Next week will be a hot time for Matt Polka, president-CEO of the American Cable Association. It's the 18th Annual Summit in Washington, D.C., where the blazing topic will be retransmission consent.
That's the front burner. Simmering on the back burner, and unlikely to boil over at the Summit, is another issue that could, within the next year, flare up in the faces of ACA members: the Commercial Advertisement Loudness Mitigation (CALM) Act. On its face, the Act seems benign; it's a law designed to stop overly loud commercials. Beneath the surface, though, like any regulation, it could have adverse impacts on the ACA membership so Polka has to be wary of what's going on.
FierceCable: So CALM? Isn't this a good thing?
Matt Polka: It should be. It's a one page act, very easy, Congress got something done. Our concern here as always is what amounts to the unfunded mandate of regulations. Congress passes a law; the FCC implements it and says "cable operators you do this"; and there's a technology and cost component to it that disproportionately affects our members because we have fewer customers per mile.
FC: OK, stepping back. Where does CALM sit now that it's been into law by President Obama?
MP: CALM is a great example of the difference between legislation and regulation. You can go on YouTube and plug in the CALM Act and see a little signing ceremony where you have the President signing the bill, talking and chuckling and saying, "I get it. Grandmas all over the country basically every time the commercials go up they get really angry and we ought to do something about that."
FC: Makes sense. So what's the problem?
MP: The FCC has to do the rulemaking within a year and then implement regulations within a year after that. The shoe that drops is the complexity of the regulation that's involved.
FC: But doesn't that complexity fall onto the shoulders of the programmers?
MP: I wish it would. The Act does not specify that at all. The Act identifies cable operators and broadcasters and talks about the requirement to install monitoring equipment. It's the obligation of the cable operator and the broadcaster to install and maintain this equipment. It doesn't say in the Act that we have to take any specific affirmative steps to adjust the levels but rather to monitor it and there might be some reporting requirements later. That's always the issue with regulation. The Act may be one thing, but how it's implemented is another.
FC: Doesn't the Act only apply to the advertising cable operators insert in local programming? That shouldn't be too big a hassle.
MP: It shouldn't be. That amounts to only 4 percent of the total number of commercials that are seen on television. The issue for us is we can look at the Act and see it's pretty limited in scope, at least for cable operators. It seems like the nugget is that cable operators must install equipment and monitor the loudness levels and address cable-inserted commercials. In the rulemaking and regulation process, how do we know that the one at the end of the line isn't going to be responsible for everything? That's what we're going to be responsible for.
We may be responsible for monitoring and that's OK, but we don't want to be responsible for the programmers if they screw up and don't put the right dial norm in the metadata that comes down the line to us.
FC: So right now are you in the stage of putting out the small brushfire before it becomes a wildfire--continuing, of course, to follow your own analogy?
MP: We're at a point where the FCC hasn't even really launched the rulemaking, hasn't even taken any steps, but there are all these issues out there. These issues are not particularly our fault or our responsibility. If the regulation maintains consistency with the Act where it says our obligation is to install and maintain monitoring equipment, I think we can handle that. But if the regulation goes farther and says we not only have the obligation to monitor, but also to adjust, to fix the signal, that's where you start to get into really, really costly technical issues and it's not our fault.
FC: How expensive?
MP: Our estimate is with the number of systems that are out there, some 6,000 headends nationwide, if the FCC said the cable operator has to not only monitor but adjust the signal to try to come up with some sort of common perceived loudness, based on estimates of manufacturers and the kind of equipment it would take as well as the number of pieces of equipment per channel, we figure you could be talking about $200,000 in upgrades per headend and that's $1.2 billion for those 6,000 headends and our members have around 4,000 of them. We're talking about real dollars if the FCC does more than what the Act says, which is just install and monitor.
FC: Then the last question is easy. What are you doing?
MP: We've been into the Commission already, laid out these concerns to them top help inform them as they put their rulemaking together, which I suspect we'll see sometime in the second quarter.