ACA: Video Could Become Losing Proposition

The American Cable Association said the key barrier to broadband deployment remains the high cost of programming and that, without some relief, the video portion of the triple play could become unsustainable for smaller operators. The organization made that point to the Federal Communications Commission in initial comments on the Sec. 706 deployment report and reiterated that in reply comments. In the Sec. 706 report to Congress, the FCC once again concluded that advanced telecommunications was not being deployed to all Americans in a reasonable and timely manner and asked for input on steps it could take ASAP to address that shortfall.

The ACA cited a research analysis that concluded "if current trends continue, traditional [multichannel video programming distributor (pay TV)] margins will be reduced substantially each year, and multichannel video service, which has been the foundational service for triple-play providers, may become a losing proposition for small to medium-sized providers within the next five years -- by 2020 -- or even sooner should conditions deteriorate more rapidly than anticipated." That means less revenue, less cash for investment, and less deployment, the ACA said. The ACA is also concerned about the impact of content providers charging a per-subscriber fee for online distribution, saying the FCC should at least monitor that to see if it has the effect of blocking access, being commercially unreasonable or otherwise adversely affecting broadband uptake, couching the concern in the network-neutrality terms the FCC applied to Internet service providers.