ACA: 91 small cable systems were shut down in 2014, primarily due to high programming costs

The American Cable Association has filed a research paper with the FCC, claiming that 1,078 small and rural cable systems serving 50,000 subscribers have shut down since 2008, primarily due to fast-increasing programming costs.

The group also said that 47 cable operators shut down 91 systems serving 5,307 customers in 32 states in 2014 alone. 

"Programming fees have risen rapidly in recent years, at a greater rate than video revenues, and the delta between the two is expected to grow in the future, putting increasing pressure on MVPDs margins, particularly those that are smaller-scale," the ACA said in its latest report, titled High and Increasing Video Programming Fees Threaten Broadband Deployment.

The ACA provided the paper to the FCC as part of the agency's public comment request for its next Video Competition Report to Congress.

Citing data from SNL Kagan, the ACA said that programming costs grew at an average annual rate of 9.4 percent from 2010 to 2-15. Over that same span, however, average revenue per pay-TV subscriber only grew at a rate of 4.1 percent. 

The ACA has set its sights on broadcast retransmission licensing fee increases specifically, with the paper noting, "Leslie Moonves, CEO of CBS Corp., has set a target of $2 billion in annual revenue from retransmission consent fees by 2020, up from $500 million in 2013 -- which implies an average annual increase of 21 percent."

The ACA also referenced increasing licensing rates for regional sports networks.

The comments from the cable industry lobbying group were delivered almost simultaneously with an ex parte filing from the rival National Association of Broadcasters, which accused pay-TV operators of ginning up retransmission-related disputes with stations in order to draw regulatory attention.

The FCC is currently weighing changes to existing laws governing how retransmission-related negotiations unfold. 

For more:
- read the ACA's FCC filing

Related links:
NAB accuses 'bad actor' pay-TV operators of ginning up retrans disputes, targets Dish, Mediacom, DirecTV
FCC's Wheeler thrills pay-TV operators, proposes removal of exclusivity rules from retrans negotiations
ACA's Matthew Polka tweets to FC about runaway retrans, proliferating OTT, rampant consolidation, more at #ACAMattPolka

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