The cable industry has a new hedge in its battle to control spiraling program costs: Hook the struggle to the federal government's effort to expand high-speed Internet deployment.
In a letter sent to the FCC last week, the American Cable Association advised the agency that it can spur deployment of faster Internet services by small- and mid-sized MSOs by lessening the burden of ever-increasing program costs.
"It has become evident that the increasing prices video programmers and broadcasters charge multichannel video programming distributors (MVPDs) can act as a drag on broadband deployment," said ACA president and CEO Matthew Polka, in a letter to the FCC sent March 6.
The missive is part of commentary sought by the Federal Communications Commission as part of its Section 706 hearings, which are meant to remove barriers, infrastructural and otherwise, to more rapid deployment of high-speed broadband services.
The ACA said smaller providers of triple-play services are struggling to maintain margins amid a 9.3 percent annual increase for programming licensing costs (figures provided by SNL Kagan). MVPD revenue has concurrently grown at a rate of only 4.9 percent, they say.
"If these prices continue their upward spiral, existing providers of both broadband and MVPD services and new entrants will be deterred from expanding their broadband networks or otherwise undertaking new builds," Polka added. "The FCC can and should address this problem now by modernizing existing MVPD regulations to ensure they work as intended, particularly for providers who are most likely to serve smaller markets and rural areas where new broadband build-out is most crucial."
- read this ACA press release
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