AT&T to FCC: don't call us a cable operator

AT&T (NYSE: T), the nation's largest IPTV service provider, seems willing to accept the concept of paying regulatory fees to help support FCC activities, but it doesn't want to be lumped in with cable operators and it does want those fees to be restricted to video subscriber numbers.

"If the Commission is inclined to assess regulatory fees on IPTV, it must avoid inadvertently pigeonholing IPTV into the historic 'Cable TV System' regulatory fee classification," AT&T maintained in a filing with the commission, noting that "IP technology allows for new and innovative methods of delivering video content to subscribers and enables new competitors to enter the market."

AT&T's claims came as the American Cable Association made its own plea to the FCC that IPTV providers as a whole should be assessed fees to support the Commission's regulatory work. Claiming that IPTV providers "offer service substantially similar to cable service," the American Cable Association (ACA) has called on the FCC to reform its regulatory fee program and demand that IPTV providers "remit commensurate regulatory fees" that match those paid by their cable TV counterparts.

The ACA asked the FCC to maintain its assessment of per-subscriber based cable fees and expand "this methodology to (apply to) all multichannel video programming distributors (MVPDs) including IPTV providers."

That nomenclature was more to the liking of AT&T which called it "more appropriate as a regulatory fee category because it could encompass both cable service and non-cable service video offerings like IPTV and allow for evolution in the MVPD market."

The ACA said it based its opinion on following Congress' intent that the FCC access and collect regulatory fees to recover costs incurred by the organization, most particularly the Media Bureau. Right now, the filing said, IPTV providers "receive numerous direct regulatory benefits from the activities of the Media Bureau … yet today pay no fees to support these activities due to their self-selected status as non-cable operators."

In an ACA press release, President and CEO Matt Polka pointed out that the entire class of non-cable service providers, including direct broadcast satellite, should be folded under the MVPD umbrella and asked to support the FCC's Media Bureau costs.

"To carry out statutory objectives and achieve fairness, the FCC must broaden the class of entities supporting Media Bureau activities to non-cable pay television providers that offer service using IPTV and Direct Broadcast Satellite technologies," Polka said in the press release.

The current system, the ACA's filing stated, gives IPTV service providers a free ride while cable operators are charged a toll.

"An IPTV provider such as AT&T competes head-to-head with ACA members in many areas with the result that cable operators effectively pay for the work done by the Media Bureau on behalf of their competitor," the filing stated, seeking "commission action to rectify the unfair situation by which cable operators, particularly small and mi-sized operators, are put at a competitive disadvantage and effectively pay for government work that helps their competitors in the video programming distribution market."

AT&T, for the most part, agreed, noting further that the FCC should establish a "single MVPD category that would encompass all MVPDs" to "harmonize its fee collection scheme across all MVPDs."

The big qualifier, AT&T said, is to make certain that the fees are assessed for video services, not based on total subscriber numbers.

"Where an MVPD provides multiple services, any such per-subscriber fee should reflect subscription to MVPD video service provided. Services fees in an MVPD fee category must exclude subscription to other services that an MVPD may provide that do not constitute an MVPD service," the AT&T petition continued.

This would make sense--and save dollars--for a provider such as AT&T which lists more broadband subscribers than video subscribers for its U-verse IPTV service.

In the end, the ACA said in its petition, the wisest course would be to continue assessing fees based on subscriber numbers but expand it to other MVPDs.

"There is no reason why it would not continue to be a fair and sustainable assessment method," the organization said.

For more:
- ACA issued this press release
- the FCC received this filing from AT&T
- and this filing from the ACA

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