News

Small World

7/30/2012 12:01 AM Eastern

ORLANDO, Fla. — At Walt Disney World,
everyone has a magical time. Cheerful music
is piped in. Pleasant smiles are everywhere.
Fireworks every night.

Stark contrast to the stories of small cable
operators I heard last week at the Independent
Show, hosted by the American Cable Association
and the National Cable Television Cooperative in
Orlando. Many of their members measure subscribers
in the hundreds or thousands.

On stage and in side discussions, the tales
echoed the same theme: “We’re losing money on
traditional TV.” The cost of programming is soaring,
squeezing margins and, in some extreme cases, causing
blackouts when carriage stalemates occur. An operator in Wyoming
said some towns have essentially gone cable-TV dark.

It was hard not to hear logic in their complaints and
wonder if there really is a problem with the current regulatory
regime, or at least with how it treats small operators
in mostly small or rural communities.

As ACA CEO Matt Polka pointed out to me recently, there
is a public interest in serving the farthest-flung American
towns with video and broadband. The practice of bundling
networks owned by the same big content provider
— force-feeding channels that some viewers don’t
know or watch — reduces choice. Small operators’
hands are tied; it’s “take all these channels or take
none.” Likewise, when local network affiliates are
represented by the same firm in retransmissionconsent
negotiations.

But there’s always a happy ending in Disney
World. And from the vantage point of these operators,
Congress will ride in like a knight, and
the sword will be a top-to-bottom rewrite of the
Telecommunications Act.

There’s a good chance this tale could —
eventually — come true. There’s ample desire on the part
of key legislators torn up about retransmission-consent
blackouts, their effects on consumers and the limited
scope of Federal Communications Commission authority.
Many believe a video-regulatory framework crafted 20
years ago can’t possibly be a good guide for today’s market.

Until then, it would be nice to see both sides work a
little harder at keeping TV on during carriage negotiations.
A good deal allows both parties to profit. It’s a
small world, after all.

September