-than doubling of its IPTV subscribers to 1.14M. The organization's study also pointed to Asia as a strong contributor to global growth as the region experienced a 16.4% increase in broadband subscribers.

In terms of technology developments, DSL - with 60.8% of the overall market share - continues to be the dominant broadband technology, the group said, although it is beginning to lose ground to other access technologies. The expectation is for hybrid fiber/DSL deployment solutions to continue to grow, as hybrid deployments can deliver more bandwidth to consumers while allowing efficient re-use of existing infrastructure. "The combined market share for FTTH and FTTx/hybrid technologies has again grown from 16% in Q3 to 16.7% at the end of 2011, encroaching on cable's market share, which has dropped to 19.4%," the org. said. •

A "Consiglieri" at CVC? --- FCC Eyes DISH Spectrum – Online Video Complaints

People:  Commenting on management changes at Cablevision ("one of the most dramatic and rapid management turnovers we have ever witnessed in our coverage of the media universe")  BTIG's Richard Greenfield points to Cablevision local media head Tad Smith as Jimmy Dolan's "consiglieri."  He is, says Greenfield, "guiding Cablevision strategy."  Go here; registration required. --- Three big promotions for women at Comcast as Tracy Pitcher becomes SVP of small and midsize business operations, Rebecca Scilingo is the new SVP of the Enterprise Project Management Office for Comcast Cable and Amy Stipandic is SVP of strategic process, design and delivery. --- NAB’s Gordon Smith will stick around thru 2016 with his new 5-year contract extension.

Rules & Regs:  Looking at the FCC's notice of proposed rulemaking on flexible terrestrial use of mobile satellite services, Stifel Nicolaus analyst Christofer King notes, "We expect the FCC will approve, probably late 2012, general terrestrial use of the 2 GHz band, which DISH needs to deploy wireless broadband service and or at least increase the spectrum’s value."  The question, of course, is what requirements the FCC will seek ... and King suspects the FCC would like to reclaim some DISH spectrum for auction.  --- King also notes that the Commission has scheduled a NPRM on program-access rules, which are set to expire this October unless extended. 

OTT: FixYa, a site that tracks complaints filed by a claimed 20M users, reports “that 55% of the complaints about Google TV related to blocked content. That's a higher proportion of complaints than any other class of bug, for any of the four Web TV products they tracked:  Google TV, Apple TV,  Boxee, and Roku.  Apple TV and Roku users complained most often about connectivity bugs, while Boxee users complained about firmware updates freezing.”  Details at Business Insider.   --- Meanwhile, YouTube’s My Damn Channel launches next week with live comedy. “It’s the beginnings of what a cable television network would look like – if it was run by lunatics,” said founder Rob Barnett.  Details at Giga Om.


Spectrum: Verizon Wireless General Counsel Randal Milch, in pre-hearing testimony delivered to the Senate antitrust panel with scheduled hearings set for today, says, “No customer will see fewer choices or increased prices as a result” of the deal with Comcast and other cable operators for spectrum.  Details here from Bloomberg. (From Rumor Central: Scuttlebutt has only Comcast bullish on the deal; many cooperative cable JVs have suffered, most recently Canoe.)  More on this from AllThingsD’s Peter Kafka  with “Comcast and Verizon” itching to fight “Google and Apple.”

Up, Down & Over: Sky unveiled its new internet TV service, NOW TV.  Due to launch later this year, NOW TV will provide instant access to some of Sky’s most popular content, including hundreds of films from Sky Movies. --- Liberty Media has launched a joint venture with Chinese National Radio, buying 49% of the CNR Home Shopping Co.  It'll be jointly run by execs of the Chinese company and Liberty's QVC.  More from the Denver Business Journal. --- Dutch cable op Ziggo’s shares jumped 15% on opening trading yesterday.

Broadband: Crash your new iPad, yet? --- Twitter is 6-years old.

Programming:  Not to worry, OWN fans.  Discovery spokesman David Leavy told USA Today that the outfit will "absolutely not" pull the plug.

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